SME Challenges to Access to Finance

1. SMEs usually have limited financial resources compared to a large company. Often it is hard to finance the standard model for software process improvement (SPI) activities. They try to avoid excessive overhead for the full custom standard process implementation. 2. The proven best practices for the large companies might be too expensive or time consuming to perform in SMEs because of their limited resources and business model. 3. The majority of small companies are independently financed.

That causes a tight financial situation for many small businesses. So they can’t always afford to buy required expertise that possesses the skills required in a particular position. 4. A first step toward process improvement is identifying the strengths and weaknesses of organization software processes. For this, an assessment to examine the processes against a reference model which helps to determine the processes capability to meet the required quality, cost, and schedule goals is required, but small companies have difficulty running those. 5. The small size of a company not only causes for the challenges of networking, marketing and business issues for small software companies. It also creates problems for gaining and leveraging technological know-how. 6. Large companies can improve the work efficiency using all needed toolkits. Small company also need these tools in every step of software process but high licensing costs often put their project cost over expectable levels. 7. SMEs suffer from the lack of literature and publications describing efforts on an improvement initiative.

But adoption of internationally accepted software process practices is essential for the success of all software companies to compete in the global software development market. 8. Many SMEs have multiple business operations like service, product, and consultancy. A given employee may have to change the projects more frequently. This leads to additional challenges to improve the required level of competence for different projects with different technologies. 9. A given employee of SMEs may simultaneously play multiple roles. For that, he may ignore tasks or consider many tasks as low priority. Thus many important tasks may be left undone. In some cases, these tasks may be contradictory or mutually exclusive (e. g. A person is responsible for product cost reduction and improvement of customer service simultaneously). 10. In SMEs the average project duration is shorter than in large companies. Manager faces challenges to reallocate employees more frequently to different projects.