South African SMEs are under growing pressure to use technology in more sophisticated ways to meet the expectations of their customers, reduce costs, and stay ahead of growing regulatory and tax compliance demands.
That’s according to Daryl Blundell, General Manager for Sage Pastel Accounting, who says that it’s more important than ever for SMEs to educate themselves about the latest technologies. “With the growing pace of change in society, business and technology, SMEs must integrate technology into their business to remain competitive,” he says.
“Their customers are online and demand even small businesses to have the ability to serve them using digital channels. Regulators and tax authorities demand prompt and accurate reporting. And in an uncertain economy, it’s more important than ever for smaller businesses to be lean, agile and smart in the ways that they do business.”
Today’s technology empowers small businesses to access new markets, drive costs out of their businesses, and improve relationships with their customers — helping them to boost their revenues and profits. Research such as a recent Boston Consulting Group (BCG) study commissioned by Microsoft shows that ICT gives smaller businesses an edge, whether they are in developing or established markets. The study of 4,000 SMEs in the US, Germany, China, India, and Brazil found that entrepreneurs who were early technology adopters increased their annual revenues 15% faster than their competitors.
Blundell says that the challenge for SMEs is that they often don’t have in-house ICT resources to investigate and drive new technology opportunities for them. Furthermore, they lack the capital to build substantial in-house IT infrastructures. This leads to a misconception among SME owners and managers that technologies such as social media, analytics and the cloud are too
expensive and complex for their businesses.
But the reality is that powerful enterprise business applications, collaboration tools, reporting tools, and digital platforms are more affordable than ever before, says Blundell. Thanks to the rise of cloud computing, SMEs can choose from a wide range of affordable solutions that help them compete with large companies with big IT budgets, he adds.
“The industry shares some blame here because some vendors have focused too much on selling the technology and not enough on the underlying benefit,” Blundell says. “SMEs want solutions to business problems, such as keeping accurate financial records, getting visibility into business trends, and reaching new customers. The cloud puts affordable solutions to these business problems within their reach.”
Blundell says that the flexibility and simplicity of the cloud are among its most significant advantages for smaller organisations. It enables them to buy business applications as a service they pay for per month, rather than them needing to invest in software licences, servers and an IT department to keep everything running smoothly. It also gives them the ability to access their applications and data anywhere they have an Internet connection and mobile device or computer.
This eliminates much of the risk and complexity SMEs have come to associate with IT, Blundell says. “The cloud lets SMEs focus on the business outcomes technology enables, rather than the plumbing,” he adds. “Given their limited budgets and access to IT skills, every SME can benefit from technology that is simple to implement and use.”
By Daryl Blundell, General Manager for Sage Pastel Accounting.