Why tech holds huge potential for Kenyan SMEs in digital era

Catherine Wanjiku a member of Kenya National Chamber of Commerce and Industry (KNCCI) arranges some of the African wear attire on display during the second day of the 4th Edition of the SMEs Conference and Expo held at the KICC grounds on March 16, 2023. PHOTO | FRANCIS NDERITU | NMG

At a recent meeting, which brought together MSMEs in Nairobi, participants agreed that tech has the potential to transform the sector. This not only provides value to many entrepreneurs, but also creates significant worth to customers, and in some cases, it literally changes their lives.

This is because the country has seen a phenomenal increase in internet penetration and use of mobile phones over the past 10 years. A report released by the Kenya Communication Authority in March 2023 reveals that the number of mobile subscriptions in the country currently stands at 66.1 million. And more Kenyans are now able to use services such as 4G network, closing the digital gap.

Many MSMEs have been doing their business manually with owners actively involved in these processes. What came out during the meeting was that to grow an MSME, one should adopt a strategy towards digitising their business.

Digitisation involves transferring analogue data or information into a digital format. Ensuring that the physical records, written documents, visual data, and other analogue data types are converted, stored, processed, and transferred by computers and other electronic devices.

The goal of digitisation is to maintain and improve the usability, accessibility, and management of existing information. This, therefore, calls for empowering entrepreneurs and improving data literacy among citizens. It’s crucial to empower employees to make decisions in line with the owner’s vision or utilising data for decision-making.

This will aid the owner to take a step back. In scenarios where the owner’s presence is limited but necessary, a policy which can be used to digitise all processes in an organisation becomes crucial.

When the MSMEs who attended, the event were asked to suggest the top four (4) issues they think of when faced with digitisation and its linkages to business growth they said, “The current business requirements calls for change management; the type technologies that an organisation uses (for example Customer Relationship Management) and a need for integration (getting different technologies to talk to each other).

Digitalisation also promotes innovation, efficiency, and competitiveness, it entails integrating technology into every part of a company. It also helps MSMEs reimagine and reinvent their current processes, products, and services.

One key concept that aligns with the digitalisation principle is the need for business process orientation amongst MSMEs.

MSMEs can only start digitisation if they have established and documented their standard operating procedures. These well-defined processes and systems serve as the foundation that enables small-scale businesses to grow. They provide owners with clarity regarding the day-to-day operations, empowering them to make better decisions.

Additionally, this allows the owner and founders to start thinking strategically as they gradually delegate the supervision of the daily operations.

Edwin Obonyo is a PhD Student of Operations, Logistics and Supply Chain Management in Strathmore University Business School and Raymond Mutura is the Director of Centre for Research on Organisations, Work and Family.