SAP Africa has signalled its intention to roll out disruptive technology to the SME market and, by the end of the year, expects to announce developments in terms of partnerships and leveraging its growth agenda (built from the ground up) to seriously engage lower-tier markets and meet an increasing need for technology.
This was one of the key talking points to emerge from a presentation of the results of an SAP-sponsored global SME survey, conducted in conjunction with Oxford Economics, initiated to better understand how SMEs around the world are using technology to boost innovation, strengthen customer relationships, improve agility, and expand their business.SAP has been quick to remind the market that it is not a new player in this space – worldwide 79% of the global company’s customers are small-and mid-sized businesses. Executives have stressed that the SME strategy going forward will incorporate the customer of the SME, which could be the consumer. “The consumer will consume SAP applications, which will tie the company, the enterprise and the consumer together,” said Derek Kudsee, COO, SAP Africa.
Referring to the global study, SAP Africa’s Head of Ecosystem and Channels Desmond Nair mentioned that nearly one-third of South African SMEs (small and midsize enterprises) will generate 21%–40% of their revenue globally within the next three years, compared with 22% today. Over the same period, the number of local companies operating in six or more countries will rise from 16% to 39%.
Nair said the findings reflect a “quiet but powerful transformation” in the SME sector that is fundamentally changing markets for companies of all sizes in South Africa.
“The survey shows that SMEs around the world and across various industries are making major changes to their business models, products and go-to-market strategies. Globalisation, transformation, and technology will be the hallmarks of successful companies, and, with a commitment to enter new markets and willingness to adopt technology innovations, SMEs have never been better positioned to win,” he added.
The findings also overturn some industry stereotypes of smaller companies as local or regional entities that are largely technophobic: 73% of South African SMEs view technology as the heart of their business transformation efforts and, despite economic uncertainty, leading-edge adopters are willing to invest in solutions that help them improve operations and become more efficient to gain a competitive edge in the larger world arena.
Other areas of focus are the expansion of product and service offerings, which was mentioned by 62% of South African SMEs, as well as strengthening customer relationships (59%).
The study also identified major issues affecting South African SMEs. This list is led by a concern of 68% about increased competition from foreign firms, followed by shifting customer expectations and demand (37%), as well as increasing labor costs and greater supply chain flexibility—each cited by 30% of South African SMEs.
Edward Cone, managing editor at Oxford Economics commented that looking at the survey from a BRICS point of view is an interesting exercise, as growth rates for new business startups in these five countries are much faster than in other countries.
“SMEs in the BRICS nations are just as affected by increasing globalisation, fierce competition, more empowered customers in new markets, and fast-changing technologies. They are transforming themselves to compete in the global market, and leveraging technology is clearly the prerequisite to help them do this,” he says. “Almost 70% agree that technology helps them achieve longevity and sustainable growth, with that percentage rising to 77% in Brazil and India.”
Chris Tredger – Online Editor