San Jose National High School

San Jose Malilipot, Albay

The Impact Of Technology Adoption On

Business Operations: A Case Study Of Small
And Medium Enterprises In The Retail Industry

Prepared By:
Ma. Chenelyn Bartolata
Everjoyce Bataller
Christian Bilaos
11-ABM

Submitted to:
Mrs. Fe Bertiz
Teacher

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 Table of Contents

 Legal Basis
o The Philippine Innovation Act.
 Local Literature
o 8 Out Of 10 SMEs In Philippines See Digital Technologies Improving
Business Performance And Customer Experience.
o DOST helps C. Luzon MSMEs become more competitive
 Foreign Literature
o The Impact of Technology Adoption on Organizational Productivity.
o Taking advantage of modern technology.

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Page 3 of 19
Legal Basis

The Philippine Innovation Act

Republic Act (RA) No. 11293, otherwise known as the Philippine

Innovation Act, declares the policy of the State to foster innovation as a vital
component of national development and sustainable economic growth. Pursuant to
Section 6 of RA 11293, the creation of the National Innovation Council (NIC)
comprising of 18 national government agencies shall include seven (7) executive
members from the ranks of business, entrepreneur, academe, and the scientific
community, and at least one of whom shall be a woman. There shall be at least one
representative from the Micro, Small, and Medium Enterprises (MSMEs), and at
least one from the academe and scientific community.

The Philippine Innovation Act, also known as Republic Act No. 11293, aims to
establish a national innovation framework that promotes the advancement of
science, technology, and innovation in the country. It recognizes the importance of
innovation in driving economic growth, improving the quality of life of Filipinos, and
addressing societal challenges. The Act outlines several key provisions, including
the creation of the National Innovation Council, which serves as the highest policy-
making body for innovation in the country. It also establishes the Philippine
Innovation Agency, which is responsible for implementing and coordinating
innovation initiatives and programs. Moreover, the Act provides incentives for
innovation activities, including tax breaks, funding support, and intellectual property
rights protection. It also mandates the integration of innovation in the curricula of
educational institutions from primary to tertiary levels.

Overall, the Philippine Innovation Act is a significant milestone in the country’s

efforts to promote innovation and competitiveness. However, its success depends on
the effective implementation and coordination among government agencies, private
sectors, and academic institutions. Additionally, there is a need for continuous
monitoring and evaluation to ensure that the Act’s objectives are met and sustained
in the long run.

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Local Literature

8 Out Of 10 SMEs In Philippines See Digital Technologies Improving Business

Performance And Customer Experience

According to a new survey commissioned by leading printing solutions

provider Epson, more than eight out of 10 (86%) small and medium-sized
enterprises (SMEs) in the Philippines identified digital technology adoption as the
way to improve business processes, especially customer experience. SMEs in the
country shared this belief more than other respondents in the region, second only to
Indonesia. Across the region, over half of respondents (55%) reported being at the
very early stages of digital transformation.

The survey titled, “SMEs striving for Digital Transformation amidst many
hurdles,” captured the perspectives of more than 800 SME decision-makers in the
six largest Association of Southeast Asian Nations (ASEAN) countries by GDP,
including 154 respondents in the Philippines. It captured respondents’ perspectives
on technology adoption, the maturity stage of digital transformation efforts and the
challenges facing these businesses.

“This survey highlights the tremendous interest that SMEs in the Philippines
have in using technology to improve business functions, especially in areas
impacting the customer,” said Eduardo Bonoan, Epson Philippines General Manager
for Marketing. “Although SMEs in the country have generally begun to adopt digital
technologies, more work is needed to help and encourage these companies to
extend digital technologies further beyond customer-facing areas of the business.”

Transformation initiatives focused on the customer

Nearly three quarters (74%) of Filipino respondents have embarked on the

digital transformation journey and have mainly focused these efforts in the marketing
and sales as well as customer interaction and servicing portions of their businesses.

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 In the retail sector specifically, 31 percent of Filipino SMEs in the retail, food
and beverage (F&B) and hospitality sectors have deployed mobile projectors over
interactive models, which can be used in malls and other environments to attract and
deliver a superior customer experience.

SMEs in the Philippines are also moving closer to tracking and making
decisions based on information available in real time. More than half (56%) of
respondents reported being able to do this in the Philippines while another 51
percent noted that their organization can make quick decisions across departments
and business processes on most occasions – outpacing their regional counterparts.

Impediments to technology deployment

Despite this enthusiasm for digital transformation, respondents in the

Philippines across industry sectors agreed that the upfront cost of new tools and
technology, and the perception that replacing old processes and systems would be
too difficult, were barriers to adopting new technologies.

Overall, respondents indicated a preference for products that were more

reliable, performed at a consistently high quality and connected seamlessly with
back-end systems. However, about three out of four Filipino respondents (76%) also
considered the environment when making printer purchases. This consideration was
higher than the regional average of 69 percent.

“In order for digital transformation to reach maturity in the Philippines, SMEs
need greater awareness of the total cost of ownership beyond the initial investment,”
Eduardo Bonoan, Epson Philippines General Manager for Marketing. “With access to
information and industry support, SMEs can overcome the perception that deploying
new technology is beyond them.”

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Environment to play a big part in technology adoption

It is also notable that Filipino SMEs are sensitive to environmental issues.

When choosing a printing solution, over two thirds (76%) consider the impact on the
environment, and 78 percent are mindful of the effect of heat and dust particles on
the health of their staff.

“We are committed to sustainability and showcasing innovations that help

customers reduce their impact on the environment, such as heat-free printing
solutions, and support SMEs with solutions that meet their business and productivity
needs,” Eduardo Bonoan, Epson Philippines General Manager for Marketing.

Fostering digital transformation today requires more than the adoption of new
technologies. It means creating environments where businesses can leverage
innovation to deliver meaningful change that drives positive business outcomes. With
SMEs at the heart of the economy, they need to be empowered with the right tools to
tackle the next steps towards being a sustainable business.”

Epson Philippines is committed to sustainability and supporting SMEs with

solutions that meet their business and productivity needs. Fostering digital
transformation requires more than the adoption of new technologies, and SMEs
need to be empowered with the right tools to tackle the next steps.

SMEs in the Philippines have identified digital technology adoption as the way
to improve business processes, especially customer experience. More work is
needed to encourage them to extend digital technologies beyond customer-facing
areas. Epson Philippines is committed to sustainability and supporting SMEs with
solutions that meet their business and productivity needs to foster digital
transformation and create environments where businesses can leverage innovation
to deliver meaningful change.

According to a new survey commissioned by leading printing solutions

provider Epson, SMEs in the Philippines identified digital technology adoption as the
way to improve business processes and customer experiences. SMEs in the country
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shared this belief more than other respondents in the region. The survey captured
respondents’ perspectives on technology adoption, the maturity stage of digital
transformation efforts, and the challenges facing these businesses. However, more
work is needed to encourage them to extend digital technologies. Therefore, Epson
Philippines aims to sustain and support SMEs with solutions that meet their business
and productivity needs. It fosters digital transformation and creates an environment
where businesses can leverage innovation.

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 DOST helps C. Luzon MSMEs become more competitive

CITY OF SAN FERNANDO, Pampanga – The Department of Science and

Technology (DOST) is continuously assisting micro, small and medium enterprises
(MSMEs) in Central Luzon in enhancing their competitiveness in domestic and global
markets.

Through its Small Enterprise Technology Upgrading Program (SETUP), the

DOST will provide production technologies and system innovations to seven MSMEs
engaged in food processing, agriculture, and metals and engineering that will
improve their productivity and efficiency.

DOST-3 Regional Director Julius Caesar Sicat on Wednesday said the seven
MSMEs that signed up for the SETUP were the Happy Huts Pizza House, Bakeology
Products Manufacturing, Ajee Food Products, Fiona’s Farm, RDJDC Enterprise,
Sarmiento Metal Craft and the Inang Enyang’s Eleven Fourteen Sweet Candies.

As SETUP beneficiaries, Sicat said the seven MSMEs would be able to

acquire production technologies and systems innovations that will upgrade their
businesses.

He particularly cited the case of Fiona’s Farm which operates as a farm resort
and produces tomatoes and other green leafy vegetables through an aeroponics
system that has high electricity consumption.

“The assistance that they will be getting from SETUP is that the Fiona’s Farm
will be able to switch into solar (photovoltaic) technology that will radically cut their
energy cost and make their day-to-day operation more efficient,” the DOST official
said in an interview.

Sicat cited the importance of adopting technologies to address business-

related problems and encouraged the owners of the seven firms to avail of other
DOST-3 services.

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 “The DOST would be very much willing to help them. Our engagement with
each other does not end in SETUP. We also have technical consultancy training,
and the regional science technology laboratory (RSTL) which can help further
elevate the efficiency of their businesses,” he added.

He noted that the DOST-3 has allotted a total of PHP7.4 million as SETUP
iFund for the seven MSMEs.

SETUP iFund is open to manufacturing MSMEs in need of technology to

improve productivity and efficiency and has been operational for a minimum of three
years.

The assistance includes the acquisition of machines and equipment that will
be financed by the program and payable in three years with no interest. (PNA)

The Department of Science and Technology (DOST) is assisting micro, small

and medium enterprises (MSMEs) in Central Luzon in enhancing their
competitiveness. Through its Small Enterprise Technology Upgrading Program
(SETUP), the DOST will provide production technologies and system innovations to
seven MSMEs engaged in food processing, agriculture, metals and engineering. The
seven MSMEs will be able to acquire production technologies and systems
innovations that will upgrade their businesses. The DOST has allotted PHP7.4
million as SETUP iFund for the seven MSMEs. The assistance includes the
acquisition of machines and equipment that will be financed by the program and
payable in three years with no interest.

The Department of Science and Technology (DOST) will provide production

technologies and system innovation to seven MSMEs through its Small Enterprise
Technology Upgrading Program (SETUP). In other words, they are assisting MSMEs
in Central Luzon to enhance their competitiveness in the field of business. The
assistant includes the acquisition of machines and equipment that will be financed by
the program and will be payable in three years without interest
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Foreign Literature

The Impact of Technology Adoption on Organizational Productivity

Technological evolution will continue to accelerate the future in this modern

world of rapid high-technology changes. Organization productivity depends on the
successful incorporation of appropriate technology into the organization.
Technological advancements have completely restructured organization’s by making
their business processes highly effective and smooth-running than ever. Previous
studies have proved that technology use strengthens ICT effect. The adoption of
technology is likely to be slow in the case where technology requires complex new
skills and is expensive to implement and time-consuming (Long, Blok & Coninx,
2016). To face the rush of competition and to remain in existence, organizations
need to change their strategies, processes, structure, and culture (Keong & Dastane,
2019). Choosing the right model of a planned change is of the utmost importance to
ensure that the process of changing takes place without any interruption and the
strategic goals of the changes are met (Igbaria & Tan, 1997).

Many studies examined the impact of Information Technology on

organization’s services and performance (e.g. Beckey, Elliot, & Procket, 1996;
McNutt, & Boland, 1999). Although most of these studies have suggested that IT
plays a vital role in improving the quality and quantity of information, its potential for
adoption and innovation is often uncertain (Mano, 2009). Firms allocate their
resources differently in a way that maximizes their objectives, and those firms that
allocate more resources on IT perform better than those firms that allocate fewer
resources(McAfee & Brynjolfsson, 2008). Appropriate and sufficient IT infrastructure
supported by effective IT management is pre-requisite for achieving high
performance. Information technology plays critical role in several core business
functions as well as operations along with businesses’ products and services. IT and
related aspects attributes to more than 50% of organizations spending lately,
however, effective management of such huge investment results in key factor of
importance for organizations effectiveness and efficiency. It has been observed that
poor alignment of IT with business resulted in failure of desired outcome of IT related
investments in the past. Studies in the developed world have attested that given the
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proper infrastructure, IT can be an enabler for socio-economic development.
Examples given from the developed world where significant IT investments have had
major impacts include increasing the United States gross domestic product (GDP) by
7.8%, the UK by 8.0%, Singapore by 8.3% and Australia by 8.4% (Kamel & Rateb,
2009).

In the Malaysian context, the research has been done on ICT Adoption in
Small and Medium Enterprises (e.g. Haba & Dastane, 2018; Tham, Dastane, Johari
& Ismail, 2019). Besides this, Relationship between information technology
acceptance and organizational agility (Zain, Rose, Abdullah & Masrom, 2005). Also,
Adoption of the internet in Malaysian SMEs”, Journal of Small Business and
Enterprise Development (Alam, 2009). Despite the existence of these studies, very
little attention has been given on how the adoption and incorporation of modern
technology impacts an organization’s productivity suggesting that the impact of
technology adoption on an organization’s productivity has not received adequate
research attention in Malaysia. Thus, there is a significant gap in the relevant
literature, which has to be covered by this research. Nowadays, many businesses
have little understanding about what they are trying to achieve through technologies
they adopt and never get the picture of the expected value. Analyses have shown
that causes of low productivity in an organization are highly measured by the use of
incompetent technologies (Peslak, 2005). Technology changes at a fast pace and if
the employees are working with old tools and methods, they will not be as effective
as they could be (Deal, 2007). Malaysia needs to accelerate the adoption of digital
technology to spur economic growth and bring more benefits, especially as the pace
of digitalization picks up around the world. To face the rush of competition and to
remain in existence, organizations need to change their strategies, processes,
structure, and culture (Keong & Dastane, 2019).

Technology adoption can have a positive impact on organizational

productivity, as it can improve the quality and quantity of information, but its potential
for adoption and innovation is uncertain. Appropriate and sufficient IT infrastructure
and effective IT management are essential for achieving high performance. Malaysia
needs to accelerate the adoption of digital technology to spur economic growth and
bring more benefits, especially as the pace of digitalization picks up.
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 Many studies have examined the impact of information technology on
organizations’ services and performance. It has been observed that poor alignment
of IT with business has resulted in the failure of desired outcomes from IT-related
investments in the past. Studies in the developed world have attested that, given the
proper infrastructure, IT can be an enabler for socio-economic development.
Malaysia has done research on ICT adoption in small and medium enterprises. That
has been given on how the adoption and incorporation of modern technology impact
an organization’s productivity, suggesting that the impact of technology adoption on
an organization’s productivity has not received adequate research attention in
Malaysia. It has a positive impact on organizational productivity as it can improve the
quality and quantity of information, but its potential for adoption and innovation is
uncertain.

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 Taking advantage of modern technology

IN a matter of months, Covid-19 has pushed companies across the world to

speed up their adoption of digital technology by several years.

The small and medium-sized enterprises (SMEs) in Malaysia did the same,
but about 80% of Malaysian SMEs remain undigitised, according to SME Corp chief
executive officer Rizal Nainy.

To boost the digital economy, Rizal said SMEs – the backbone of the country
– along with all other businesses and corporations should use the new norms of the
pandemic as a push factor to go digital for business continuity and sustainability.

“It is imperative for the Malaysian SMEs to embrace the digital economy, not
only to ensure that they are not left behind but also to further spur economic growth.”

Citing a study SME Corp conducted in 2018, he highlighted that SMEs using
social media and eCommerce in business operations saw productivity improvement
of between 26% and 27%.

The online presence of SMEs in the country has doubled from 35.3% in 2019
to 75.8% in 2021, said Rizal, adding that there is much to improve on.

Rizal spoke at the first segment of the Microsoft Malaysia SME Forum:
Leveraging modern technology to drive business growth, along with Lalamove
managing director Jane The, MyEG information technology (IT) director Rushdan
Anuar and moderated by AstroAwani anchor Cynthia Ng.

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Fostering digital change

Under the 12th Malaysia Plan, the digitalization of the SMEs will be undertaken
as an important national agenda to transform the conventional way of doing
business, said Rizal.

“The government has announced eight stimulus packages with an allocation

of RM188.4bil to assist SMEs weather the impact of Covid-19.

“Of that number, RM23bil has been dedicated to drive the digital and
technological transformation agenda.”

He added that SME Corp provides matching grants to businesses for their
digital transformation journey and has also multiple initiatives for SMEs to gain
expert advice on technology adoption and digitalization, digital solutions, and
technical support, among others.

A firm believer that transformation begins from within, Rushdan urged

organization’s to begin their digital transformation journey by constantly updating
their employees on the latest digital trends, technological know-how and capabilities.

He also recommended using “internal champions” within the IT department to

hasten digital adoption.

“Companies and IT departments should take a step back and build a clear
understanding of which systems and applications require the most attention and
prioritize those.

“Use technology as a facilitator. Get internal champions to share best

practices as well as conduct learning and sharing sessions to drive cultural and
digital transformation for the company,” said Rushdan after sharing on MyEG’s rapid
response and action to customers’ new needs.
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 Noting that the shift of consumer behavior towards online platforms is
tremendous and has opened up new markets, The pointed out it is “now or never” for
businesses to go digital.

“Companies can focus on their core portfolio, business as well as serve

customers by making cost effective decisions and scale their business without
incurring additional cost.

“They can do this by taking advantage of digital solutions and platforms that
support a market of different needs, affordability and different sizes of businesses,”
she said after sharing about various initiatives by Lalamove to reduce the barrier of
entry for anyone that would like to start a business.

Digitizing SMEs effectively

Microsoft Malaysia SMB sales manager Tan Shuh Hun urged small and
medium-sized businesses (SMBs) and SMEs to utilize Microsoft’s solutions and
digital platform that are readily available.

“With the right technology, size of a business is no longer a factor to

determine success. It creates a level playing field allowing even the smaller
businesses to grow and thrive successfully.

“Leverage the power of modern technology and softwares to reduce cost,

spur long term business growth, resilience and productivity in a safe and secure
manner,” she said during the forum’s opening remarks.

Meanwhile, the second segment of the SME Forum focused on solutions

which companies can adopt to make digital transformation more productive, secure
and relevant in a post-pandemic landscape.

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 It featured Infront Consulting Group regional managing director Raymond
Chou, Softline Malaysia solution sales for Microsoft Modern Work Hong Zhan Cheng
and Leaderonomics Digital learning and engagement consultant Vivian Po.

Chou said SMEs should create a three-team culture to survive amid and post-
pandemic.

“The ‘survival team’ will focus on managing cash flow, the ‘today team’
manages operations and what to do for customers, while the ‘tomorrow team’ looks
into the next step for the business including embracing, digitizing and strategizing
new business models,” he said. Chou added it is crucial for businesses to seek tech
or cloud partners that can match the businesses’ pace and consult accordingly.

On the importance of data security in the workplace, Hong noted that

challenges organizations face amid digital transformation include a high surge of
cyber-attacks, continuous security vulnerabilities, and lack of skilled cybersecurity
personnel, among others. “Businesses need to rely on a multiple set password for an
additional layer of security, be proactive in identifying and remediating risks, and
conduct cybersecurity evaluation” said Hong when sharing about numerous security
features Microsoft offers to organizations. Po shared about how to build an ever-
ready workforce in 10 minutes, which ties down to an organization’s resilience, agility
and skills.

She said organizations can support employees by engaging effectively and

ensuring their alignment, prioritize empowerment, encourage collaboration, cultivate
the growth mindset, establish a culture of feedback and teach back, among others.

Covid-19 has pushed companies across the world to speed up their adoption
of digital technology, but 80% of Malaysian SMEs remain undigitised. SME Corp
chief executive officer Rizal Nainy believes that SMEs should use the new norms of
the pandemic as a push factor to go digital for business continuity and sustainability.
Microsoft Malaysia SMB sales manager Tan Shuh Hun urged SMBs and SMEs to
utilize Microsoft’s solutions and digital platform to reduce cost, spur long-term
business growth, resilience and productivity. The second segment of the SME Forum
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focused on solutions to make digital transformation more productive, secure and
relevant in a post-pandemic landscape. Chou suggested creating a three-team
culture, seeking tech or cloud partners that can match the businesses’ pace, and
relying on multiple set passwords. Po shared how to build an ever-ready workforce in
10 minutes by engaging effectively and ensuring alignment, prioritizing
empowerment, encouraging collaboration, cultivating the growth mindset, and
teaching back.

As COVID-19 pushed companies across the world to speed up their adoption

of digital technology, Malaysian SMEs remained undigitized. The chief executive
officer of SME Corp. believes that SMEs should use the new norms of the pandemic
as a push factor to go digital for business continuity and sustainability. In addition,
Malaysia’s Microsoft SMB sales manager urged SMBs and SMEs to utilize
Microsoft’s solutions and digital platform to reduce costs and spur long-term
business growth, resilience, and productivity. On the other hand, the other segment
focused on solutions to make digital transformation more productive, secure, and
relevant in a post-pandemic landscape.

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 References

NEDA (2022, October 31)

The Philippine Innovation Act. https://www.ipophil.gov.ph/national-innovation-
council-representative/

EPSON Philippines Corp. (2020, July 29)

8 Out Of 10 SMEs In Philippines See Digital Technologies Improving
Business Performance And Customer Experience
https://blog.epson.com.ph/8-out-of-10-smes-in-philippines-see-digital-
technologies-improving-business-performance-and-customer-experience/

Philippine News Agency (2023, February 1)

DOST helps C. Luzon MSMEs become more competitive h
ttps://www.pna.gov.ph/articles/1194126

Korea Distribution Science Association (2020, April 30)

The Impact of Technology Adoption on Organizational Productivity
http://koreascience.or.kr/article/JAKO202014862060539.page

SME Corporation Malaysia (2022, April 15)

Taking advantage of modern technology
https://www.smecorp.gov.my/index.php/en/resources/2015-12-21-10-55-
2/news/4627-taking-advantage-of-modern-technology

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