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Overcoming Technological Development Barriers

In the article “The e-business capability of small and medium sized firms in international supply chains,” Johnstone and Wright (2004) present several barriers that deter companies from implementing digital marketing. They include the high cost of installing infrastructure; the high price of technology; large investment requirements and liquidity constraints; uncertain return on investment; limited work expertise caused by a general shortage of highly skilled workers and insufficient training; lack of management vision, support, and enthusiasm in the adoption of internet technology; inability to outsource IT expertise; and bad experiences in the past. In this regard, it is important to critically discuss what companies can do to overcome these difficulties and successfully adopt the digital strategy.

The first three factors are generally related to the high financial burden of digital transformation. For this reason, an alternative option for the companies is outsourcing which needs fewer investments and, thus, is more affordable (Ameti, 2021). For instance, Abele and Schaefer (2016) claim that the Maestro debit card network could successfully outsource back-office functions, which helped to reduce the costs significantly. Additionally, outsourcing also solves the problem of searching for IT expertise. However, Somjai (2017) notes that choosing this strategy may be risky due to confidentiality and security issues. Moreover, Zaidi (2018) claims that understanding that outsourcing companies may struggle to understand organizational structure and work methods, which can lead to a mistake, although this problem usually disappears during a longer-term partnership. Therefore, if wisely managed, outsourcing can be a good way to implement technological innovations.

Nevertheless, not all companies are able to outsource IT companies and, thus, should use other strategies to reduce costs and attract expertise in technology. As for the former, the businesses can turn to cloud storage as it significantly minimizes the costs and increases data availability (Dieye, Zhani, and Elbiaze, 2017). To attract expertise, the companies can, for example, seek a strategic partnership with Universities that would be mutually beneficial for all counteragents (Frolund, Murray, and Riedel). In this case, the Universities would benefit from financing and internship opportunities, whereas the business can enjoy expertise in the IT-sphere that is not very costly. Yet, if the IT expertise is not outsourced, the companies may face the problem of low levels of managers’ involvement and support for change. To address that, the top leadership should initially seek to persuade and inspire the lower-level administrators and only then try to implement improvements.

Reference List

Abele, H., & Schaefer, G. (2016) ‘The cost of cash and debit cards in Austria’, Journal of Financial Market Infrastructures, 4(4), pp. 1-16.

Ameti, F. (2021) How outsourcing can be an effective solution for startups.

Dieye, M., Zhani, M. F., & Elbiaze, H. (2017) ‘On achieving high data availability in heterogeneous cloud storage systems’, 15th IFIP/IEEE Symposium on Integrated Network and Service Management. Atis Grand Hotel, Lisbon, Portugal. Piscataway: IEEE, pp. 326-334.

Frolund, L., Murray, F. & Riedel, M. (2017) Developing successful strategic partnerships with universities.

Johnstone, D. & Wright, L. (2004) ‘The E-Business capability of small and medium sized firms in international supply chains’, Information and E-Business Management, 2, pp. 223-240. doi:10.1007/s10257-004-0038-2

Somjai, S. (2017) ‘Advantages and disadvantages of outsourcing’, The Business and Management Review, 9(1), pp. 157-160.

Zaidi, A. (2018) How to successfully outsource software development.

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Essay4Business. "Overcoming Technological Development Barriers." February 15, 2023.


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