19 February 2014
SMEs brace for change
Johannesburg, 19 February 2014: Small and medium enterprises (SMEs) in South Africa face a dramatic shift in technology use as the triple impact of social media, Cloud computing and the “bring your own device” trend transforms the competitive landscape.
Are they ready for the coming change?
That is a key question that will be addressed by SME Survey 2014, the latest edition of the original and largest representative survey of SMEs in South Africa. It has contributed ground-breaking research into the forces shaping SME competitiveness since 2003.
The survey, which kicked off this week, will also examine the impact of Government’s business support programmes. It will benchmark this year’s findings against those of the 2004, 2007 and 2010 surveys, which addressed a similar theme.
The SME sector plays a vital role in the South Africa economy, but can only continue to do so if these entities make the best possible use of various opportunities available to them. These include not only a wide range of technology options, but perhaps more critically, the numerous business support programmes offered by Government.
Due to be released mid-year, it is anticipated that the 2014 survey results will point to a significant uptake of Cloud applications by SMEs in South Africa.
According to Arthur Goldstuck, MD of World Wide Worx and principal researcher for SME Survey, the 2012 survey indicated that only 9% of SMEs were using the Cloud. The expectation among SMEs in 2012 indicated that use of the Cloud to have at least doubled by now.
“In fact, World Wide Worx expects that the figure will be higher than predicted, since the value proposition of the Cloud is so much clearer now. If, however, the figure is lower, we will be able to use the data to understand why take-up is slow and to determine what factors will ultimately persuade more SMEs to use the Cloud,” he says.
Microsoft points out that the large number of SMEs in South Africa and tight economic conditions mean it is important to enhance understanding of the tools available to help SMEs become more competitive and efficient.
“Knowing how far along the cloud journey the SME market is will make it easier for us to meet their future demands,” suggests Tracey Newman, Small and Mid-Size Business Lead at Microsoft South Africa.
Goldstuck says that additional research World Wide Worx conducted last year showed that the biggest factor inhibiting the uptake of Cloud in the enterprise market was simply lack of awareness of its benefits and a lack of understanding of its full value proposition.
“This enterprise attitude is obviously mirrored in the SMEs’ stance, and added to this is the ‘fear factor’, where small businesses are nervous about making a wrong decision during technological change. After all, in the SME space, a wrong decision of this nature has the potential to wipe out the business,” he states.
Business Connexion adds that it is for such reasons that the research is so important. “The survey will provide a better understanding of the benefits of, and approach to, the Cloud, which should make such critical decisions that much easier for SMEs,” says Charles Lalieu, Managing Executive Cloud Service Brokerage at Business Connexion.
Goldstuck suggests that Cloud uptake will continue to be a critical element of the research, as it is obvious that it is becoming an increasingly important part of the business landscape. “The goal is to discover both how it has grown since the last survey, and what is holding it back from more rapid growth.”
SME Survey 2014 will explore the impact that government support programmes has had on the sector. This is critical, since despite improvements and changes having been made to such programmes over the years, they appear to still be falling short of the desired intentions. Goldstuck says that the aim will therefore be to measure what the trajectory of improvement has been with regards to such programmes, and what can be done to improve them.
The Small Enterprise Development Agency (SEDA) is eager to analyse the results of the survey, as it explores new approaches to boosting SME growth.
“It will provide us with invaluable knowledge, particularly with regards to how small and medium sized businesses are receiving support from government programmes, and how they could be better served. This is in an effort to create a small enterprise sector that is able to make increasing contributions to the country’s productivity and employment creation,” says Lusapho Njenge, the Chief Strategy and Information Officer at SEDA.
Goldstuck adds that other significant business drivers – including BYOD, Internet adoption and the use of various online resources, including websites and social media – will also be considered during this year’s survey.
“The goal will be to get a sense of whether SMEs have evolved technologically from where they were in 2012, when their use of the Internet was fairly limited. The aim is to see if SMEs are maturing in their use of technology, and understand what is driving that maturation, along with other factors that affect SME competitiveness and business sustainability,” he says.
SME Survey 2014 is sponsored by the Small Enterprise Development Agency (SEDA), Business Connexion and Microsoft.
For more information, visit www.smesurvey.co.za