South Africa’s small and medium enterprises (SMEs) are facing some of the most challenging economic conditions in recent history. As they strive to recover from the pandemic, they must grapple with daily load shedding, high-interest rates, low consumer confidence, and a volatile exchange rate.
Yet these challenging times also present an opportunity for the most agile and innovative businesses to grow. We are witnessing many SME owners doubling down on technology investments, especially after ICT solutions helped them survive the COVID-19 lockdowns of 2020 and 2021.
The South African SME Tech Index 2023 research, conducted by World Wide Worx on behalf of Nashua, confirms that 45% of the surveyed SMEs increased tech spending in the last 12 months, and 38% plan to increase spending in the next 12 months.
Today’s digital and cloud-based technologies are leveling the playing field for SMEs, making IT more affordable and enabling them to compete more effectively with larger companies. The small size of SMEs can be an advantage, allowing them to deploy and operationalize new technologies quickly.
Global research from Microsoft paints a picture of how SMEs worldwide are benefiting from their technology investments. The survey shows that early technology adopters are twice as likely to achieve high revenue growth than others and four times more likely to have high confidence in their business.
The benefits of technology for SMEs include increasing operational efficiency and improving sales, marketing, and customer retention. South African SMEs in the survey were the most likely (48% of them) to believe that technology can help improve their competitive positioning.
Here are some ways SMEs can strengthen their businesses through the prudent use of technology:
1. Go paperless: Going paperless can help you save a lot of time and money. Digitizing paper documents means that you no longer need to physically store them. You can store digitized documents on cloud platforms for easy access, collaboration, and data backup.
2. Become more efficient: Technology can enable your business to automate processes, such as capturing customer information, managing inventory, processing payroll, and submitting tax returns. Automated processes are faster, more accurate, and more efficient than manual work. This allows you and your team to focus on strategy, sales, customer service, and other areas of competitive advantage, rather than routine tasks.
3. Sharpen the customer experience: Whether you operate in a business-to-business or business-to-consumer environment, customers have higher expectations. They expect personalized care, seamless communication, and fast service. Customer relationship management (CRM) software enables you to personalize communications and offerings.
4. Go digital: Digital marketing strategies, such as social media advertising, search engine optimization (SEO), and content marketing, let you engage with customers in new ways. E-commerce offers digital customers a convenient 24/7 way to buy from and interact with you. Online payment solutions can enhance the customer journey. AI-driven chatbots can provide round-the-clock customer support.
5. Embrace new ways of working: Following the pandemic, many SMEs adopted remote and hybrid working models. This trend continues as companies seek to offer more flexibility, save money on office space, and digitalize business processes beyond the office. This enables businesses of all sizes to do more with fewer resources and do it faster while delivering better customer service and becoming more flexible.
6. Make better decisions: Digitalizing your business processes gives you access to a wealth of data in systems such as accounting, CRM, e-commerce, and inventory management systems. Advanced analytics and reporting tools allow you to tap into this data to gain valuable insights into customer behavior, market trends, and business performance, empowering you to make informed decisions and drive strategic initiatives.
7. Improve resilience: SMEs face various risks today, from frequent power outages to crime and data breaches. Cloud-based solutions, mobile connectivity, and backup power solutions are all crucial for ensuring business continuity. This is a significant area of investment for South African SMEs.
By Barry Venter, CEO of Total Workspace Solutions provider, Nashua