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In the bustling heart of Accra, Auntie Hannah – owner of a small but thriving textile business – represents a new wave of entrepreneurship in Ghana, one that is increasingly digital and interconnected.
In a small workshop decked out in vibrant fabrics, Mr Boye, a 40-year-old entrepreneur, is a testament to how technology is revolutionizing small and medium enterprises (SMEs) in Ghana. Just two years ago, Mr Boye’s business was struggling to keep up with bigger rivals. Today, thanks to a cost-sharing technology initiative, his story reflects a growing trend among Ghanaian SMEs – embracing technology to improve business operations, profitability and sustainability.
The rise of technology in Ghana’s media
Across Ghana, SMEs like Mr Boye are increasingly turning to technology to boost efficiency and expand market reach. From cloud-based accounting software to e-commerce platforms, digital transformation is evident. “Technology has leveled the playing field,” says Mr Boye. We can now compete with the big players.
However, the journey was not easy. The high cost of technology remains a major barrier for many SMEs. This is where innovative cost-sharing models have come into play, offering a lifeline to businesses that want to digitize but are wary of the investment.
Breaking down barriers: Cost-sharing models
Cost-sharing, a concept where SMEs and technology vendors share the investment and benefits of new technology, is gaining ground. In Mr. Boye’s case, the vendor provided the initial setup at a reduced cost, with the agreement that they would receive a small percentage of online sales. “It was a win-win. We got the technology we needed without the prohibitive upfront cost,” explains Mr. Boye.
This model not only minimizes financial risks for SMEs, but also incentivizes technology providers to provide ongoing support and ensure that the technology delivers.
Transformative stories from the field
Mr. Boye’s success is not an isolated case. Freda Kabuki, who runs a local organic food delivery service in Pokuase, has seen her business triple since adopting a mobile payment system through a similar cost-sharing arrangement. “Our customers love convenience. and for us, the process is seamless,” shares Freda Kabuki.
These stories highlight a critical trend – technology, when accessible, can be a powerful tool for business growth and sustainability.
Looking Ahead: Challenges and Opportunities
While the future looks promising, challenges remain. Limited digital literacy and infrastructure issues are barriers that still need to be addressed. However, the potential for technology to transform SMEs in Ghana is enormous.
As more businesses like Mr Boye and Freda Kabuki embrace digital tools and innovative cost-sharing models, Ghana’s media landscape is poised for a remarkable transformation – one that is more inclusive, competitive and sustainable.
“We’re not just adopting technology. we are embracing a new way of doing business,” concludes Mr. Boye, his eyes reflecting the bright patterns of his textiles and, perhaps, the vibrant future of Ghanaian media.
Cost sharing strategies
Small and medium-sized enterprises (SMEs) and technology companies can consider various cost-sharing strategies for collective gain. Here are some approaches:
- Shared resources and infrastructure: Partner companies may share physical resources such as office space, manufacturing facilities or server infrastructure. This reduces overhead for each company.
- R&D Joint Ventures: Technology companies often invest heavily in research and development. By setting up joint ventures, SMEs can share the costs and risks associated with R&D, while benefiting from shared knowledge and expertise.
- Pooling talent and expertise: SMEs can form alliances to pool their talent and expertise. This approach allows companies to take on projects or services that they could not manage individually, leading to cost savings and increased revenue opportunities.
- Collective purchasing and negotiation: SMEs can band together to buy raw materials or software licenses in bulk, benefiting from economies of scale. Collective bargaining can also lead to better terms and lower prices from suppliers.
- Co-development of products and services: Companies can work together to jointly develop products or services. This spreads development costs and risks across participating companies and can lead to innovative solutions.
- Shared marketing and sales channels: By sharing marketing and sales channels, SMEs and technology companies can reach a wider audience while reducing individual marketing costs. This includes joint advertising campaigns, joint trade show stands and co-branded products.
- Technology sharing and licensing: Instead of each company developing its own technology, it can license or share existing technologies. This approach reduces costs associated with development, maintenance and upgrades.
- Risk sharing in investments: Collaborative investments in new ventures or markets allow companies to share financial risk. This is particularly beneficial in uncertain or highly competitive markets.
- Data sharing for improved analytics: Sharing non-sensitive data can help companies gain better market insights and improve operational efficiency through advanced analytics.
- Collaborative training and development: Pooling resources for employee training can be cost-effective. It also promotes a culture of learning and innovation.
By adopting these strategies, media operators like Auntie Hannah, Mr. Boye and Freda Kabuki and modern technology companies can leverage their collective strengths, reduce costs and achieve shared success.
Disclaimer: All quotes, excerpts and quotes are duly acknowledged.
About the Author
The author is an ICT solutions specialist and Managing Director of Electronic Merchant Services Ltd. which provides digital transformation solutions to financial institutions in Ghana and Africa.
E-MAIL: [email protected]