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, SMEs 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, says some businesses were fortunate enough to have the tools and systems in place to enable remote work.
“This minimized 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 However, some SMEs have out-of-date technology, while too many have not invested in technology at all.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.”
According to the World Bank, SMEs account for about 90% of all businesses and more than half of all employees worldwide. However, African SMEs face perennial funding challenges, with the IFC estimating that Covid-19 will widen a funding gap that already sits at $1.5-trillion.
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.
“If you are stuck with outdated on-premise technology, however, the lockdown restrictions would have been devastating to your productivity, especially as employees were suddenly working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% 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,” Mr. Gurreiro added.
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% of SAP’s customers globally are SMEs 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,” says Amin Meqdadi, Head of General Business for SAP Africa.
Mr. 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,” the Head of General Business at SAP Africa said.
“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 small businesses now depends on how well they adopt and leverage the many benefits of cloud technologies,” Mr. Meqdadi added.