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News Article

Lack of Resources Main Obstacle to SME Digitization

By Andrea Villar | Wed, 09/30/2020 - 16:37

The digital transformation went from being at the bottom of the list of priorities for companies to the top in just a few weeks. The lack of budget, however, is something that these players have had to deal with. According to an IDC survey, 18 percent of SMEs in the region are looking to strengthen their digital education, as 80 percent of them stated that digitalization is the only way to overcome the current situation.

"When the pandemic arrived, SMEs were the ones who were looking for the most help, since they do not have the same budget as a large company nor the instruction that departments of large companies have. One of the axes we have towards these companies is education," Ana Salinas, Vice President of Sales and Alliances at JellyFish, a global company that combines data, creativity and media buying, told Expansión.

According to INEGI, in Mexico 95.4 percent of the companies are SMEs, which contribute 52 percent of the country's GDP and generate 72 percent of formal jobs at the national level. However, most of these companies are destined to fail, as only 62.6 percent of the SMEs that were formed in 2017 survived into 2018, while only 42.6 percent made it to 2019.

Myth or Reality?

But what do companies working to help businesses in their digital transformation have to say? According to Selene Diez Reyes, Director General of Forte Innovation Consulting, the costs of a digital transformation should not be considered an obstacle, as all processes can be tailored to different budgets. “In Mexico, most companies are SMEs, which have large gaps in terms of digitalization. At Forte Innovation, we break stigmas regarding digitalization, such as the cost or maturity required of a company to start its digitalization process. At present, budget is no longer a barrier for a company to start its digital transformation,” she said in an interview with Mexico Business News back in August.

“Digital evangelization remains an important issue and the message is clear: if companies fail to digitalize, they will disappear. This is something we have already seen with companies like Sears, Blockbuster and Kodak,” said Luis Aaron Jiménez, Co-founder and President of Assetel in an interview with MBN. However, he says, while big Mexican and international companies have the ability to adapt, apply and get the benefits from Industry 4.0, SMEs do not know or care, since they lack the time and the resources to do so.

Photo by:   qi xna, Unsplash
Andrea Villar Andrea Villar Journalist and Industry Analyst