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Problems Faced by SMEs

Small and Medium Enterprises (SMEs) are often confronted with problems that is uncommon to the larger companies and multi-national corporations.  These problems include the following:

Lack of IT Support

IT personnel are in high demand and are often attracted to bigger companies and MNCs.  It is very difficult for SMEs to attract good IT personnel.  It is even more difficult to retain them.  Moreover, good IT personnel are expensive and may not be affordable by most SMEs.

Lack of IT Literacy

Many of the employees in SMEs started from the ground up after working with the company for many years.  Some of them are often holding supervisory and managerial positions. These employees may not be IT literate and often have high resistance to the changes in the working process that they are comfortable with after many years.

Lack of Formal Procedure and Discipline

Most SMEs do not have formal procedure or often these are not documented.  Furthermore, there is tendency for these procedures to change frequently.  This makes it difficult for third party and newcomer to understand the existing business practices and match them with the IT process.

Uneven IT Awareness and Management Skill

As company grows, new managers are often introduced into the company.  There will also be old managers who are promoted from the rank and file.  Some of these managers may not been trained in the leadership and management skill.  These uneven skill among the managers often caused conflicts during the implementation.

Lack of Financial Resources

As a SME/SMI, financial resources are often limited.  This often force company to select a solution, which appear to be cheap initially.  However, the hidden costs will start to emerge during implementation.  This sometime causes the project to be abandoned or sometime sent the company into further financial crisis.

Lack of Human Resources

Implementations of some bigger scale IT project especially those that involve business process across different departments or require large amount of initial data entries require human resource during the implementation.  Some SMEs are often in the stage of frequent fire fighting and shortage of manpower.  This makes it very difficult for them to allocate time to carry out implementation.  Furthermore, there is always a conflict between getting the daily routing work going and to do the “Extra” IT implementation.

Lack of Experience of Using Consultants

A good consultant often save time and effort, and help to prevent pitfalls during the IT projects.  However, most SMEs are lacked of experience in working with consultants.  The lack of knowledge in the field of IT makes them difficult in identifying good consultant for the projects.  They often feel that the consultant costs is too high and they can handle it with their own staff.  If the company has no staff that are experience and knowledgeable in the IT project, avoiding external help often costs more to the company eventually.

Link to Solutions to the Problems faced by SMEs

Link to SME Services

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