A Study on Benefits Derived by SMEs from Online Presence

Abstract

This descriptive research has attempted to assess the benefits gained by Small and Micro Enterprises (SMEs) by digitalizing their business with online presence by collecting data from 406 SMEs located in the metropolitan city of Chennai, selected using Convenience Sampling technique. Results of the study reveal that the SMEs surveyed have derived good degree of benefits in terms of bettering customer relations management, gaining good image at national level, enhanceing efficiency of sales personnel, Lowering cost, providing 24-hour accessibility to customers, achieving better customer satisfaction and providing better customer service while they have derived average benefits in terms of market expansion, bettering turnover and enhanced return on capital employed. Enhanced turnover, return on capital employed, 24-hour accessibility and providing better customer service are casting significant impact on satisfaction derived by the SMEs from their online presence. Turnover and Return on Capital Employed are important determinants of satisfaction of SMEs towards online presence. 202 SMEs have derived better benefits from their online presence while 140 have derived modest benefit. Larger number of SMEs run by first generation entrepreneurs have been well benefitted by their online presence while those SMEs run by entrepreneurs who have some entrepreneurship backing are benefitted only to modest extent and not to large extent. Probably, SMEs run by fresh entrepreneurs have strong vigour towards utilisation of technology for their business which might be missing among traditionally bound entrepreneurs. SMEs run by middle aged and highly educated entrepreneurs, SMEs with a formal online presence investment methodology, those engaged in business for 5-10 years, those operating with high volume of investment in excess of 10 lakhs, those engaged in service business, those which have been in online business for 2-5 years, those operating with 3-5 IT staff, those which have used self funds for digitalising their business and those managing higher monthly turnover in excess of Rs. 100,000 have been well benefitted from their online presence while SMEs engaged in manufacturing, those in business for 2-5 years, those operating with an investment of 1-5 lakhs, those with less than 3 IT staff, those operating with staff strength of less than 20, those in online business for more than 5 years, those which have used purely borrowed funds for digitalising their business and those operating with monthly turnover of less than Rs. 50,000 have been reasonably Benefited. SMEs engaged in contractural jobs, those in business for a longer period of more than 10 years, those in online business for a shorter period of less than 2 years, those operating with staff strength in excess of 50 and IT staff in excess of 5, those which have used both self and borrowed funds and those operating with investment of less than Rs. 100,000 have been slightly Benefitted  by their online presence.