New breed of partner needed to support SMEs’ recovery

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, Small and Medium Enterprises are increasingly in search of tools that can help them build resilience against the ongoing disruption.

Pedro Guerreiro, Regional Director for Central Africa at SAP, said 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 However, some SMEs have out-of-date technology, while too many have not invested in technology at all.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,” he said.

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

 

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.

He added, “If you are stuck with outdated on-premise technology, however, the lockdown restrictions would have been devastating to your productivity, especially as employees were suddenly working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 per cent 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,” said Guerreiro.

 

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 per cent of SAP’s customers globally are SMEs,” said Amin Meqdadi, Head of General Business for SAP Africa.

“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 adapt 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.”

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