Colin Timmis, Head of Accounting, South Africa, Xero
Silicon Valley is famous for its big technology players: Facebook, Amazon, Microsoft, Google, Apple, and Netflix. There’s no doubt that these global businesses have been the main driving forces behind the success of the digital age. This success has transformed the Californian economy. Silicon Valley is so rich that its combined wealth is apparently greater than some nations’ GDP.
Many countries and startups around the world would like to share in this success. The African continent, for example, is a hotbed of technological innovation. In 2017, CNBC reported that Africa was home to 300 technology hubs in 93 cities across 42 countries. So far, e-commerce and fintech companies are leading the race.
South African entrepreneurs are reaching for the same heady heights as Silicon Valley. With the right technology by their side, this goal is an achievable reality.
However, while the country’s small businesses are generally enthusiastic about adopting new technologies, they are not doing it fast enough. Xero’s 2018 Technology Adoption Report looks at some of the challenges holding SMEs back – and how they can be overcome.
South Africa’s small business owners are well aware of the main benefits of new business technologies. Namely, that they can save a company time and money. Software that helps automate administrative heavy tasks, for example, frees up time to focus on income-generating work.
From our survey, 70% of respondents said they believe cloud-based technology will save them time, 52% believe it will save money, and 49% believe it will improve efficiency. In fact, 48% of respondents claimed that it’s already saved their business more than 10 hours a week.
Nonetheless, there are still those still relying on old legacy systems. Many assume that the main inhibitor preventing them from adopting new tech relates to poor connectivity.
Connectivity is an ongoing issue in the region and many businesses experience outages: 66% endure severe issues for 1-3 days every month, and 29% struggle for 5-10 days. However, this has not prevented many from cutting out the old technology and adopting the new. In our research, connectivity was only cited by 1% of respondents as their reason for not moving to the cloud.
So, what’s holding people back?
Computing the cloud
Our research revealed that over a quarter of respondents (26%) believe that they don’t need cloud software. In marketing terms, these businesses are known as the ‘Late Majority’ or ‘Laggards’. They take a ‘wait and watch’ approach to new tech; sticking with their old ways of working until they are compelled to change because everyone else has.
Interestingly, 16% of respondents admitted that they didn’t know enough about the cloud to make a call one way or another. This highlights the need to educate the small business community on the many advantages the cloud can provide a budding entrepreneur.
The good news is there are plenty of resources, tools, and apps to support a startup team in its early days. These resources can help streamline a business’ entire operation, consolidating its financial, sales, marketing and HR functions. It’s never been easier to start one’s own business, create the right framework within which to build a successful operation and maintain a healthy cash flow.
Adopting cloud tech means you can access real-time data from anywhere cultivating a culture of transparency across your business. If you have a distributed team, cloud tech encourages and enables collaboration. Regardless of where in the world they are individually based, colleagues can work together in real-time. They can access the same documents, make live updates and work from the latest version. This keeps mistakes to a minimum and helps prevent critical information from getting lost.
The power of cloud technology is ready to help South Africa’s small business community take on Silicon Valley. Xero’s research shows that it is already benefitting many organisations. With greater awareness of the benefits of cloud technology, adoption rates will improve – and small businesses will enjoy greater success.