JOURNAL – USE OF ICT IN SMES MANAGEMENT WITHIN THE SECTOR OF SERVICES

Journal: USE OF ICT IN SMES MANAGEMENT WITHIN THE SECTOR OF SERVICES

Author:

Plumb Ion & Zamfir Andrea

Academy of Economic Studies Bucharest, Faculty of Management.


Abstract

The knowledge-based economy, along with the impact of the information and communication technologies (ICT) in management of the organizations, presents a growing interest in strategic management literature. Nowadays, information and communication technologies are recognized as key tools in management processes, having a remarkable potential to contribute to sustained competitive advantage for businesses. However, some difficulties in using information and communication technologies and aligning them with strategic development could appear in case of small and medium enterprises (SMEs). The aim of this study is to reveal and analyse the key factors of implementing information and communication technologies in small and medium business within the sector of services. We examined how information and communication technologies could influence the organizational practices of SMEs within the sector of services. Based on the results of the study we offer some reflections on knowledge-based economy practices in SMEs management within the sector of services.

 This study investigates how the use of ICT could contribute to the success of small and medium enterprises (SMEs) within the sector of services. Within the knowledge-based economy, SMEs are facing both opportunities and challenges due to the information and communication technologies development. We consider that ICT should be used in small business management within the sector of services because ICT are key tools in management processes and could improve managerial practices. The study is based on evidence provided by articles and research reports. The research question was answered by analysing published sources and interpreting evidence. Another way of approaching this question could be collecting and analysing empirical data from the SMEs within the sector of services and comparing the results with the findings of this study.

ROLE OF SME’S IN NEW ECONOMY

The economic importance of SMEs within the sector of services is highly recognized at the European Union level. According to Eurostat (2008), in total, there were almost 19 million enterprises in the EU-27’s non-financial business economy in 2004. Of these, 99.8 % were SMEs, the majority of which were micro enterprises (employing fewer than 10 persons). However, in order to have a significant impact on Europe’s economy, SMEs need to grow bigger, meaning that they should increase employment, expand their variety of services, and enlarge their markets and earnings. Innovation is the most important driver of SMEs growth, because it could lead to new products and services or more efficient ways of delivering existing ones, through the introduction of new technology.

BENEFIT OF USING ICT

SMEs within the sector of services should use ICT because it provides many benefits at different levels (Love P. et al., 2004): operational level, tactical level and strategic level. As the figures 1, 2 and 3 reveal, the use of ICT in SMEs within the sector of services could improve communication, ability to exchange data, teamwork, customer relations, visibility of services, market share, and competitive advantage etc. This statement is based on the fact that ICT allows companies to obtain, to process, to accumulate and to exchange information. Furthermore, in a knowledge management context, ICT can support transformation within and between tacit and explicit knowledge. Successful knowledge management initiatives could transform the small business innovation capacity into a sustainable higher performance (Ruiz-Mercader J. et al., 2006). Another benefit of adopting e-business could be the higher efficiency obtained in business transactions due to a fast and accurate processing of information. Web-enabled services increase the competitiveness of SMEs because they change the relationship with customers by creating a stronger link between firms and its clients (Lal. K., 2005).

Using ICT in SMEs within the sector of services could also facilitate cooperation within the company and between the company and other firms.

Figures of benefits below:

Conclusion:

The study reveals that ICT should be used more in SMEs within the sector of services. This conclusion is based on several premises: (1) within the knowledge-based economy, SMEs from the sector of services are facing both opportunities and challenges due to the information and communication technologies development; (2) ICT are today key tools in management processes; (3) ICT could improve managerial practices of SMEs within the sector of services; (4) SMEs could use ICT in order to grow and to become more innovative; (5) ICT provides many benefits for SMEs within the sector of services; (6) the costs of ICT adoption in SMEs within the sector of services have a good potential to decrease.

Our findings could give good reasons for intensifying the efforts of promoting the use of ICT in SMEs within the sector of services and attempting to change mentalities. SMEs within the sector of services should change their managerial practices by integrating ICT in their day-to-day activity. Otherwise, they will not be able to benefit from the opportunities that knowledge-based economy offers and moreover, they will face the risk to be eliminated from the services market.

Further research could focus on collecting and analysing empirical data from the SMEs within the sector of services, comparing the results with the findings of this study, and developing a model for the integration of ICT in SMEs management within the sector of services.


Created and Summarised by:

Wirawan Rizkika

MB-38-INT-1

 

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