As African SMEs feel the pinch of constrained growth following two years of disruption due to the pandemic, business owners are increasingly seeking the benefits of cloud technology to unlock greater efficiency and drive growth.
According to Jade Michael, Head of SAP Business One & SAP ByDesign for Africa, small and medium enterprises are leveraging cloud technologies to solve immediate problems within their business and unlock new opportunities.
“The cloud enables African SMEs to gain greater business agility, improve their control and insight over business processes, and support business growth,” says Michael. “Critically, cloud adoption is an operational expense, not a capital one, meaning SMEs can adopt cloud technologies more quickly and without the heavy upfront capital outlay of on-premise solutions.”
SMEs vital to employment, economy
SMEs provide as much as 80% of jobs in Africa and play a vital role in driving economic growth in their industries. In Kenya, data shows SMEs accounted for 98% of all businesses and 30% of job creation in 2017 alone, and contributed 34% of the country’s GDP in 2016.
However, the impact of the pandemic has left many SMEs operating under constrained conditions, with many business owners seeking out new technologies to help unlock growth opportunities and improve internal efficiencies.
“While the cloud holds immense opportunity for nearly every SME, business owners need to be wary of adopting tech that is not fit for purpose, or lacks the extensive support of more mature solutions,” explains Michael. “SMEs need to ensure their cloud adoption is guided by a well thought-out business strategy and supported by knowledgeable and experienced implementation partners to truly unlock the benefits of cloud in their business.”
African SMEs adopt cloud ‘like never before’
SAP was historically seen as mostly an enterprise player, but has shifted in recent years to better support SMEs, which account for the vast majority of the world’s businesses. Today, more than 80% of the company’s clients are SMEs, with several tailored solutions built for smaller companies, including SAP Business One and ByDesign.
“More African SMEs are journeying to the cloud than ever before to take advantage of the cost-saving and efficiency-boosting benefits of cloud,” says Michael. “However, not everyone has a smooth journey to the cloud. To ensure they unlock the full benefits of cloud adoption, business owners need to bear a few key points in mind when planning their transition.”
Drawing on lessons learned from working with SMEs across sub-Saharan Africa, Michael offers four tips to help business owners make a successful journey to the cloud:
Step 1: Be clear about the problems you want to solve
“The first and most important step is to understand what problems you want to solve within your business, for example by identifying under-performing areas of the business, and to then choose appropriate technologies for those problems,” explains Michael.
For automotive firm Rajinder Motors in Tanzania, a previous on-premise system was proving a hassle, leaving the business with inaccurate inventory control and a lack of integration in production processes. Following a cloud deployment, Rajinder Motors now has access to real-time data, and improved business management, efficiency and customer service.
The company’s customer numbers have doubled since the implementation.
According to owner Manmohan Bhamra, “SAP Business One is the complete business solution, and helped us move from on-premises to the cloud, which has been beneficial to our business expansion.”
Step 2: Determine the ideal state
“Once you are clear on the problems you want to solve, it’s important to set clearly-defined goals and objectives for the ideal state for your business that you seek to attain through the cloud implementation,” explains Michael. “Understanding upfront what you are striving for further lends focus to the implementation and helps keep the project grounded in real-world business objectives.”
Kenyan consumer products company Maisha Flour Mills was previously dependent on basic accounting software that relied on manual processes, leaving decision-makers with low visibility over the business.
Since adopting the cloud, Maisha Flour Mills has gained end-to-end visibility, improved business management, and eased collaboration between departments.
Critically, the cloud has enabled the management team to check on the business at any time and from anywhere, leading managing director Kamaldeep Singh Pull to comment: “Efficiency, visibility and data-driven decision-making is made easy with SAP Business One.”
Step 3: Don’t walk the journey alone
One of the constraints under which many SMEs operate is a lack of internal capacity to drive complex technology implementations. Michael advises that business owners seek the support of expert partners that can lend skills, expertise and learnings to their cloud implementations.
“Having access to experienced partners can also equip business owners with greater insight into specific challenges or opportunities that the partner has encountered, helping avoid costly mistakes and more quickly realising business value from the investment.”
Tanzanian construction firm DIY Limited sought the support of a local SAP partner to implement a system that could offer payroll support and real-time data insights. According to head of IT Giridhari Jha: “There is no better partner in Dar es Salaam other than DoubleClick. They have provided us with a user-friendly system that cannot compare to any we’ve used before.”
Since the implementation, DIY Limited has gained full visibility over operations, with management enjoying complete understanding of business processes and customisable reports enabling faster decision-making.
Step 4: Measure impact
Michael cautions that some SMEs fall into the trap of sitting back and letting the system do all the work following a new implementation project.
“Technology is only a tool, one that should be sharpened and refined constantly in order to gain the full benefits on offer. This makes measurement essential: by continuously tracking the performance of various business processes supported by the technology, SMEs can ensure they use their new tools optimally and to the full benefit of the business.”
For the CSI Energy Group in Mauritius, a lack of any form of previous enterprise resource planning (ERP) tool left the business with time-consuming and error-prone operations that lacked efficiency.
Since deploying SAP Business One, the business has gained access to improved financial control and business management capabilities, improved decision-making through customisable reports, and faster and more efficient processes across all departments.
Accurate stock control and remote work enablement supported by stable and reliable cloud storage has unlocked further business benefits, prompting CSI Energy’s group IT manager to comment: “SAP Business One allows us to make better management decisions in faster time. We would not be able to work at the rate we are working now if it wasn’t for SAP Business One.”