ICT, From Large Companies to SMEsBy Joaquin Saldaña | Tue, 09/14/2021 - 12:55
Historically, when talking about high tech and specifically information and communications technology (ICT), we immediately tend to think about large corporations. That’s because only big companies were able to access edge technology because it required high CAPEX and highly trained talent. Typically, ICT involves large investments in data centers, those large computer rooms that host huge computing systems, with extensive operational support systems, such as air conditioning, humidity controllers, fire extinguishers, and a large etcetera. All of that made it impossible for small or medium enterprises (SMEs) to access that type of technology.
The Digital Transformation era has broken that paradigm. New technologies have emerged and made it feasible to access top-of-the-line ICT. Those technologies are: broadband access, cloud computing, big data, IoT and artificial intelligence. The paradox is that all those technologies are more powerful than the ICT technologies used 15 years ago but they are more accessible. Let’s see how.
Broadband access as a means to get internet connection via a fixed (copper or fiber optic) or mobile (cellular 4G or 5G) connection are powerful connections that provide access to anywhere in the world with high speed and low latency; cloud computing, which provides top-of-the-line IT technology in a shared model that allows users to pay per use and in many cases with preloaded business solutions; big data as an extensive platform to handle and exploit large volumes of information, within the same cloud solutions; IoT, considering that everything is sensing and anything can be measured, machines are more likely to be connected to the internet and interact with humans and with other machines; and last, but by far not least, we have artificial intelligence (AI), mathematical models developed to have deeper understanding of the data and the interaction or dependencies within them and with the availability to learn through experience, now also available as part of the cloud platforms.
On the other hand, SMEs are an important part of the worldwide economy, the largest job generator and vital for the GDP development of all countries. Understanding that innovation most of the time comes from the cooperation of SMEs (startups) and large companies, SMEs are the keystone of the day-to-day economic activity of all societies.
But, what are the main concerns of SMEs?
It looks like most of them are focused on the basic things — getting customers, growing revenue and profitability — and do not have innovation or technology at the top of their minds. In Latin America, we are still facing the challenge of network coverage and digital culture but those cannot be stoppers to improve SME performance based on ICT and accelerate their digital transformation.
Now the question is: why do they not use ICT extensively?
- Lack of digitalized infrastructure and ready-made solutions to support Digital Transformation;
- Most SMEs do not understand how ICT can be of assistance to their business operation and/or there’s a lack of technology applications required by SMEs;
- SMEs often end up getting trapped with limited business usage of ICT tools and end up using them merely for social media and personal consumption of digital content;
- The need for appropriate regulatory assistance required by SMEs in terms of different programs and sponsorships;
- Human capital to support their business needs, especially in high tech and professional sectors, is required;
- Poor investment platform to expand, finance and invest in their business.
By reviewing the causes listed above we can conclude that digital culture is the main issue, so on top of the challenge of coverage and making technology affordable, we need to improve digital culture in society in general. Technology is mainly used as a means of communication and entertainment; although this pandemic has shown an important increase in e-commerce, it is still far away from becoming the main channel. Governments and society should jointly work to improve digital culture at all levels, with special attention to the SME sector to create a virtual circle of digitalization.
Affordability for SMEs comes in different forms:
- One, of course, being the cost, but assuming cloud models of pay per use and the drop in telecommunications fees, we can consider this one solved;
- Another is the possibility of having access to comprehensive solutions that fit business needs in a very simple way; as SMEs do not have deep knowledge or skills, solutions must be very intuitive and focused on solving their business needs, not complexities. Because they do not understand, they do not care about ICT.
- Another still is combining the use of ICT as a social interaction and business-oriented tool, helping them to create a stronger bond with their customers and improve their reach with new customers.
The challenge can be divided in three categories: infrastructure, ICT affordability and digital culture; we need to work on all them at once:
- Speed up infrastructure deployment (broadband, fixed and mobile) to ensure no one is left behind.
- Promote the development of ready-to-use solutions for SME sectors, based on cloud and AI.
- Improve digital culture across the entire society to use ICT not only for basic communications and entertainment.