Summary
Due to their size, MSMEs have advantages, such as their administrative ease, but due to their size they have disadvantages, such as economic reasons, they live up to date on their income, therefore it is difficult for them to grow, and these same reasons put endangered its existence. All of this is the result of empirical management by the owner, which affects the overall performance of the company.
The MSMEs in Mexico 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. And in order to stay and grow, they need to rely on Information Technology (IT) tools such as Decision Support Systems (SSD).
Introduction
The definition of a company, regardless of its size, is the same anywhere in the world, since its definition will always have the same necessary components so that it can be said to be a company. According to (Andersen, 1999) cited in (Zorrilla), a company can be defined as:
"An economic unit of production and decision that, through the organization and coordination of a series of factors (capital and labor), seeks to obtain a profit by producing and marketing products or providing services in the market."
In a very general way, all the micro, small and medium-sized companies (MiPyMEs) almost always share the same characteristics (Zorrilla). Among the most important are:
- Capital is provided by one or two people who establish a partnership. The owners themselves direct the running of the company; Its administration is empirical. Its number of workers employed in the business grows and goes from 1 to 250 people.
From the above characteristics, we can see that, as advantages, MSMEs are characterized by their administrative ease, but, regarding their disadvantages, there are economic reasons, such as inflation and devaluations; They live on their income, therefore it is difficult for them to grow, and these same reasons put their existence in danger. All this is the result of an empirical administration by the owner, which affects the general performance of the company (Zorrilla).
The MSMEs 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. (Vázquez) and in order to stay and grow, they need to rely on Information Technology (IT) tools such as Decision Support Systems (SSD).
Importance of MSMEs
Current global trends in the business field recognize that MSMEs are a fundamental part of the economy of any nation. More than 98% of the universe of formal and informal companies in the different countries are located in this group, also participating in a very high way in total sales, exports, GDP and employment in their countries (Marcelo & Echeverría). Any general difficulties in these smaller organizations adversely affect the macroeconomic and social indicators of the country in question.
According to the Mexican Ministry of Economy, the total of MSMEs amounts to 531,222 companies, which represent 97% of the total companies in the country, as shown in Table 1.
Table 1. Composition and Distribution of MSMEs in Mexico (Ministry of Economy of Mexico).
Due to their large volume, the importance of MSMEs in innovation and their role in facing the challenges of competitiveness in each country is undoubted, given that these organizations cover a high% of employment (Vázquez The MSMEs in Mexico employ 78 % of the economically active population, and that contribute 68% of GDP according to the Ministry of Economy.
It is estimated that MSMEs are 4 times more inefficient than large companies (Vázquez). It is here where private investment and the Government must 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. It also works with private companies to support MSMEs. For example, in conjunction with Microsoft, they offer network services for small businesses, such as support for business transactions, rental of use of Microsoft Office 2000 for small businesses, etc., with this the Federal Government shows that it is aware and is part of its strategy to support MSMEs.
Support for Decision Making in MSMEs
The administration in every company is part of a process in which the goals of the organization are its main objective and its activities revolve around decision-making. Organizational results are directly linked to the effectiveness of those decisions; and if they do it using SSD, they drastically reduce the risks of these decisions (Bobadilla, 2001) and administrators can more efficiently perform their primary task within the organization: decision-making (Caldera, 2001).
Today companies operate in an environment that is constantly changing and this trend is increasing, so some of the reasons why decisions are more difficult to make than in the past are (Bobadilla, 2001):
- Greater number of available alternatives Higher cost in administrative errors due to the complexity and magnitude of the errors Difficult access to the information necessary to make decisions Quickness with which decisions must be made.
At present, it is a great challenge for an organization to be able to control the variables of planning, organization, control and direction of the company in the changing environment in which they operate. In order to have control of them, it is necessary to make the right decisions that can lead the organization in the desired direction (Arzate).
Seeing it this way, an SSD is an important IT for the manager, which can be used to provide timely data and analysis that support their decisions, based not on simple judgment or intuition, but on information generated through deductive and analytical methods (Caldera, 2001).
An SSD is not yet capable of making decisions on its own, it simply helps administrators and directors to develop better strategies, and even simulate what could happen in the future with the decisions made. What is a fact is that an SSD is a unique complement that more companies should be adopting, especially MSMEs, which are companies that have to deal with a lot of competition and always know how to take the best course and develop their products and services (Arzate).
In Mexico, large companies have technologies that help them make these decisions. But in the MSMEs this is not the case, even though they are a very important factor in the development of the country. In MSMEs, decision-making is often carried out by common sense, or by what the administrators think, but there is no control or procedure to be able to make those decisions (Arzate).
It is evident that in the MSMEs a new business culture is required to make the appropriate decisions and improve production, have a total integration of the company, and improve relationships with customers. Hence the need for MSMEs to resort to IT and SSDs.
Need for MSMEs to resort to SSDs
Companies are beginning to realize that, given globalization, the use of technology is no longer a luxury, and it becomes an integral part of the companies' business model. Faced with this, needs arise that to satisfy them require the development and implementation of projects that involve IT (Valenzuela), some of which are (Valenzuela) (Bobadilla, 2001):
- Improve production and productive administration Improve company administration Improve information reliability Better strategies against the competition
The common denominator of these needs is improvement, which implies automation and efficiency in both internal and external processes of every company (Valenzuela), which is achieved by making decisions based on technology.
In the case of MSMEs, decision-making is carried out empirically by its own owner to administrator as each situation is presented. Furthermore, decision-making in these semi-structured or unstructured situations is complicated by the company's limited resources and the lack of experienced personnel (Gupta, & Harris, 1989).
Although MSMEs are an important part of the economy of all countries and especially in ours, Mexican MSMEs have not actively participated in the use of IT, including SSDs and run the risk of losing competitiveness in this globalized world (Vázquez). This is shown in Table 2, which presents a statistic of Mexican companies divided by activities and by size regarding the use of computers (Vázquez), where only 28% of the micro-companies, which constitute a large part of the businesses in Mexico, have at least one PC (Valenzuela).
Table 2. Establishments with IT Equipment in Mexico in 2000 (Valenzuela).
These data indicate that most of the large industries have computer equipment, but not the MSMEs (Vázquez). The fact that MSMEs need IT does not necessarily mean that they are investing in this area, or with enough speed to be able to maintain an acceptable level of competitiveness in the market. Unfortunately, at present many companies do not have this type of systems, stagnating in product innovation, acquisition of new customers and suppliers, as well as the correct automation of processes (Arzate).
The MSMEs need to incorporate technology into their business strategies in order to be more productive and increase their degree of efficiency, since by achieving their modernization, the modernization of the country in general is achieved. According to the foregoing, different actions are proposed to achieve the modernization of Mexico, and in many of them the presence of the Government is inherent. Thus, it can be said that the task of incorporating IT, especially SSD into the MSMEs would result in the modernization of Mexico, and that the task involves 3 agents (MSMEs -Government-IT Companies) (Valenzuela).
Barriers to the use of SSD in MSMEs
The MSMEs require the incorporation of technology to be able to adapt to the new times. This will allow efficiency, speed in response time to customers and suppliers, allowing the organization to be more productive. (Arzate). However, it is worth mentioning that there are obstacles or barriers that intervene in the acquisition and implementation of IT and SSD within MSMEs: 1) resistance to change, 2) definition of requirements and 3) hardware and software (Valenzuela)
Resistance to change is the most influential barrier and the cause of many MSMEs lagging behind when it comes to technology. This resistance to change includes different aspects, such as: 1) fear of the use of some technology by workers, 2) errors in the use of new technology, 3) change in culture and behavior and 4) little participation of end users in the survey of requirements, design and development of applications (Valenzuela).
The change an SSD produces requires that key representatives, that is, administrators, are willing to use IT to change the way they make their decisions. There must, of course, be ways to reduce resistance to change and gradually adopt these technologies that will help not only the development of the company, but also the country in general (Arzate).
For the implementation of an SSD to be successful, it requires a well-established plan that considers not only the technical aspects of the change process, but above all, the resistance that may be found among the main actors in said process (Caldera, 2001).
The second barrier is the poor definition of the requirements of the application to be implemented, be it specific or standard. This barrier includes 1) the lack of commitment of those involved, 2) the scarce coordination between the hierarchical levels of the company and 3) the lack of experience in the development and implementation of projects of this nature (Valenzuela).
On the other hand, there is the obstacle of hardware and software where many of the times companies do not have efficient technical support, the existing computer equipment in companies is insufficient for the performance of basic activities.
The SSD offer for MSMEs
Previously there were two key factors that affected the decision maker to make use of an SSD: 1) The cost of these systems and 2) the need to require the support of a technical person for the use of the SSD (Chandler, Trone & Weiland, 1983). But today this has changed.
Due to their potential growth and number of these, MSMEs are a niche that some IT 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 (Vázquez).
In recent years, IT companies have turned their eyes towards MSMEs. This is due to the great existing potential since with a quality solution proposal, with accessible costs and technical support capacity, they can attack a market that has been gaining importance. Software companies are beginning to realize that they can create economies of scale that would be reflected in significant profits within the computer industry (Valenzuela).
Companies that provide IT to MSMEs do not have an easy task. They must be aware that the acquisition of technology by MSMEs has to be justified, since it involves an expense. The justification of any technological investment implies knowing for sure what the return on investment will be and the cost benefit that it will bring, as well as the tangible impact it will have on the business (Valenzuela).
Furthermore, in order to offer a quality solution tailored to MSMEs, IT companies need to really understand, through in-depth analysis, the needs of the technology user. The challenge for suppliers is diversification and orientation to the business segment through the generation of practical and functional solutions to requirements (Valenzuela).
Table 3 shows some of the large IT companies that in recent times have focused part of their efforts on developing projects focused on MSMEs (Valenzuela).
One of the companies that is making the greatest effort to offer IT and SSD solutions is Microsoft, which in Mexico continues its effort to get closer to MSMEs, through its event called Microsoft Business Days (Microsoft Business Days), with the objective of collecting the needs of local companies and offering them solutions that can solve their existing problems using cutting-edge technology.
|
Business |
Solutions |
| Microsoft | Outlook, Excel, Word, CRM |
| IBM | PC's, databases |
| SAP | ERP, CRM |
| Oracle | ERP, databases |
| JDEdwards | ERP |
| Sun Microsystems | Web |
Table 3. IT companies.
The MSMEs should ask themselves the following question: Is the investment in SSD only an expense? The answer is given by the main consulting houses in Mexico. They do this by addressing the benefits and partnerships that business and vision of the future dictate. Companies should consider that those who have control over the information they handle in their companies can support strategic initiatives in a timely manner, make their budget activities add value to the productivity of the company, in short, they have a greater advantage over the competing companies (Bañuelos, 2001).
Conclusions
Until a few years ago, computer systems supported transaction processing activities, however today computer systems support obtaining strategic information to fulfill the most important administrative work of any company regardless of its size: decision-making.
Companies (large and small) can no longer be managed with the same tools that they did before and increasingly require timely information that allows them to make the appropriate decisions to control their operation aimed at meeting their objectives, optimizing resources.
MSMEs in Mexico play a very important role in the country's economy due to the volume of employment they generate, and because they manage to maintain and modernize through the use of IT.
In Mexican MSMEs, much remains to be done to achieve a technological infrastructure comparable with other countries, it is a question that the entities involved in their development (MSMEs - Government - IT companies) decide to make the change, since the SMEs that do not incorporate the use of IT and SSD as part of their business put their permanence in the market at risk.
Given that MSMEs are companies with a lot of growth potential, they may encounter difficulties when wanting to implement SSD, however this does not mean that it is impossible, but it does require a change of culture in all the agents of the environment where they are developed so that can make better decisions to achieve competitive advantages.
Finally, we can say that MSMEs as well as large companies require SSD as part of the strategy to achieve their goals, and fortunately today it is possible that they can acquire this type of system.
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