March 21, (THEWILL) – Nigeria’s small and medium enterprises (SMEs) are vigorously leveraging technology to achieve huge growth and transformation. By this move, they contribute more to the gross domestic product (GDP), create jobs and boost the nation’s tax revenue. It will also lead to expanding the private sector space and enhance non-oil revenue which the government is placing emphasis on to reduce dependence on oil.
Of course, the SME operators cannot but embrace technology. The reason for this development is that technology-related inventions now play a central role in manufacturing, trade and services most of which feed the SMEs.
This has shown increased impact since its prominence manifested in the global business environment with ripple effects on emerging markets and developing economies.
Specifically, businesses are continually searching for technology-enhanced initiatives and areas they could be applied to reduce cost, attain targets in quick measures and harness the resources that specific choice of technology could create.
Additionally, awareness has been stepped up through campaigns, out-door and experiential marketing and other measures to reach existing, prospective and potential consumers. It is now common to see SME operators search the internet, attend trade fairs and make contacts for the latest development in particular areas of their operations which could benefit from the latest technology.
Before now, SMEs were solely dependent on their physical presence alone. How much of their target buyers/consumers they are able to reach and convince physically, determines how much they make. This was the case before the digital disruption that COVID-19 forced on the business environment.
Until this time, most SMEs never existed beyond the first five years of their start-up. According to a report by the National Bureau of Statistics (NBS) in collaboration with the Small and Medium Enterprises Development Association of Nigeria (SMEDAN), most SMEs in Nigeria die within their first five years of existence, a smaller percentage goes into extinction between the sixth and tenth year while only about five to ten percent survive, thrive and grow to maturity.
igeria employ less than 100 employees, implying that 97 percent of all businesses in Nigeria are “small businesses”.
Most of these SMEs did not embrace the opportunities of tech to bring innovation to their operations. Thus, existing beyond the first five years was a mirage. On the other hand, the tiny percentage that thrives and grows to maturity are the ones that are consistently evolving alongside the evolution of technology across their world.
In recent times, technology has become evident in virtually every aspect and scope of business. The SMEs are tapping into the opportunities to generate innovative solutions that allow them to launch into their full potential. From high-speed internet service to cloud technologies, there are enormous benefits for SMEs willing to embrace the full possibilities embedded in tech, to their advantage.
Now that small businesses are embracing technology, the result is that they witness improved business agility. Technological solutions have also allowed small businesses to remain agile and quick to respond to changes within the markets. This is through the integration of various tech leads to increase collaboration among teams for better product and service development.
Also, the embrace of tech by small businesses has helped these businesses manage their teams better. They have developed the capacity to improve staff coordination and collaboration through the multiple significant advances in communication technologies.
For instance, Voice Over Internet Protocol (VOIP) systems, conference calls, and telepresence software have helped employees to interact remotely from any part of the world. As such, it improves efficiency in the running of the business as well as promoting better work-life balance. It is discovered that small businesses play significant roles in the value chain that lead to the results achieved in this area. This includes transportation, supplies, maintenance and payment services.
The adoption of technology solutions allows SME operators to run as efficiently as the larger corporations. For instance, tapping into the benefits of high-speed internet and automation software allows for better handling of vital tasks. Automation tools have also enhanced digital presence and engagement with customers for SMEs.
Businesses are also tapping into the potentials of Search Engine Optimization and Pay-Per-Click marketing to generate more leads and revenue. Also, the creation of e-commerce stores enables sales teams to target a broader customer base. For instance, in 2019, consumers spent over $601.75 billion with U.S. online merchants, up 14 percent when compared to 2018.
IT infrastructure modernization enables businesses to drop outdated legacy systems for better storage solutions like cloud storage. This is because the cloud storage systems are reliable, allowing for unrestricted access to business information from any place in the globe. It also enables business teams to work remotely, accessing the necessary information.
As earlier stated, communication solutions such as video conferencing and VOIP enable SMEs to save on travel costs and accommodation, thereby aiding financial savings. Cloud services reduce data storage costs and automation reduces the need for surplus staff, saving on labor costs. Through tech support, SMEs have been able to create encryptions and firewalls that enhance data security by protecting their corporate information.
Thanks to intuitive web designs, SMEs in Nigeria have been able to improve their customer experience and consequently increase patronage and revenue. Through this tech solution, SMEs can streamline their operations on the first point of contact with potential clients. Automated tools also enable customers to book appointments and consultations. These technological systems are massively helping SMEs build consumer trust and brand image.
In terms of lending, Fintech has also overhauled credit by streamlining risk assessment, speeding up approval processes and making access easier.
By that, a good number of SMEs can now apply for a loan on their mobile devices from companies not based in their countries or locality. Major credit companies include Tala, Petal and Credit Karma. Some of the types of Technology in vogue include, machine learning algorithms, blockchain and data science integrated into the financial sector to carry out activities ranging from processing credit risks, payments, loans to credit scoring, stock trading and running hedge funds.
These technologies are common because they can be used by micro, small, medium and macro business enterprises for innovation, brand image, increased revenue, ease-of-doing- business, financial savings, cost saving, networking and sustenance amongst other benefits.
Obinna Micheal, a freelancer, told THEWILL that through Paypal, he has been able to write for foreign clients, get paid in dollars and receive his money safely. A fashion designer, Stephen Nwosu, said he makes clothes for people outside the country and has no need to worry about payment as remittances are a lot easier with some Fintech apps like Zelle and Venmo. He added that his business has grown exponentially since he embraced this possibility.
Similarly, an online writing coach, Nonso Nwadike disclosed that tech has benefited him in several ways. First through social media, he has been able to connect with different people across the world, some of which have proceeded to patronise him.
Secondly, Nwadike mentioned that instant payment has been the best advent of technology so far. In his words, “the joy of getting paid for your services in different currencies by people you’ve never met in your life and might never meet, is great. Getting paid is not enough; you can also access your money almost immediately through some payment Apps”.
A visit to the popular Tejuosho textile market in Yaba Lagos, showed that sellers and fashion designers are leveraging Apps to grow their businesses. They market, receive enquiries, orders and deliver to numerous clients without physical meeting or what one of them called eye-to-eye meeting. “With the phone, we start, execute, deliver and conclude a large number of orders to our customers in different parts of the world and receive payments seamlessly,” said Obinna Dike, a seller.
Courier and logistics firms are also expanding rapidly, especially in highly commercialized cities like Lagos. Despatch and expert riders with their own distribution facilities such as fast-speed motorcycles, street identification and traffic monitoring apps to make fast delivery of goods. They also leverage on apps to pay the numerous state and local government taxes and levies that pertain to their businesses to avoid disruption and harassment by overzealous and corrupt revenue officials.
Private school owners and home teachers engage in distance lessons using Zoom to reach out to their students and pupils. Investigations showed that the learning effects have not been compromised and both parties have discharged their financial commitments seamlessly. The school/teacher receive payments from the learners through tech-enabled remittances that create no problem. Restaurants and caterers in busy cities like Lagos have placed and received orders through tech-assisted transactions that meet specifications. “We are entering into another stage of life where technology does all we need to do without hassles”, said Martha Ejiofor, a Lagos caterer.