Issues and Challenges of Information and Communication Technology (ICT) in SME Management

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[Dr. Nazrul Islam. (2016). Issues and Challenges of Information and Communication Technology (ICT) in
SME Management. Presented as a Keynote Speaker at the ICMIT 2016 Conference held on 17 August 2016
at Indus International University, Himachol Pradesh, India]
Issues and Challenges of Information and Communication Technology (ICT)
in SME Management
Dr. Nazrul Islam
Professor & Dean, School of Business
Uttara University, Dhaka, Bangladesh
Email: nazrulku@gmail.com
Background
Information and Communication Technology (ICT) is an integral part of business management
now-a-day. It is inevitable for the smooth running of business irrespective of size and complexity.
Due to the rapid development of ICT and its huge use in all spheres of our lives, businesses are
also substantially influenced by it. Now, the resources of the businesses are primarily managed by
using ICT supports that helps perform tasks faster and more accurate than before. But the
developing countries are still struggling to introduce ICT supports in all areas of business
management processes as the effort is substantially hindered by a strong but ineffective work
culture. Therefore, to use ICT in business management we need to know the issues and challenges
of it.
Management of business is a challenging task due to the increase of human complexity at work.
The efficiency of the management substantially depends on the instruments that are used by the
managers to manage people and other resources. When the business project is labor-intensive in
nature, the manager is unable to use communication technology. But when it is capital-intensive,
the manager is in a position to use ICT that brings efficiency at work and enhance performance.
Information and Communication Technology (ICT) includes any type of software and software
related activities and solutions such as, ICT services, ICT applications, and software products and
embedded software. Examples of ICT solutions are customized software development, mobile
application development, website design and development and the design of graphs and
animations. Therefore, Information and Communication Technology (ICT) is an integral part of
business management in any country of this world.
The use of ICT brings numerous benefits for the business company. In Small and Medium
Enterprises (SMEs) sector, it is more important where little profits might be doubled. The study
reveals that ICT should be used more in SMEs within the sector of services of a company. 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 of the users. Therefore, a
comprehensive approach of ICT is useful in any country for the efficiency of SME management.
Research shows ICT usage within SMEs in Oman is moderate in common technologies, but limited
in the more sophisticated technologies such as wireless, data storage and network security
solutions. It was noticed that Omani SMEs are taking a comprehensive approach to their ICT

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investment focusing on both strategic and operational aspects. The result of this study shows that
Omani SMEs are making reasonable investment in ICT and there is a modest competition among
the SMEs. The main driving forces for ICT investment is to provide better and faster customer
service, to stay ahead of competition and following top management strategy. The competitive
strategy for the majority of SMEs was to provide high quality products and services to their
customers and to establish long term relationships with customers. The respondents have realized
business benefits of ICT adoption such as, better customer relationships, increase in revenue,
reducing costs, etc. The respondents are also very positive about increasing their business
performance in future. With regard to barriers to ICT investment, three fourths of the firms feel
that a lack of necessary internal skills is a major barrier. The respondents also feel that the costs of
implementation of ICT are too high. Lack of availability of relevant information and advice on
suitable and effective technologies is also one of the major barriers. Other barriers include SMEs
having no time to implement ICT projects, lack of top management supports, bad experience in
the past and government regulations and requirements.
Another study shows that the use of ICT to improve business growth strategies of SMEs. The role
of ICT in improving business delivery services and innovations in SME is farfetched. ICT provides
the bedrock on which SMEs can build their business information systems that aims at improving
their business processes, customer relations and efficient delivery of goods and services to satisfy
the needs of cherished customers. Providing a proper field of innovation in small industries for
developing technology with local conditions is considered important. ICT is the solution in this
regard. Another study concludes that a perceived benefit has a strong, significant relation to ICT
adoption. It is expected since past literature has consistently shown that perceived benefit has a
significant and positive influence on the ICT adoption.
SMEs with large number of administrative applications readily support ICTs adoption as a tool for
management control, operational control and administration. As such, the SMEs in the developing
nations should integrate into the global supply chain, bid for outsourcing businesses, and increase
their own productivity. The key for SMEs is that the ICT provides so many options and avenues
to take advantage of in a way that big business just can't or doesn't see value in. Research shows
that it is certain that the adoption of ICT in Nigerian SMEs help the SMEs to grow and increase
their competitiveness. It confirmed that ICT adoption in Nigerian SMEs can assist them to easily
process and store information, communicate with customers and business partners and thereby
assisting in the development processes.
The Malaysian study found empirical evidence to support the notion that despite the vast majority
of the firms already using computers in their organizations and being connected to the internet are
impacted by ICT shortages such as employee computer skills, lack of adoption of web applications,
databases, and other business applications. Another interesting finding is that the uses the internet
to interact with their suppliers, the same SMEs was not keen to use the internet for transactions
with financial institutions due to perceived concerns over privacy and security. The study also
found that there are number of factors that hinder SMEs willingness to use ICT in their
organization. Among the major hindrances, finance, employee education levels, in relation to ICT
skills, the high cost of ICT infrastructure and non-availability of skilled human capital present
major challenges for Malaysian SMEs in the adoption of ICT.

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Issues & Challenges of ICT-Use in Different Sectors of SME
In past, land properties and the wealth were considered very important in a country. Later on,
industrial revolution changed this idea and introduced technology at the manufacturing level of the
companies and mass production started. In recent years, information revolution changed the whole
idea about the wealth management systems in developing countries which is now called
information and communication technology (ICT). Management of business in developing
countries is almost traditional in nature. Most of the companies are still using traditional systems
for controlling the activities of the businesses. However, this situation has been changing very
rapidly. Now, large corporations are using sophisticated ICT in managing their activities. But the
small and medium enterprises (SMEs) are hardly using the latest ICT support in managing their
activities. This revolution encouraged the managers to collect, store, process and distribute
information. The following issues are concerned for UCT use in business management.
E- Governance
The term e-Governance is the effective and efficient use of modern information and
communication Technologies (ICTs) such as, Internet, LANs and Mobile Phones to improve the
activities with a view to establish good and transparent governance in the country. Generally, e-
governance is composed of three components such as, government, citizen and business houses.
This means, governance to government, governance to citizens and governance to business are
integral parts of ICT.
E-Commerce
E-commerce refers to the buying and selling products and services over electronic systems through
internet and other computer networks. E-commerce involves digitally enabled commercial
transactions among the organizations and the customers. The most popular medium of e-
commerce are electronic data interchange, electronic mail (e-mail), World Wide Web (WWW),
internet applications, and network applications. The common applications of e-commerce are (i)
e-mail (ii) enterprise content management (iii) instant messaging (iv) news groups (v) online
shopping and order tracking and (vi) online banking. Now, if we look at developing countries,
we’ll see that the present situation is not favorable for e-commerce. The reasons are concerned
with the overall development of ICT infrastructure and the mindset of the users in the developing
countries.
Management Information Systems (MIS)
Management Information System (MIS) broadly refers to a computer-based system that provides
managers with the tools to organize, evaluate, and efficiently manage departments and sub-
departments within an organization. In order to provide past, present and future prediction, a
management information system can include software that helps in decision making, data
resources such as databases, the hardware resources of a system, decision support systems, people
management, and project management applications, and any computerized processes that enable
the department to run effectively and efficiently.

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Farming and Agricultural Development
Countries with a very high potential of growing food grains and other agricultural products might
have more use of the ICT for its growth and development. The performance of this sector has an
overwhelming impact on major macroeconomic objectives like employment generation, poverty
alleviation, human resources development, food security, of the country. Research shows that
mobile telephony, computers and internet connectivity have the potential to deliver the information
at the field level of agricultural country which is also related to business. However, the information
content and the applications need to be developed through a bottom up approach in order to achieve
the objectives of meeting the information needs of the farmers. The reasons could be attributed by
the lack of use of technology in production, financial and structural relationship, natural calamities,
lack of bargaining power of the farmers, lack of productivity of the farmers, price and demand
fluctuation in input and output markets, lack of pricing information for the output market, and lack
of agricultural knowledge.
Health and Medication
In developing countries, preventable diseases and premature deaths are still very high. Problem of
access to basic health services affects distinct regions, communities, and social groups. ICTs have
the potential to impact almost every aspect of this health sector. In public health, information
management and communication processes are pivotal. Research shows that that business model
of Bangladesh are more likely to target a better-off population, who can either pay a fee for the
services, or enable a website to generate revenue from selling goods or services online. But the
ICT facilities are still not developed at the mass level in Bangladesh to grasp that opportunity.
Development of Manpower
Information Communication Technology (ICT) plays a significant role in developing human
capital through bringing a revolutionary change in education systems specially focusing on the
development of rural schools by the use of ICT in imparting education to the students of primary
and secondary levels. ICT in education systems is very much important. One of these facilities is
to digitize the academic books both in primary and secondary levels and distribute these across the
country so that the students in rural areas can download the books from the Internet at free of cost
which is, of course, barred by the supply of electricity.
Infrastructural Development
Poor and inefficient infrastructures undermine the economic development of a country. The
government needs to address the problems systematically and channel investments towards
expanding its highways, railroads, seaports, and airports. Modernizing telecommunications
infrastructure and introduce the Internet for the mass people which are still in the process of
developing countries.
Therefore, the issues discussed are very much important for business management in developing
country context. If the developing countries take this into account and can reflect it in their policies
the challenges for using ICT in Management of SMEs like poor telecommunication infrastructure,
ICT education of the people, inadequate skilled manpower, etc. might be overcome.