Email and business comptetitiveness

SME Research

The commonly held perception that e-mail is one of the killer applications of business on the Internet has been confirmed by the final results of SME Survey 2005. However, this does depend on why the business needs e-mail, with some sectors having experienced dramatically positive impact, while others are lukewarm.In fact, as many as 69% of small or medium sized businesses across all industry sectors in South Africa regard the impact of e-mail on competitiveness as positive, while only 18% say it has a negative effect and 13% are neutral.

In the largest survey of its kind ever conducted in South Africa, 6 059 decision makers in small, medium and micro enterprises were interviewed about the factors behind their competitiveness. The study, backed by Standard Bank, MWEB Business and Microsoft, also evaluated the entrepreneurial environment in South Africa.

Arthur Goldstuck, principal analyst for the survey, says the uneven results across different sectors come as something of a surprise. “To those proficient with technology, it appears odd that e-mail is not universally perceived as a boon to business. However, there is a definite gap between the technology literate and those who don’t see a natural place for Information Technology in their businesses. This has a profound impact on perceptions of the effect of e-mail on business,” he says.

“From a banking perspective these findings come as a surprise.” says Roy Ross, Director Business Banking of Standard Bank. “South African business have embraced online banking; it is used almost as much as e-mail. Businesses do perceive online banking as having a positive impact on their competitiveness. 82% of those who use electronic banking regard themselves as competitive, against 70% of those who don’t use electronic banking.”

This reveals that the perceived benefit of e-mail on SME competitiveness depends on what it is used for. Sectors in which technology is well entrenched demonstrate the highest positive rating for e-mail. Unsurprisingly, the IT software and services sector rates e-mail as 89% positive, with advertising and marketing at 88% positive. Hotels and accommodation and legal services are close behind with 84%, while financial services rated e-mail 82% positive.

“These appear to be sectors where communication and document sharing are critical elements of business processes and strategy. If only these sectors were considered, e-mail would be the most highly rated of all IT applications,” says Goldstuck.

However, users in sectors such as Retail (49% positive), Personal Services (50%), and Utilities (57%) appear to get far less benefit. Goldstuck points out that is probably because they do not yet understand how to use e-mail as a tool for productivity on the one hand, and have not yet harnessed tools for handling the negative aspects of e-mail, like spam and viruses, on the other hand.

Bradley Hopkinson Small, Mid-market Solutions and Partner Director at Microsoft South Africa, says that some SMEs may be sceptical about the value technology is able to provide to their businesses. “This requires that those servicing these sectors change their approach to providing solutions from a technology focus to a business tool-focus.” He adds that Microsoft and its partners are investing strongly in making business solutions more accessible to the SMEs.

Andre Joubert, GM at MWEB Business, says that as an Internet service provider, it is focused on making e-mail more appealing and less intimidating. “We’re working to remove complexity for the SME – as well as remove the negative effects, such as spam and viruses, before they can have a harmful effect,” he says.

SME Survey is hosting a road show of seminars titled: “Small Company Big Voice – unlock the power of the entrepreneur”, on 6/ 7/ 8 September in Johannesburg, Durban and Cape Town respectively. The seminars will cover the findings of SME 2005 and other business activities critical to the success of SMEs in SA.

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