IT application in SMEs: weak at resources and awareness

In the process of global integration, effective utilisation of IT tools not only helps improve corporate governance but also enhances competitiveness and creates new opportunities for applying companies, affirmed Deputy Minister of Information and Communications Nguyen Minh Hong at the seminar titled “Applying IT to enhance competitiveness for SMEs” held recently in Hanoi by the Vietnam Chamber of Commerce and Industry (VCCI).

Slow at applying IT

More than 96 percent of companies in Vietnam are rated small and medium enterprises (SMEs) and this is actually playing a significant role in improving the competitiveness of Vietnam when the country is getting more integrated into the world economy. However, SMEs have characteristic weaknesses in administration and IT application. According to Mr Hoang Van Dung, Vice President of VCCI, the linkage of companies with IT firms is lax and this engenders numerous difficulties for these companies in search of solutions for IT applications to their production and business activities.

According to a report on ICT index in 2010 released by the VCCI, only 46 percent of companies use emails for work and more than 50 percent of respondents said they found no need to use human resource management and payroll software as well as sales management software. In addition, about only 20 percent of companies have websites but they are mainly use for basic introduction of the corporate profile, products and services. Most of them are still cautious with e-commerce because they have little experience with online buying and selling.

Mr Christine Zhenwen Qiang, a senior IT specialist at the World Bank (WB), said IT can help SMEs to do two jobs at the same time: Creating business opportunities and increasing competitiveness against rivals. However, small enterprises in most developing countries are still slow in applying IT.

Mr Le Van Loi, Director of Institute of Information Technology for Business, VCCI, stressed that one of biggest drawbacks of SMEs is weak financial and personnel resources, especially the understanding of business leaders. Sharing this viewpoint, Ms Christine Zhenwen Qiang said IT application was slow because many developing countries still had poor communications infrastructure, outdated equipment and lack of competition. In addition, leaders of SMEs have limited understanding for selecting appropriate technologies and specific benefits of new technologies on production and business activities of their companies.

To improve the reality and encourage SMEs to apply IT, according to Ms Christine Zhenwen Qiang, the most common way is the Government and relevant organizations open workshops and training sources with contents adjusted for specific audience. They should point out benefits from IT application.

High determinations of the Government

Promoting IT application in enterprises, especially SMEs, is a very important task and is clearly stated in the “Turning Vietnam into a strong ICT country soon” project.

Currently, applying IT applications to business activities catches the fancy of companies. Mr Bui Anh Tuan, Deputy Managing Director of Business Registration Department under the Ministry of Planning and Investment, said that the Government is carrying out a business registration reform programme to reform market penetration procedures for companies and unify business registration and tax registration procedures. One of important contents of this programme is to build the National Business Registration System (NBRS), which includes the construction of national business registration portal and national business registration database.

The implementation f this system offers many benefits for businesses: lower costs and shorter time for completing business registration and tax registration procedures; no replication of company names on the national scale; wider access to legal information, and electronic business registration.

In addition to business registration, applying IT to land management and land-use rights certification is also catching the attention of the business community. According to Mr Tran Kiem Dung, Director of the Science – Technology & International Cooperation Committee under the Information Technology Department, the Ministry of Natural Resources and Environment, many provinces and cities have not completed land database; thus, most registration data are in the form of writing, not digital. Several localities have applied IT to cadastral work but the scope is limited to registration information. The updating of land changes has not been properly focused.

To solve this problem, Dung said, with the ODA capital provided by Sweden, the Information Technology Department under the Ministry of Natural Resources and Environment has completed building the ALIS land information and environment system, which enables an integration of land and environmental management in a single system, forms and provides a single access point to land and environment information in provinces and cities.

Remarking on the national IT development strategy, Mr Nguyen Thanh Phuc, Director General of IT Application Department under the Ministry of Information and Communications said the IT application plan applied to State organs is aimed to enhance the competitiveness of SMEs. The plan sets out very specific goals and timelines. For instance, by 2015, all entry and exit passports will be electronically issued to Vietnamese citizens, 30 percent of ID cards will be issued by modern technologies, and 30 percent of driver’s licence applications will be electronically submitted. – VCCI

Tags: IT applications