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How can SMEs brace for industry disruptions?

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The futureproof small and medium businesses (SMBs) embrace digital transformation, harness technology to streamline operations and adapt to changing market dynamics – focusing on agility and innovation to thrive in an ever-evolving business landscape.

We live in an unsettled world, with South Africa’s SMBs facing multiple uncertainties. High inflation, rising interest rates, the pace of technology change, new customer preferences, load shedding and a rapidly evolving regulatory landscape are just a few of the challenges they face in planning for the future.


The operating environment was already in flux before 2020, but the COVID-19 crisis accelerated social and technological changes that were already underway. The pace hasn’t slowed since then and seems unlikely to slacken any time soon—which means that the pandemic’s lessons in the importance of business resilience and adaptability remain as relevant as ever.

Here are some aspects that SMEs should consider ensuring their growth and relevance in an age of relentless change:

Invest in digital technology to get ahead of change

Tech is now core to the fabric of the business for most SMEs. After the accelerated shift to digital commerce, hybrid work and cloud applications during lockdown, now is not the time to slow down on digital investments. The next wave of disruptive technologies is already here, with rapid advances in artificial intelligence (AI) and the Internet of Things (IoT).

According to the ‘Small Business, Big Opportunity’, report, tech adoption is key to productivity and growth for SMBs moving forward. Almost half (47%) plan to increase their investment in tech and are open to emerging tech like AI and robotics. South African SMBs want to implement cutting-edge technologies during the next three years, such as 5G (23%), artificial intelligence (21%) and robotics (19%).

SMEs that exploit these technologies can get ahead of their peers, driving innovation and improving competitiveness. Research from Analysys Mason shows that businesses identified as early adopters of digital technology are twice as likely to have achieved their past business objectives, plus higher revenue growth over the past year.

Fortify against cyber-risks and other business interruptions

SMEs are not only challenged by the pace of technology change—risks of external shocks are at elevated levels. According to the Sage Cybersecurity research report, the top three risks South African business leaders identified for 2023 are critical infrastructure blackouts, cyber incidents and business interruption, including supply chains.

Forward-thinking SMEs are considering creating decentralized operations and redundant infrastructure to ensure continuity. Investments in cloud technology, connectivity, and remote work, many made during the pandemic, continue to pay off. However, SMEs must continuously re-evaluate their environments to ensure they can bounce back from business interruptions.

Embrace ESG as a business advantage

Environmental, sustainability and governance (ESG) concerns are no longer a matter under consideration for the largest businesses only. The energy crisis in South Africa, stricter regulation, and consumer expectations put sustainability front and center for businesses of all sizes. Investing in green technologies such as solar and batteries enables SMBs to kill two birds with one stone—becoming more resilient in the face of load shedding and reducing their carbon footprint.

Find strength in diversity and inclusion

Successful SMEs in this time of change will double down on diversity, equity, and inclusion (DEI). Building truly diverse teams brings many perspectives and ideas, increasing a business’s capacity to innovate and solve problems. Diversity isn’t just about the critical imperatives of race or gender equity—it also includes aspects such as diversity of personality, emotional intelligence, lived experience, risk appetite, neurodiversity, imagination, and adaptability.

Focus on continuous learning and workforce adaptability

Technology, process, and leadership are all important—but without a future-ready team and culture, a business will struggle to keep up with market and technology changes. SMEs should prepare their teams for the reality that the business will change, as will its external environment. Embedding continuous learning into the culture is essential.

Encourage employees to commit to acquiring new skills and learning from past mistakes. Seek their feedback so they feel they are helping to drive change rather than merely needing to react to it. And create an atmosphere of psychological safety so employees can make mistakes, express concerns, and suggest new ideas without fear of recrimination.

Lead and govern with agility.

Leaders and owners at SMEs will play a determining role in how the business responds to change. Those who see change as an opportunity rather than a threat can help foster a culture that anticipates and prepares for change. They will create organizational structures and governance models that support the need to continuously review market trends, customer behaviours, company performance and technological advancements to stay ahead of the curve.

Avoiding future shock  

Businesses that don’t design their operations, practices, infrastructure, governance structures and workforces for resilience and adaptability will likely experience a form of ‘future shock’ as they struggle to cope with change. But those who shift their cultures, make the right digital investments, and embrace change can build resilience, generate long-term, sustainable value, and remain at the forefront of their industries in an increasingly digital world. These SMEs will survive and thrive, benefiting their stakeholders and society.

Post the COVID-19 crisis, the operating environment accelerated social and technological. The pace hasn’t slowed since then and seems unlikely to slacken any time soon—which means that the pandemic’s lessons in the importance of business resilience and adaptability remain as relevant as ever.

By Gerhard Hartman, Vice President: Medium Business, Sage Africa & Middle East

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