Focus on SMEs: Putting more money in tech. Where are the most computerized firms

Romanian SMEs are the least technologically driven among their peers in the European Union, for both financial and awareness reasons. However, things are picking up in this sector and some technology solutions are actually making a difference to the way SMEs are run in Romania, argue IT pundits.

Otilia Haraga

At the moment, only about 22 percent of Romanian companies use management solutions, just 6.5 percent employ social media and only 5.7 percent use cloud solutions in running their business, as shown by The Digital Economy Scoreboard Index 2016. While this data applies to companies of all sizes, in the case of SMEs, the situation is even more dramatic, Valerica Dragomir, executive director of the Employers’ Association of the Software and Services Industry (ANIS) tells BR.

When it comes to investing in technology, companies in Romania are more cautious, argues Haris Zachariades, CEO of SoftOne Romania. “Implementing a business solution requires making an investment and small companies tend to take their time to analyze closely before deciding how to use their budget,” he says.

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Another reason for the low adoption of technology among Romanian SMEs is that awareness of the benefits of implementing business solutions still needs to be raised. SMEs need to be informed about the existence of European framework programs that support technological development and offer consistent financial support in order to invest in software adoption, he comments.

“Trust is another factor. Small companies would rather test before adopting any business solution, which makes the implementation process a little slower,” he says.

Bucharest, Cluj and Timis are among the regions where most computerized companies have chosen to develop their businesses. The less developed are those where the number of companies is still low, like Mehedinți, Botosani or Vaslui, says Zachariades.

However, things are starting to change and SMEs are about to see the advantages that a software solution may bring them.

Bogdan Nitulescu, small & medium business segment lead at Microsoft Romania, tells BR that there is “accelerated improvement in this field today, based on the alignment of the local business landscape to the European and global one.” One reason for this acceleration is the democratization of IT, triggered by the advancement of cloud computing, which is allowing more and more SME managers to support the development of their business through IT adoption.

“There are clear studies on how the implementation of a client relationship management (CRM) tool can boost income, enabling cross-sale or up-sale. Recently a client with a business in the domain of research shared with us that adopting Microsoft’s cloud, specifically Azure machine learning, had facilitated a cost reduction of almost 30 percent and significantly reduced the time for go-to-market. There are so many scenarios, but the positive impact of technology on the bottom line is almost always a certainty,” says Nitulescu.

Over the past three years, SMEs have increased the budgets for solutions delivered via cloud technology by over 30 percent, representatives of Vodafone Romania tell BR.

There has been growth in decision makers’ awareness of the benefits that business applications can bring in controlling, optimizing and growing a company, they comment. Moreover, the “pay as you use” model, which consists of the monthly payment of services without a significant upfront investment, is being applied at a large scale. Additionally, more and more decision makers are convinced of the advantages of data security over the “on-the-premises solutions” of SME customers, say Vodafone representatives.

The innovation-driving technological solutions for SMEs would include social communication applications/platforms, that redefine online commerce, marketing and promotion as well as the ways in which companies  are perceived; mobile communication applications/platforms that redefine the working process, allowing maximum mobility and higher productivity; analytics applications/platforms,  which together with Big Data are redefining business processes, resource organization, product display and customer experience; and last but not least, cloud computing platforms, which give access to modern, up-to-date, scalable and tailored resources (IaaS, PaaS, SaaS), used both for optimization as well as to try new solutions, processes and digital products, comment Vodafone Romania representatives.

“If we are assessing SMEs’ current needs, we can identify several areas: productivity suites (document editing, worksheet, and document management), communication/collaboration solutions (email, IM, VoIP), accounting/invoicing, security and also, from a broader spectrum, mobility with data/voice solutions. Looking to some other European countries, I also see a focus on archiving/storage solutions, an appetite for Sales Force Automation (SFA) and CRM and integration with social media platforms,” Nitulescu tells BR.

According to Zachariades, IT&C, construction and fashion are the main industries that are heavy users of e-commerce platforms. Mobility wise, according to a recent study conducted by Ipsos Mori, 52 percent of SMEs employees use mobile solutions to run their activity. But the most important fact revealed by the same study is that the number of SMEs that want to invest in IT solutions in steadily growing, says Zachariades.

Some of the must-have business solutions for SMEs are Cloud ERP and Cloud CRM solutions, mobile applications, BI solutions, and e-invoice/e-commerce solutions. However, one of the main traits of business software is that it can be tailored according to a company’s needs, says Zachariades.

SaaS and IaaS solutions are becoming increasingly popular choices of SMEs, offering efficiency and flexibility for businesses in rapidly changing markets. Moreover, M2M solutions enable a large variety of applications that a business can adopt to increase the efficiency and quality of the services they provide, Razvan Ionescu, director marketing, segment business, Telekom Romania, tells BR.

“According to IDC, the most popular M2M solutions in Romania are those for fleet management, video surveillance and smart metering and we have started to see a positive trend also for other M2M solutions like building management systems and people counting. We’re seeing similar developments across the subsidiaries of Deutsche Telekom in Europe so I would not say that Romania follows a different trend,” says Ionescu.

What about the results that SMEs can get after the implementation of business software solutions?

According to Zachariades, SMEs who implement business software solutions generally register a 35 percent increase in work productivity, 22 percent reduction in operating costs, 20 percent reduction in administrative costs, 17 percent inventory reductions, 25 percent improvements in complete and on-time delivery and 20 percent improvements in schedule compliance within the first six months of the implementation.

“The use of ERP, CRM and SFA solutions led to a 95 percent time reduction in issues solving in production and services; 75 percent reduction in maintenance costs for systems and production support; 17 percent increase in products and services exports; more than 20 percent savings on sales force time; and a 30 percent reduction in collection times,” Mihalis Bakouris, international business development director at Entersoft, tells BR.

After the implementation of these solutions, there is a timeframe of adjustment for the company and its employees. “Managing change is always a major component in the initial solution deployment. Most people only see the disruption of their working habits and the extra work needed at the start. They have to adapt and this can be done only through change management practices, managerial commitment and focused, structured training which will show to them the benefits of the ‘new way’. But even after deployment, change must be managed. The way we all do business is changing much faster than it used to and any proper IT solution will need to be flexible and expandable to follow this change,” Bakouris remarks.