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SMEs grappling with digital complexities

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 09 Sept 2016
Maximising on digital solutions can enable SMEs to grow quicker than some larger organisations, says SAP's Morteza Safai.
Maximising on digital solutions can enable SMEs to grow quicker than some larger organisations, says SAP's Morteza Safai.

South African SMEs with 1 to 1 000 employees will spend an estimated 75 million euros on software licences and 37 million euros on cloud subscriptions in 2016. The annual growth rate is estimated to be 10% for software licences and 30% for cloud subscriptions.

This was according to Morteza Safai, channel head of SAP Africa, speaking at the SAP SME Business Breakfast Briefing in Johannesburg yesterday.

Safai explained there are around 10 000 SMEs in SA, most of which have the potential to grow quicker and more aggressively than some larger organisations, through maximising on the wide variety of available digital solutions to run their business processes and propel their marketing strategy.

However, he added, most of them are experiencing difficulties in fully transforming digitally.

"The main challenges facing SMEs in fully embracing digital adoption are the complexities accompanied by running disparate multi-systems such as CRM, HR systems, bookkeeping systems and social networking platforms concurrently. While smaller organisations may not have the same financial ability to run these systems as big organisations do, the lack of skills set remains a major hindrance. The only way to overcome their challenges is through cloud adoption," he explained.

Rich Phillips, head of Partner management for SAP EMEA, said the biggest change driving digital transformation within the SME sector is how they choose to communicate with their customers using the omnichannel.

"The purpose of marketing is how you persuade your customer as an organisation, but this trend is changing as organisations maximise on their social selling strategies, using various digital channels. Social platforms are playing a major role in selling SME brands to reach out to consumers and getting them to make subconscious decisions.

"South African SMEs need to wake up to the realisation that they have a better advantage to maximise digital platforms over big organisations because they don't have to deal with legacy issues of infrastructure that is decades old. This means SMEs can run their processes speedily and more agile," he pointed out.

Digital solutions, asserted Phillips, can assist SMEs in increasing production, driving down costs while increasing revenue, and running their processes speedily. SMEs can only reap these rewards if they fully understand the role and capabilities of digital solutions.

"Digital solutions create real-time enterprise for customers to engage with organisations around the clock, forcing them to provide services and information at a snap of a finger. This creates an opportunity for them to gauge their customers' perceptions and gain insight on the sentiments around their brand. This also means digital adaptation of SMEs not only creates competition among suppliers, but also between SMEs and larger organisations," he elaborated.

A few years ago, the Western European market was behind the North American market in cloud adoption because the software vendors decided to launch their local products in the US to prepare the markets locally.

"Vendors that don't focus on launching their software in SA are making a big mistake as the opportunities here are infinite," concluded Phillips.

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