Technology that was once too expensive for small businesses such as business intelligence and cloud-based solutions, is now accessible to most SMEs. Services like these now assist SMEs in transforming, and enables them to stay agile and grow. Consequently, it allows small businesses to continue playing a central role in the national growth of the local economy.
This ability of technology to augment the performance of SMEs is particularly significant within South Africa, where SMEs encompass 91% of formal businesses, employ around 60% of the labour force, and cumulatively contribute approximately 34% of the local GDP according to The Banking Association of South Africa.
New research from World Wide Worx entitled SME Survey 2018: Future-proofing the SME, has revealed that local SMEs are slower to adopt new technologies such as artificial intelligence, machine learning and big data analytics. South African organisation are aware of the productivity and business intelligence benefits that go along with new technologies, illustrated by the fact that the majority (70%) of respondents in the study indicated that they were ready to adopt new technologies.
However, whilst the appetite exists, results show that small businesses prefer to stick with their legacy applications and solutions. In fact, over a quarter of local SMEs (27%) still make use of spreadsheets to capture financial data and do their fiscal reporting. This can be attributed to a lot of reasons but predominately including the familiarity that goes along with using these (no learning curve as with new tech), and the reporting challenges involved with obtaining data from various disparate solutions.
SME-tailored solutions such as Microsoft Dynamics 365 Business Central, allows SMEs to congregate all of their business systems and deliver impactful and actionable insights from within familiar Office tools like Outlook, Word, and Excel.
Additional insights highlighted by the SME Survey 2018 includes some of the most prominent concerns for local SMEs. Chief amongst the internal concerns is cash flow as it was cited by 59% of respondents, followed by finding the right staff (34%) and meeting deadlines (24%).
By employing a solution that connects data across accounting, sales, purchasing, inventory, and customer interactions, SMEs get a holistic view of the business and the ability to chart financial performance in real time. This enables financial closes and reporting to be accelerated, accounts receivables and payables to be streamlined, and allows for the snappier reconciliations of accounts.
Organisations are also able to gain a comprehensive overview of service tasks, workloads, and employee skills, enabling them to effectively assign employee resources.
In terms of threats emanating from the external operating environment for local SMEs, competition ranks as the main concern (46%), while generating sales (13%) also features in the top worries.
Through features such as predictive analytics, SMEs will know what stock to replenish and when, allowing companies to automate and secure their supply chains and optimise inventory. Companies will be able to avoid shortages and lost sales, by automatically offering substitute items, when requested items aren’t available. They can get built-in recommendations on when to pay vendors to take advantage of vendor discounts or avoid overdue penalties. Sales teams can sell smarter through advance analytics features to allow more effective prioritisation of sale leads, based on the revenue potential.
Furthermore, customer service staff can monitor all customer interactions to serve better and enhance the experience, as well as deliver insights to the sales teams, which enables them to up-sell or cross-sell, throughout the sales cycle.
Ultimately, technological and market disruption is making the ability of SMEs to stay agile and deliver a competitive advantage, requirements for their business survival in the digital-first world. Technology empowers small business to do just that, empowers SMEs to achieve more and positions small businesses for success in the digital age.