In the late 1800s, Frederick Taylor birthed the field of management science, which fundamentally altered organisational structure, and helped pave the way for entrepreneurs to effectively participate in the industrial revolution. Taylor, for example, demonstrated how divorcing ownership from management and how worker specialisation could help firms scale-up rapidly and increase profitability. Arguably, there have been no similar means offered to revolutionise business until the arrival of ICT.
Today ICT offers SMEs, particularly in Africa, the tools to revolutionise their business processes, and to operate just as efficiently and effectively as any world-class firm. However, according to the World Bank’s Africa Competitiveness Report 2011, Africa overall has low penetration rates of most ICT tools, which is reflected in the country rankings for technological readiness.
For example, Kenya, Uganda, and Tanzania are ranked 101, 112, and 131, respectively, out of 139 countries. While SME’s have embraced ICT advances related to finance and telecoms, their business processes remain fundamentally unchanged. Owner-managed SMEs with predominantly manual processes are still the norm despite recent advances in ICT that have made automation technology easily accessible.
Gone are the days when automation solutions, usually in the form of expensive Enterprise Resource Planning systems, were the preserve of large corporations. The advent of cloud computing and attached services has essentially democratised ICT, offering even brief-case entrepreneurs with advanced solutions affordably.
Cloud computing allows for complex processes, such as networking of a SMEs multiple computers or locations, to be performed through a cloud service provider inexpensively.
Attached services, on the other hand, allow for simpler processes, such as keying in a sales transaction, to be performed on a software application installed on a computer. When paired together, for example, a salesman could perform sales transactions without an internet connection, and the data could be automatically transmitted to headquarters once an internet connection is established.
The pairing of cloud computing and attached services is therefore absolutely critical in countries where internet connectivity may not always be reliable.
A key advantage of cloud computing and attached services is that expensive equipment, including servers, and their maintenance is no longer required. In addition, previously complex, lengthy, and costly installation processes are now eliminated. Most significantly, the arising economics allow for highly affordable pay-as-you-use models.
For example, for a monthly fee of only Sh3,000, an SME can acquire a sales and inventory management solution that enables networking of multiple sites located almost anywhere in the country, field sales using a mobile phone, and automatic data backups. A comparable solution barely a year ago would cost more than 100 times as much, upfront.
Essentially, cloud computing and attached services have eliminated the barrier of high upfront costs, and paved the way for exciting, affordable ICT solutions for SMEs.
Mark Mwaura is a director at Olivine Technology Ltd