Technical barriers for small and medium businesses

Small and medium businesses have to go through many obstacles in the process of implementing new technologies for their business development. In order to face the competitiveness of larger companies and survive for years in the business, SMEs need to adopt new ways of thinking using technology. Globally, many entrepreneurs have realized that successful adoption of new technology has direct impact on business performance resulting in increased annual revenues. It not only increased their ability to innovate but also supported them to measure up the rising competition. With regards to technology acquisition and development, not all SMEs are successful because of various constraints in capital, skilled workforce and lack of expertise in understanding the new high tech implementations.

Unfortunately there are huge list of barriers for SMEs to facilitate the technological changes in their businesses but the most common are mentioned as below -

Afraid of business losses

While larger firms are very quick in adopting new technologies for optimizing their businesses, small and medium enterprises are still hesitant to embrace the high tech solutions because they are not sure the tools implemented are going to raise the potentiality of their business. Whether it is a new start-up firm or an existing small and medium enterprise, companies are not ready to risk their capital on the ambiguous things. Some SMEs are happy running their businesses with the existing system rather than implementing innovative technological solutions because they are more afraid of losses than getting excited by the gains achieved by implementing them.

Technology is expensive

Generally, SMEs are typically dynamic and exhibit organizational flexibility by responding quickly to the changing circumstances. It is not difficult for them to integrate new technology into their system if needed but the only barrier that is blocking them from moving towards innovation is insufficient financial resources. As they have very low budgets allotted, these companies basically look for commercially viable solutions that are simple and low cost with reduced risk. It may sound funny, but there are still some small and medium firms that are following the old methods of accounting, spending lot of working hours in calculating the things manually instead of implementing the automated processes. What they don't realize is, they are not using the company resources wisely and losing the effectiveness by unnecessarily wasting the actual work hours of the employees. Hence, it is very important for every business, whether big or small, to recognize the benefits of implementing new technology.

Not ready to take the technical risks

The SMEs that have identified the importance of technology are satisfied with the existing strategies but not ready to move to higher level because of technical risks. For instance, the new buzz word of cloud computing is very profitable for small and medium companies both in terms of efficiency and business growth but very few have implemented it because they anticipate higher technical risk. What they don't realize is small and medium businesses are at higher risk for data breaches and frauds than larger firms. Moving to cloud not only adds higher security for their business data, but also helps them to collaborate better.

Lack of expertise

Another biggest barrier in embracing the high tech solutions is lack of skilled workforce or expertise to meet the technical challenges. Either they have to hire new workforce with greater abilities to meet these requirements or they have to enhance the skills of the current employees by proper training. The second option is time consuming and again uncertain because some employees have rigid mind-sets and do not respond quickly to the changing needs of the business. Due to this lack of expertise and inability of workers to manage the technical issues, many small and medium business owners are in a state of confusion in rolling out new technological methods for their business.

Smeph.net is a website about Small and Medium Entity Promotion in Hyderabad that contains exclusive articles, webinars, white papers & latest industrial updates to support and guide professional SMEs run their businesses successfully. We are thankful to professional SMEs like Marvist for helping in developing content to spread the awareness.

Vijay Kumar is experienced author; interested in writing blogs and articles on Smb methodologies and concepts.