Technology key to small business growth

Kenya has already established itself as a high growth market with a technology-enabled society that it can build on to create a vibrant information technology-based service industry.

With the East African information technology-related market expected to grow to $128 billion in the next decade, Kenya is well positioned to benefit from this growth.

Without a doubt, this growth will be driven by Kenya’s Small and Medium Enterprises (SMEs) ecosystem that stands at a registered 17 million companies.

Employing at least 85 percent of Kenya’s eligible human resource and contributing to more than 45 percent of Kenya’s economy, approximately half of Kenya’s Gross Domestic Product, it might all seem glorious, but small businesses are not pulling their weight in the economy.

While lack of working capital, market access and red-tape are typically the reasons bandied around for  limiting small business growth, the remedy could as well be lying  in lack of accessible and affordable  ICT solutions.

BENEFITS

There is market confirmation that digitising business processes could bring unquantifiable benefits; reaching more potential customers, reducing the cost to serve customers, making production processes more efficient and making it quicker and easier to monitor and report business performance.

To get small and medium businesses to uss ICT services more extensively, there are four hurdles we have to overcome: complexity, affordability, connectivity and a compelling reason.

With a competitive connectivity landscape, it is increasingly becoming a complex task for small businesses to find the right ICT applications to meet their business need. 

Cost is another obvious stumbling block. While technology such as cloud computing is changing the equation; the panacea is really the operators’ investments in connectivity assets.

INFRASTRUCTURE

Telkom Kenya is among the companies that have made investment in connectivity infrastructure a key focus. Some of its investments include a 23 percent stake in the 5,000km Teams undersea fibre optic cable through Fujairah in the UAE), a 10 per cent stake in the 2,700km Lion2 cable through Mayotte in Mauritius, an eight per cent stake in the East Africa Submarine System and management of the government’s national optic fibre backbone.

A final barrier stops many small businesses making effective use of ICT — they simply do not see a compelling reason to do so.

Key market trends are helping to overcome this barrier. The revolution in consumer-friendly devices such as smartphones and tablets and the fast-growing ecosystem of applications like Telkom Kenya’s  E@synet Broadband for SMEs are changing things for small and medium business as much as for consumers.

ONLINE

Policy makers should also have access to better information on how to persuade SME’s of the benefits of being active online.

The explosion of social media is offering new opportunities for small businesses to market themselves and build richer relationships with customers.

This trend  will play a dominant role in the future of Kenyan enterprises, providing businesses with key analytics, data and informatics requisite for concise, thorough and more effective demand-side decision making. Indeed, there’s evidence that companies that effectively use analytics to inform demand-side decisions about business processes outperform those that can’t.

CHALLENGES

There are many challenges for SMEs in today’s market, such as increased competition, rising customer expectations and limited capital. However, by using the cloud to access the same tools and services once reserved for enterprises, SMEs can deliver a higher quality of service without placing additional strain on existing resources.

Finally, there is an opportunity for the government to act as a fulcrum for increasing uptake through its public services, through the Business Environment Delivery Unit to digitise government operations to ease delivery to small businesses.

The writer is the Managing Director, Enterprise Division at Telkom Kenya