By John Mark V. Tuazon
Computerworld Philippines
March 4, 2010

Small and medium enterprises (SMEs) still have a lot to catch up with in implementing technological innovation in their own businesses, especially because acquiring such tools can be expensive these days, a study on SME challenges and strategies conducted by an economic research firm revealed Wednesday.

According to the 2010 SME Report conducted by the Institute for Development and Econometric Analysis (IDEA) and commissioned by Bayan Business, “large proportions” of SMEs in the country are not e-ready, despite many having enough capacities for e-commerce.

“E-commerce for SMEs is an untapped opportunity for growth,” said Dr. Cayetano Paderanga, former director general of the National Economic and Development Authority (NEDA) and chairman of IDEA. “For example, telecoms and Internet usage is limited to the most basic needs and functions.”

Financial constraints, according to Paderanga, are one of the major roadblocks for SMEs’ growth. “They are therefore given no choice but to prolong the use of outdated and inefficient technologies,” he pointed out.

SMEs—which comprise about 90% of business establishments in the country—are also pressed to grapple with the difficulty of keeping good IT personnel in place, because they often get better opportunities abroad or in larger corporations.

In addressing this technological gap, Paderanga suggests an initiative by vendors to tailor-fit IT solutions for SMEs. “SMEs are labor-intensive, so they don’t have time to focus on technology,” he said. “Lack of consultation with SMEs results in solutions that inadequately address their requirements.”

As a way for them to focus on their core competencies that will further propel them to growth, Paderanga advises SMEs to consider outsourcing some of their non-core functions. “Outsourcing has the potential to address the shortage since the industry now provides a growing breadth of back-office services,” he explained.

Additionally, leveraging the powers of the Internet for retailing can also provide prospects for expansion. “Setting up a website can be virtually costless with free web servers or hosting services,” he added.

The study, an effort by Bayan Business to further understand the challenges besetting SMEs today, is available as a handbook entitled B2BIZ: a Guidebook for the Filipino Entrepreneur, and can be obtained free of charge by current Bayan Customers.

Anicero Franco III, vice president of Bayan Business, said the initiative is Bayan’s effort to make SMEs “e-ready” through technological solutions that answer their pressing problems. “For now, we provide SMEs with basic voice, data and Internet services,” he shared. “In the future, we are looking at providing managed services and hosted applications for them.”

Franco said they are currently upgrading their national network to achieve more than enough capacity to service SMEs, which currently comprise around 30,000 of the company’s present clients. “We have upgraded our network in anticipation of the growth of the SME sector,” he clarified.

Bayan Business is Bayan Telecommunications’ business solutions arm, and comprises as much as 35% of the telecommunications firm’s entire business.

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