The Relevance of Information Technology in Managing Small and Medium Scale Enterprises

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A PROPOSAL ON THE RELEVANCE OF INFORMATION TECHNOLOGY IN MANAGING SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA. BY: AMULUDUN OLUWABUSAYO R. 090201049 CHAPTER ONE INTRODUCTION 1.0 BACKGROUND OF STUDY Globalization of the economy has led to the emergence of information technology, especially the growth of the Internet and other communication network. Growing diversity of business transactions and increased competition, companies are changing the way they communicate with new processes that sharpen business performance. The Internet is becoming the foundation for new business models, process and new ways of knowledge distribution (Laudon and Laudon, 2000). Information technology (IT), as defined by…show more content…
IT has helped firms improve their internal operations (Amudo and Inanga, 2009), thereby reducing internal costs and accelerating product development. Lower internal costs make profits possible even at lower selling prices. The sooner a product is on the market, the sooner it can generate profits. Quicker time to market is especially important for technology products in which prices drop rapidly as soon as many similar products become available. IT also supports sales and marketing processes in many ways. It provides salespeople better information about prospective customers; it helps salespeople identify and demonstrate the right product choices; it helps companies calculate individual prices based on the needs and resources of specific customers. IT applications also make the actual purchase transactions simpler and faster. The role of IT does not end once the customer has purchased the product. IT can support customer service activities by keeping track of both general information about each customer and information related to specific customer interactions, such as repairs or warranty claims. SMEs are a very heterogeneous group of businesses usually operating in the service, trade, agri-business, and manufacturing sectors. They include a wide variety of firms such as village handicraft makers, small machine shops, and computer

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