Research conducted by accounting software firm Xero, in partnership with World Wide Worx (WWW) has revealed that South African small businesses are at risk of being left behind if they don’t adopt new technologies.The study shows that over half (52%) of small businesses admit that they are only just keeping up with technology adoption, while a further 45% acknowledge that they could be doing more.
The research represents the opinions of 400 small business owners and the findings reveal many small businesses are still holding on to old technologies – a large portion (83%) of the businesses questioned are still using Excel spreadsheets, while almost three quarters (73%) are still printing invoices. This demonstrates a distinct lack of awareness concerning the benefits that newer technology can bring.
While small businesses are open to new technologies, the findings demonstrate that poor internet connectivity holds them back. Almost half (41%) of entrepreneurs cited maintaining a stable connection in their workplace as a key challenge.
The research reveals that the portion of small businesses that already use new technologies like the cloud (44%), report significant benefits. Of those that use cloud technology, 70% say the main benefit is time savings – with almost half (48%) stating to have claimed back more than ten hours per week. A further 52% also assert that cloud technology has saved them money.
Speaking of the results, Colin Timmis, South Africa Head of Accounting, Xero comments: “With economic volatility, it’s been an uncertain time for South Africa’s small business community. The entrepreneurs surveyed in our report demonstrate a strong awareness of the new tools available to them, and many are actively working to incorporate them into day-to-day working life. While it’s certainly encouraging that 58% of SMEs included cloud technology it in their business plans for the coming year, failing to adopt the right technologies, risks them being left behind.”
It is significant given that small and medium-sized enterprises (SMEs) currently comprise 91% of businesses in South Africa, and employ 60% of the country’s labour force – contributing 36% of the overall GDP, according to The Banking Association South Africa.
Other key findings from the research reveal:
- 63% of businesses admit that reviewing their existing technology setup is a high or medium priority.
- Excel spreadsheets are predominantly used for accounting (68%), office management (56%), and financial planning (49%).
- Poor or unreliable connectivity is a bugbear for many businesses: 66% indicates severe issues for 1-3 days every month, and 29% struggle for 5-10 days.
- The main consequences of poor internet connectivity are lost time (56%) and frustrated employees (26%).