As the economic impact of the Covid-19 pandemic hits Africa’s business sector, small and medium enterprises are in a fight for their survival

With slowing economies across the continent, low consumer confidence and now a pandemic, SMEs are increasingly in search of tools that can help them build resilience against the ongoing disruption.

The Regional Director for Central Africa at SAP, Pedro Guerreiro, says some businesses were fortunate enough to have the tools and systems in place to enable remote work. “This minimised the negative impact of the lockdown on their productivity and operations and enabled them to maintain business continuity more easily. However, some SMEs have out-of-date technology, while too many have not invested in technology at all. This leaves SMEs stranded and lacking the capacity to adapt to a very disruptive environment.”

According to the World Bank, SMEs account for about 90% of all businesses and more than half of all employment worldwide. However, African SMEs face perennial funding challenges, with the IFC estimating that Covid-19 will widen a funding gap that already sits at $1.5-trillion.

Cloud holds key to productivity

Guerreiro adds that SMEs that had adopted cloud services prior to the country lockdowns would have been in a better position to maintain business productivity and keep operations running. “If you are stuck with outdated on-premise technology, however, the lockdown restrictions would have been devastating to your productivity, especially as employees were suddenly working remotely and without physical access to the office.”

In South Africa, for example, which had one of the strictest lockdowns in the world, 70% of the country’s workforce has returned to work, but many companies are persisting with remote work. “There is growing evidence that employees can maintain the same – or even higher – levels of productivity when working remotely as they do when they are at the office. One of the key enablers of this is their use of technology tools such as cloud-based enterprise resource planning solutions that enable them to orchestrate their business productivity regardless of where they are.”

Enterprise tools for SMEs

While ERP solutions were traditionally leveraged by large organisations that had the skills and capital to successfully implement them, technology vendors have made a concerted effort over the past few years to extend these offerings to the SME market. “Nearly 80% of SAP’s customers globally are SMEs,” says the Head of General Business for SAP Africa, Amin Meqdadi. “And with an implementation period of as little as two weeks, the solutions that are available to SMEs can transform how they operate quickly enough for it to matter as they recover from a tough trading period due to Covid-19.”

Meqdadi points to partners and resellers as key enablers of cloud adoption among SMEs. “A strong partner ecosystem can help SMEs navigate some of the trickier aspects of cloud adoption and help build innovations that are tailored to the SME market. The pandemic is also forcing some change in how partners and resellers engage with SMEs.”

Tech resellers are facing a step change in the market. “They have no choice but to expand their portfolio with what the SME market needs. “Since the Covid-19 outbreak, what SMEs need most is the agility, cost-savings and productivity benefits of cloud solutions. While adopting and implementing cloud was generally seen as a nice-to-have or a goal for some time in the future, the very survival of many SMEs now depends on how well they adopt and leverage the many benefits of cloud technologies.”

Meqdadi believes many resellers will need to reconsider their business models with urgency. “SMEs are looking for cost-efficient cloud solutions that can be implemented and deliver business results quickly. The growing adoption of born-in-the-cloud SME solutions such as SAP’s ByDesign and Business One also gives resellers access to a broader market, as these tools can be used by smaller businesses as well as more established enterprises.”

New breed of partner

The Head of Channel for Africa at SAP, Lillian Serobatse, says the ongoing disruption has changed companies’ expectations of their technology partners. “The new currency is lifetime value, in other words, how can my partner provide ongoing value to my organisation and help me make decisions over my technology that support the achievement of my business goals. It’s not enough to just sell a product or solution: channel partners are now tasked with helping customers extract the maximum amount of value over time from their technology investments.”

Serobatse adds that these changing expectations have given rise to a new breed of partner organisation. “The best value-added resellers and tech partners today develop extensive industry-specific expertise, take the time to really understand customer pain points and opportunities, and then co-develop tailored solutions alongside the larger vendors. This gives them access to very specific markets where their solutions can make an immediate and long-term positive impact.”

Meqdadi believes the tools that SMEs need are already available to value-added resellers. “Many of these solutions arguably provide a panacea to the current challenges resellers and their customers face. Lightweight, native cloud applications such as SAP ByDesign answer a customers’ urgent need to support a remote workforce without compromising compliance. Technology partners who don’t have an effective answer to the SME market need to act speedily. Their survival, and the survival of many SMEs, depend on it.”