JOHANNESBURG, South Africa – Small and Medium Enterprises (SMEs) play a critical role in most economies, but in developing countries they are often the driving force for economic growth and job creation. The World Bank estimates that the global economy will require 600 million new jobs over the next 15 years in order to absorb the growing global workforce. Most of this is expected in Asia and sub-Saharan Africa, where SMEs already account for up to 4 out of every 5 new jobs created.
In its Foresight Africa 2017 report, the Brookings Institute highlighted technology uptake as the key driver of SME growth on the African continent. This, says Tracy Bolton, Head of General Business Sales and Partners for SAP Africa, puts digital transformation front and centre on the SME agenda. “Digital transformation enables businesses to become nimbler, scale quicker and more efficiently, and level the playing field with larger, more established competitors. When everything is digitised, business leaders are able to work directly with customers and suppliers while gaining greater control over all aspects of the business.”
In a study commissioned by SAP, IDC found that nearly half of all decision-makers at companies with fewer than 1000 employees believed that technology levels the playing field for small businesses. “Surprisingly, two out of every five SME leaders see the smaller size of their companies as an advantage over larger companies, enabling them to move quicker to take advantage of digital innovation. This creates a direct link to revenue growth: fast-growing SMEs with annual revenue growth of over 10% were significantly more likely to indicate major progress with their digital transformation journeys.”
Bolton says SMEs are seeking solutions that provide scalable business management software that helps SMEs digitise and connect processes. “Digitising ERP, CRM, e-commerce, HR, and analytics simplifies the way an SME is run and enables business leaders to make more accurate decisions in real time and create business value in the moment. Local business leaders have certainly woken up to this: South African businesses report the highest rate worldwide in using data and data sources for real-time reporting, and streamlining business processes and practices.”
While there are some perceptions that digital transformation is the reserve of large enterprises, advances in cloud computing and the prevalence of mobile and fixed-line broadband connectivity has made digital transformation more accessible than ever. “Leveraging digital transformation yields immediate benefits to the SME. By capturing, processing, and analysing data in real time, SME owners gain actionable insights that can be applied to improve business processes. As decision-makers become more skilled at leveraging their digitised processes, they can extract tangible benefits such as improved customer loyalty and employee engagement, or fast-tracked innovation. However, SMEs can’t sit idle and wait for their moment to come: digital transformation should be a business priority driven from the very top.”
Brett Parker, Managing Director of SAP Africa, said SMEs across the continent are already taking major strides to adopt digital transformation at the core of their businesses. “With improvements in operations, profitability, innovation, speed to market, and workforce management, it’s no surprise that more than 200 000 SMEs worldwide have already adopted a digital core powered by SAP. As Africa continues its rise as a global economic power of the future, SMEs will play a central role in powering the continent’s economic engine. Those who choose to leverage digital transformation will inevitably stand the best chance of success, and of potentially becoming the next great African success story.”