The Impact of Digital Technology on SMEs

RESEARCH PROJECT

TABLE OF CONTENTS
TOPIC:.............................................................................................................................................1
INTRODUCTION...........................................................................................................................1
Research Background.............................................................................................................1
Aims and Objectives...............................................................................................................2
Rationale:................................................................................................................................2
Problem Statement:................................................................................................................3
LITERATURE REVIEW................................................................................................................3
Theme 1 : Recent trends in digital technology that are impacting SMEs..............................3
Theme 2 :Advantages which SMEs derives from the implications of digital technology in
their operations.......................................................................................................................4
Theme 3 : Challenges which the digital technology has imposed on SMEs.........................5
RESEARCH METHODOLOGY.....................................................................................................6
Introduction............................................................................................................................6
Research Methods..................................................................................................................6
Research Approach.................................................................................................................6
Research Design.....................................................................................................................7
Sampling.................................................................................................................................7
Data Collection.......................................................................................................................7
Data Analysis..........................................................................................................................8
DATA ANALYSIS AND INTERPRETATION.............................................................................8
RECOMMENDATION.................................................................................................................16
REFLECTION...............................................................................................................................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................19
Books and Journals...............................................................................................................19
APPENDIX....................................................................................................................................22
Questionnaire........................................................................................................................22

TOPIC:
“The impact of digital technology on business activity of SME’s “
INTRODUCTION
Research Background
The small and medium enterprise (SMEs) sector of United Kingdom is changing very
rapidly. SMEs have been impacted by the evolution of technology very crucially. Digital
technology involves all the electronic devices, systems and other resources that are concerned
with generating, storing and processing of the big data. Popular examples in day to day life are
mobile phones, multimedia, games etc. Seeing a bigger picture, digital technology in the form of
artificial intelligence, management information systems, big data analytics, social media or
digital media marketing are some of the areas of the small and medium business enterprises
which have been greatly contributed by digital technology (How AI and data science tools can
be used by SMEs, 2018).
The implications of the digital technology has created abundant market opportunities for
the business which are small and medium in size in the form of greater access to large number of
people through digital marketing which also reduced the cost of promotions and advertising fir
these enterprises when compared to traditional method of marketing. Innovation has become
possible which has aided these companies in attracting masses and creating a competitive edge
(Significant Impact of Internet and Technology on SMEs, 2017.). However, there are two sides of
a coin, if a thing has an advantage then it will surely have a disadvantage. The same is applicable
on impact of digital technology on SMEs. It has created many challenges for the medium and
small organisations.
The present research project will highlight the recent trends in the digital technology that
has taken the business world by storm, advantages which the SMEs derives from advanced
digital technology and the challenges or problems which this advanced technology has imposed
for the small scale and medium enterprises. Lastly, the project report will include
recommendations regarding strategies for overcoming the problems and challenges while
implicating digital technology in the business. Along with this, reflection part will also be
included.
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Aims and Objectives
Aim : “ To assess the impact of digital technology on the functioning of small scale enterprises”.
A study on SDK Jewellers.
Objectives :
 To determine the recent trends in digital technology that are impacting SMEs
 To identify the advantages which SMEs derives from the implications of digital
technology in their operations
 To ascertain the challenges which the digital technology has imposed on SMEs
 To recommend the strategies for confronting the challenges imposed by digital
technology
Research Questions :
1. What are the recent trends in digital technology that are impacting SMEs ?
2. What are the advantages which SMEs derives from the implications of digital
technology in their operations ?
3. What are the challenges which the digital technology has imposed on SMEs ?
4. What are the strategies for confronting the challenges imposed by digital technology
Rationale:
The reason why the researcher selected this research study on implication of digital
technology on he functioning of small scale enterprises is to form a greater understanding of the
impact of digitalisation in the context of operations of SMEs. Such an understanding will aid the
scholar in its academic studies. Through the study, the researcher will obtain useful insights of
how small and medium scale entities are becoming efficient in their operations by the application
of digital technologies in their businesses. Further, undertaking a research will assist the scholar
in learning how research paper are created, what methodologies are used which could be useful
in answering to the questions or problems of research. This will help scholar in its academic as
well as its professional life.
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Problem Statement:
Coping up with rapidly changing digital technologies for surviving the competitive
environment is a problem for SMEs. Change management and retention of creative and skilled
pool of talent within the organisation are some other problems for SMEs.
LITERATURE REVIEW
Theme 1 : Recent trends in digital technology that are impacting SMEs
According to Foroudi and et.al., (2017), pace of change in the technology evolution is
exceptional. Trends changes very fast and business organisations in the pursuit of building a
competitive edge adopts newest technology. The author has articulated various trends in the
digital technology such as big data analytics, management information systems. Implication of
artificial intelligence in the operations of the business has led to bring more efficiency in their
processes and operations.
However, Mazzarol (2015) has argued with the view of above author and stated that
Customer Relationship Management (CRM) is one of the AI technology which is used by the
SMEs in their operations in which data relating to customers is stored, processed and managed
very efficiently. Big data analysis is one of the trend which is becoming very popular amongst
SMEs through which they are able to extract and analyse bulk data so that they can identify some
pattern relating to the habits, preferences, needs and expectations of the customers. The
information which is derived from big data analytics significantly helps in formulating better
marketing and production strategies through such a product could be created which has the
potential of meeting the demand and expectations of the target consumers.
Molinillo and Japutra (2017), has argued over the claims of above author and said that
increased use of mobile applications is the most emerging trend in digital technology.
Organisations are developing their own mobile apps through which they conduct major business
operations and communicates the information with their customers. This has helped the SMEs in
enhancing their connectivity with their stakeholders.
However, Quinton and et.al., (2018), has stipulated that due to rapid changes in digital
technology, SMEs are finding it difficult to match the same pace. Also, it is not feasible for the
small and medium enterprises to employ technologies in a very short span. This is because of
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such type of companies have limited resources and investing in digital technologies would
consume unnecessary resources of the organisation.
The author Radanliev and et.al., (2019), has argued against the opinion of above author
and has said that increased use of digital technologies in the operations and functioning of SMEs
have resulted into loss of employment of many people. SMEs are characterised by providing
huge employment and this increased implication of digital technologies can prove fatal to the
economy of UK.
Theme 2 :Advantages which SMEs derives from the implications of digital technology in their
operations
In the view of Scuotto and et.al., (2017), digital technologies has rendered many crucial
advantages to the SMEs. Effective communication is one of its major advantage. Use of social
media and other digital channels have impacted way companies used to communicate with their
stakeholders. Internet and social media platforms have facilitated medium companies to connect
and operate on a global level. This in a way has created abundant market and growth
opportunities to the small and medium enterprises.
However, Stankovska, Josimovski and Edwards (2016), has argued that instead of
effective communication, companies' administration efficiency has been improved because of the
implication of advanced technologies such as management information system in which all the
work is done digitally. This facilitates the management in communicating really fast within the
organisation and also speed up the decision making process. Cloud computing is one of the
digital technology which has provided these SMEs with great alternative of filing, storing and
sharing of the data with much more convenience. Big data of the companies are easily stored and
protected through cloud computing.
Another Taiminen and Karjaluoto (2015) has disagreed with the above claims of the two
authors and said that biggest advantage of the digital technologies is its contribution towards the
production area of the SMEs businesses. Innovation in the products and its design is something
which differentiates one company's products from the products of other companies which
eventually becomes the competitive edge of the business and helps it to become more
competitive in the market. Kopanakis, Vassakis and Mastorakis, (2016), disagreed the above
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