Chipendo

Integrated Systems Architecture for Small Enterprise Development & Support

• Presentation Based on (Unpublished) Paper Entitled:

Information and Communications Technology Based Interventions: An opportunity for Sustainable Poverty Reduction Through Small Enterprise Development in South Africa;

• Prepared for the Student Summit on Sustainability 2008;

• Authors: Kudakwashe Chipendo and Batsirai Bakare;(University of Fort Hare, South Africa)

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•Introduction;

•Background;

•Problem;

•Intervention;

•Application;

•Conclusion;

Structure of Presentation

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Current Project

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• History of Africa plagued by Colonialism and Apartheid;

• Characterised by Enclave Development (Urban and Racially Biased);

• Impact: Low Level of Human Capital Development (Particularly in Education);

• Social Exclusion targeted at natives (majority), now referred to as previously disadvantaged communities;

• Present day manifestation of this legacy (Poverty at 57%, largely due to un-employability and inability to run or sustain commercial enterprise);

Context

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• Social Structure Complicates Social Policy Intervention;• Should Government focus on longer term sustainable

investments e.g. Education? Or Should the focus be on immediate relief through grants and rations?

• Longer Term investments e.g. through education have generational impact and are sustainable!

• But! Failure to Address the later militates against the former! Chicken and Egg Scenario?

• S.A. Government to address both, the later through Development and Support of Small Enterprise among previously disadvantaged communities;

Public Policy Dilemma

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• Small Enterprises Account for over 80% of firms in Developed World, and circa 40% in Developing World;

• In South Africa, Small Enterprise, referred to as SMME’s to encompass Micro and Survivalist Enterprise contribute 45% to Employment 25% to GDP;

• This is important given an unemployment rate of 25% and 57% poverty;

• SMME’s are thus an alternative & sustainable avenue to redress historic imbalances and stimulate growth.

Importance of Small Enterprise

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• Globally, the Failure Rate of Start ups is high, estimated at 80% within the first five years of operation;

• This, in South Africa is exacerbated by:

o The low levels of education hence a skills shortage manifest through weak strategic and financial management practice and capacity;

o Resource Constraints, due in part to an inappropriate / inadequate institutional framework;

o An uncertain operating environment;

But!!

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• Government Agencies through and with Specialised Consulting Firms currently support SMMEs;

• Big Consulting Companies Expensive;

• Emerging Consulting Companies Hampered by Skills;

• Integrating Business Systems a possible solution;

• Current Integrated Architectures only for large firms;

• Need adaptation to cater for SMME’s;

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Such adaptation would:

• Create a Pioneering service provision platform for SMME’s; and,

• Enable real time monitoring of activity in SMME by supporting Consultants; thus,

• Allowing for timely interventions;

• Ultimately improve performance of SMME’s without new investment in skills, and unhindered by distance, cost and time;

Intervention

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Systems Architecture

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InternetInternet

Consulting Area

SMME SMME

Work Stations

Work Stations

Work Stations

Switch Switch

Switch

Router Router

Double Router and Firewall

Mainframe or Server


In Practice, such linkages would relate to:

• Point of Sale Systems;

• Inventory Management and Control;

• Financial Accounting Systems;

And would allow:

• Synchronisation of purchasing cycles (Bulk Purchasing) and Syndicated branding by industry in long run;

Application

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• Concept applicable to majority of SADC countries and to some extent All Sub Saharan African Countries;

• May be adapted to other developing countries with similar social structure / organisation;

• Concept only applicable to SMME’s with certain threshold of income hence requires input from delegates on alternative technologies, particularly but not limited to low cost technologies that can reduce the cost of such a service and increase penetration;

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• Financial Mail, (2006) “SME’s in South Africa”, South Africa, Financial Mail;

• Human Research Sciences Council (2005) “Poverty in South Africa”, Pretoria. Human Research Sciences Council;

• Torero, M. and J. von Braun (eds.) (2005) “ Information and Communications Technologies for Development and Poverty Reduction – The Potential of Telecommunications” Baltimore: Johns Hopkins University Press.

• Whitford, S. (2007) “Succeeding as an SA SME”, Pretoria, GradXnet;

References

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Thank You!

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