SMEs are an important item of the economy of all countries and especially of Mexico. Mexican SMEs, unlike Asian ones, have not actively participated in the use of information systems, such as SCM (Value Chain Management), E-Commerce (Electronic Commerce), EDI (Electronic Data Interchange), etc. and they run the risk of falling into a "digital divide" from which it will be difficult to get out, and thus lose competitiveness in this globalized world.
This research focuses on various aspects of the application of information systems and on some of the costs of not having them, in addition to talking about some errors in the use and abuse of some of the IS applications.
1. GENERAL INTRODUCTION
Definition.
According to the Ministry of Economy, companies are classified as:
|
Size of the company |
Industry |
Commerce |
Services |
|
Micro |
1-30 |
1-5 |
1-20 |
|
Little |
31-100 |
6-20 |
21-50 |
|
Big |
501 + |
21+ |
51+ |
According to statistical studies by ECLAC, they show that SMEs in Mexico employ 78% of the economically active population, and that they contribute 68% of GDP.
It is estimated, on the other hand, that they are 4 times more inefficient than the large ones. It is here where the IP and the Government should coordinate to advance in the economic and technological fields. In fact, there is a program under the Ministry of the Economy in which it tries to promote this sector. In it, they offer support to SMEs such as: List their potential clients by business sector, training, or financing options. In conjunction with Microsoft, they offer network services for small businesses, such as support for commercial transactions, rental of use of Microsoft Office 2000 SMEs, etc., the Federal Government tries, is aware and is part of its strategy to support SMEs.
Due to their growth potential and their number, SMEs are a niche that some information systems companies are already considering attacking. Companies such as Oracle, Microsoft, Avaya and Nortel are some of those that count within their business strategies to maximize sales in this wide market.
SMEs have the great challenge of adapting to a globalized world and fast in its changes and demands. They should no longer settle for domestic markets, it is no longer their comparative advantage. The Internet is a powerful weapon, and at the same time threatening for these companies.
Ing. Raúl Alonso Vazquez: Sales Manager for Fairchild Semiconductor, Master's degree student at ITESM Guadalajara, [email protected]
2. Statistics
To put in context, how is the Information Systems market doing, we will start by analyzing in Mexico the percentage of companies that are equipped with computer equipment.
In Table 1 we show a statistic of the companies divided by activities and by size.
It is observed that the field in which small companies have a relative majority is in Construction, in second place in Agroindustry, followed by manufacturing.
TABLE 1
Now let's analyze table 2. This indicates the companies that have at least one computer equipment and defines how many do have Internet access.
Table 2
ESTABLISHMENTS WITH AVAILABILITY OF COMPUTER EQUIPMENT
|
Activity sector |
Internet access |
Establishments with Computer Equipment |
||
|
Yes |
Not |
|||
| Agroindustry |
994 |
1,267 |
2,261 |
|
| Manufacturing |
107,859 |
168,575 |
276,434 |
|
| Building |
5,555 |
6,357 |
11,912 |
|
| Commerce |
85,336 |
395,164 |
480,500 |
|
| Services |
111,401 |
206,752 |
318,153 |
|
| Total |
311,145 |
778,115 |
1,089,260 |
Source: National Survey on Computer Conversion Year 2000 in the Non-Financial Private Sector. INEGI, 1998
We conclude that 100% Agroindustry companies that have computer equipment 46% have Internet access, 39% in Manufacturing, 46% in construction, 17% in Commerce and 35% in Services.
These data indicate that although the large industries mostly have computer equipment, not all access the global network, so it is not part of their business strategy to integrate into the management of the value chain through through it. Therefore, much less SMEs.
SOLUTIONS What can SMEs use to take advantage of Information Systems?
3. CRM (Customer Relationship Manager)
A point of concern in the implementation of SI (Information Systems), is that according to OlgilvyOne 70% of the money invested in systems such as CRM is not used. This despite the fact that CRM (Customer Relationship Management) has been around for more than 15 years.
If SMEs decide to use resources such as CRM, they must take into account the four risks of this system:
1. Implement CRM before creating a business strategy.
2. Start CRM before adapting the organization for that new system.
3. Assume that more CRM technology is better.
4. And do not scare customers with this system
Customer retention based solely on brand loyalty is no longer valid, quality products and services can be obtained by more than one supplier.
Before investing, they should think about what they want to achieve with the technology acquisition. There are cases of success in CRM management, such as Seagram, which although it is a large company, explains how they have been able to plan their marketing strategies in different sectors of the population with the appropriate information, with this information they have been able to establish "general patterns customers ”by region, thus maximizing the impact of their advertising.
The challenge is therefore to find what is important to "know" in each business.
One of the main mistakes when using CRM is not knowing what to do with so much information. That is the case of an airline that its databases of "Frequent Flyer" and that of "Reservations" are not related. When filling out an application for a “frequent traveler” you are asked for various data that are key to improving service and exceeding customer expectations. For example, if you note that you are vegetarian and that you like to sit in the hallway, when making a reservation online and giving your frequent flyer number, the reservation system should extract that information from the Frequent Travelers database and automatically write it down as vegetarian and offer you an aisle seat. This would be well received by customers.
This can also be used by SMEs, such is the case of a Pizzeria in the neighborhood that could have key customer information in its database, with this it could create promotions based on their profile. For example: Offer a discount on his birthday, offer a promotion on Pizzas that he has detected that he orders more, talk to him when he offers the general public 2X1 promotions, free soft drinks, etc.
CRM is therefore a very useful tool, if it is well managed.
4. E-Commerce (Electronic Commerce)
According to ECLAC, in Latin America the term electronic commerce basically means consumer-oriented retail trade. Unlike Asia, where a large number of businesses are increasing that allow the implementation of communications and information technologies, including intranet, exanet, EDI (Electronic Data Interchange), private networks, and business applications in networks with multimedia. From this perspective, in the long term the prosperity of electronic commerce in Latin America will require the diversification of a number of directions, including the diffusion of the capabilities of electronic commerce in SME applications in order to reduce the existing “digital divide” between companies.SMEs should be an integral part of local knowledge-intensive networks to create alliances with large national firms, transnationals as well as so-called “clusters” (business groupings), they should promote web-based businesses, and connect with technologies of communication and systems. In this way, SMEs may be the most benefited with the Internet and electronic commerce.
The expansion of communication technologies and systems should facilitate the matching of SMEs in the area of export promotion by facilitating the traditional restrictions that they face in the areas of access to markets, information, human resource development, capital investment. and credit, etc.
Statistics confirm that in September 2000 there were already around 378 million online users, the United States and Canada represent 40% of them, while Europe and Asia represent 28% and 24% respectively. Latin America and the Caribbean represented 5%
Electronic commerce is restricted in Latin America, on the one hand by the number of telephone lines per 100 inhabitants, while the United States has 66, Mexico has 12.5, according to ITU, Mexico in July 2000 had 2.5 million users of Internet representing 2.5% of the population, and according to forecasts by MCM Telecomm, the number of WEB pages in January 2001 was close to 2Million, with more than 300 thousand servers.
It is estimated that by 2003 between 10 and 25% of transactions in terms of international trade will be made through some form of electronic commerce. (UNCTAD 2000B). This is particularly important in developing countries whose exports rely primarily on commodities, semi-manufactured products, and manufactured goods. Developing countries will benefit from this mainly by obtaining lower transaction costs and reaching competitive levels in the area of consumer products.
According to ECLAC, the magnitude of electronic commerce in Latin America in 1998 was 167 million dollars, very low compared to Japan, which a year later reached 3,200 million dollars.
Here are some projections for Latin American countries:
Jupiter Latin American Projection Summaries (January 2000)
Total Online Spending By Country (In Millions of USD)
|
1999 |
2005 |
|
| Brazil |
$ 121 |
$ 4,256 |
| Mexico |
$ 25 |
$ 1,542 |
| Argentina |
$ 15 |
$ 1,094 |
| Chile |
$ 7 |
$ 312 |
| Venezuela |
$ 4 |
$ 348 |
| Peru |
$ 5 |
$ 164 |
| Colombia |
$ 7 |
$ 336 |
| Other |
$ 8 |
$ 277 |
|
$ 194 |
$ 8,330 |
Note: Numbers do not add due to rounding.
Total Online Spending By Category (In Millions of USD)
|
1999 |
2005 |
|
| books |
$ 28 |
$ 789 |
| Videos |
$ 4 |
$ 180 |
| Music |
$ 5 |
$ 303 |
| software |
$ 10 |
$ 375 |
| Electronics |
$ 18 |
$ 343 |
| Dress |
$ 6 |
$ 387 |
| Peripherals |
$ 9 |
$ 268 |
| Personal computers |
$ 70 |
$ 1,773 |
| Travels |
$ 15 |
$ 1,395 |
| Pantry items |
$ 16 |
$ 1,141 |
| Others |
$ 13 |
$ 1374 |
|
$ 194 |
$ 8,330 |
Note: Numbers do not add due to rounding.
Number of Online Shoppers (In Millions)
|
1999 |
2005 |
|
| Brazil |
0.9 |
10.8 |
| Mexico |
0.2 |
4.3 |
| Argentina |
0.1 |
2.8 |
| Chile |
0.1 |
0.9 |
| Venezuela |
0.0 |
1.1 |
| Peru |
0.0 |
0.6 |
| Colombia |
0.1 |
1.2 |
| Other |
0.1 |
1.0 |
|
1.4 |
22.7 |
Note: Numbers do not add due to rounding.
Number of Online Users (In Millions)
|
1999 |
2005 |
|
| Brazil |
5.8 |
29.1 |
| Mexico |
1.3 |
12.7 |
| Argentina |
0.8 |
7.0 |
| Chile |
0.5 |
2.7 |
| Venezuela |
0.3 |
3.8 |
| Peru |
0.4 |
2.4 |
| Colombia |
0.5 |
4.4 |
| Others-Latin America |
1.0 |
4.5 |
|
10.6 |
66.6 |
Note: Numbers do not add due to rounding.
© 2000 JUPITER COMMUNICATIONS
As can be seen, electronic commerce is not used in Latin America, not even in a very small part of its use in other countries. Mexico should promote this information technology tool.
5. COSTS ASSOCIATED BY THE LACK OF INFORMATION SYSTEMS IN INVENTORY MANAGEMENT.
According to a survey by WhereNet:
- 84% of respondents use manual methods to locate and track inventory. 100% agree that your data capture is inaccurate due to human intervention (wrong capture, wrong scan, lack of it). 64% of those surveyed say that the average search to locate an item in the warehouse is around 30 minutes or more. 10% say that as a result of the loss of inventories the company has to take financial losses of at least $ 500,000 usd. 59% of those surveyed affirm that the man-hour costs in the search for lost inventory is an average of $ 25,000 usd 60% affirm that their company spends $ 50,000 usd on average annually in anticipation of such inventory losses. 49% comment that the lack of connectivity between their inventory / assets,the people and the information systems that manage those assets are the main barrier to the good management of the value chain.
Wherenet offers solutions for inventory management by means of identifiers that emit electronic RF signals to a concentrator, with a specific software application, customers can prepare reports as well as see on their computer the exact location of some material, with this they achieve streamline identification and search systems, as well as electronically capturing material movements (loading and unloading) avoiding human errors.
6. CONCLUSIONS
I consider that it is very important that SMEs receive the support of the government, to be able to compete with globalization.
The dilemma will be regarding which tools will be useful and which will not. The SMEs that are better prepared with basic technological knowledge, with the knowledge of their clients, and with a better business vision, will be the ones that will be able to compete for the loyalty of their clients, CRM has many benefits, but like all systems, its capabilities will only be well used to the extent that management really knows what is valuable and strategic for their company to manipulate.
SMEs should plan their strategies and not try to cover more than their possibilities give. One of the mistakes is trying to always go for the biggest thing, and they won't necessarily have the capacity to handle it; in fact, it seems more correct to go small and once mastered, they can move to other niches.
The Government plays a key role in the development or not of SMEs, its e-Mexico project is in its infancy, but at least it is progress. They should propose education plans for them, in addition to fiscally promoting incentivizing the use of IS.
I hope we can see this done and make our SMEs an example in Latin America.
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