The rapid evolution of technology that has led to the industry’s latest buzz phrase, digital transformation, is having a massive impact on small and medium enterprises (SMEs) in South Africa – but many are not even aware of it.
This sector remains vitally important to the SA economy, so it is critical to understand how digitally prepared these entities are, and whether they are keeping pace with change, or whether many are being left behind.
One of the key aims of SME Survey 2018, in partnership with Intuit QuickBooks, is to establish the digital readiness of SMEs. SME Survey is the original and largest representative survey of SMEs in South Africa and has contributed ground-breaking research into the forces shaping SME competitiveness since 2003.
Wendy Walker, Global Expansion Intuit QuickBooks, says being digitally astute has the power to transform business life and encourages small business and self-employed to make the transition now so they have a head start into the new year.
“Technology brings new opportunity to the business world – especially when it comes to online accounting. Successful businesses are driven by owners who really know their numbers; and the power of digitally based resources makes this more accessible for all businesses. With the ability to view business data anytime, anywhere and on any device, owners can make smarter, more informed business decisions based on real-time insights.”
Arthur Goldstuck, MD of World Wide Worx and principal researcher for SME Survey, explains that for the purposes of the survey, digitalisation is defined as the integration of digital technology into all systems and processes in the business.
“Businesses across all industries are beginning to see the massive competitive advantage to be gained from digital processes,” he says. “This goes far beyond simply electronic scans of documents, encompassing everything from online accounting to digital sales processes. We aim to find out whether SMEs have also realised the benefits of such an approach and are preparing to digitalise their businesses, or whether ‘digital transformation’ remains a term that mystifies, rather than simplifies.
“Naturally, SME Survey will look not just at how ready these businesses are for digital transformation, but also at the tools and services SMEs currently use that can be defined as being digital, and whether it is viewed by them as a threat or an opportunity.”
He adds that the survey will also take an in-depth look at the future of the accounting function and the role the accountant plays for these businesses. Goldstuck suggests that this is a role that is evolving rapidly, driven by the rise of online accounting functionality, which enables SMEs to produce for themselves many of the financial documents for which they previously relied on their accountant.
“Online accounting through the cloud is designed to increase efficiencies for accountants and SMEs,” says Wendy Walker. “It enables easy collaboration between all parties involved in managing the financial health of a business. With the access to free trials, online resources and training it’s never been easier to work together.”
“We will also pay close attention to some of the latest technology trends, such as artificial intelligence (AI), Big Data, Blockchain and the Internet of Things (IoT), in order to discover whether this sector understands these advanced technologies and whether it is making plans to begin adopting some of these. Naturally, this ties back to the main focus, as adoption of any of these technologies would be a clear indicator that these businesses are preparing to transform.”
The 2018 survey will also focus on those issues that keep SME owners awake at night. In the past, this has encompassed issues ranging from crime to load shedding to road conditions. “This year, we are interested in assessing the impact that fraud, corruption and state capture are having on this sector.”
Goldstuck says that the previous few surveys have kept tabs on the impact of cloud on the SME segment, and the expectation is that, this year, cloud adoption will have passed the 50% mark. There is also anticipation of significant growth in fibre as the connectivity solution of choice.
“Since fibre and cloud are both key factors in effective digital transformation, significant increases in the former two will suggest a good foundation has been laid for the latter to take place. Therefore, while the new survey will only be investigating the early stages of such transformation in the SME space, we hope that we will be able to report that the digital shift in this market has begun.”
It’s printing, Jim, but not as we know it
Selling printing services is not only about the hardware anymore, writes ARTHUR GOLDSTUCK
The seminal science fiction series Star Trek generated many catch-lines, like “The Prime Directive” and “Live long and prosper”. One of its most parodied lines, however, is Doctor Bones McCoy’s words to Captain Kirk on encountering an alien species: “It’s life, Jim, but not as we know it.”
That’s exactly the way one could describe the printer industry today. Every time an HP, Epson or Konica Minolta releases a new machine for this sector, one can sense the puzzled frowns of people taken by surprise that it still exists.
The difference is that it has evolved from a focus on paper to an emphasis on document management.
One of the first companies to spot that shift in the market, Japanese-headquartered Konica-Minolta, pioneered the concept of a dedicated printer company introducing its own software development division.
“We’ve always believed our role is solving problems for the customer, and not just to provide print, copy and scan solutions,” says Marc Pillay, CEO of the company’s South African division. “Our primary focus is multi-functional devices, but we always look at adding value to clients. Our real job is to assist in achieving a better return on investment.”
The proof of the pudding is that the local division is one of the biggest Konica-Minolta distributors in the world. The reason is simple: unlike most other countries, the South African operation has both a direct and indirect channel. That means it is able to supply companies through its reseller network, while also having a presence on the ground in the form of a dealer network across the country. That, in turn, has given it access to municipalities and other organs of state.
“Our value proposition is based on quality products, service and an unparalleled supply chain,” says Pillay. “When everyone was afraid to do business with government, we thrived on it. It comes from being located in areas where it’s easy to do business with us.”
One could call that the secret of success for existing demand. The coming era, however, will require an appreciation of the next big shifts in printing, says Pillay.
“We’ve seen the big shifts from analog to digital, from monochrome to colour, and from decentralisation to centralisation of printing. The next shift is unbundling printing into a hybrid approach, using both cloud and managed solutions. It’s all going to become subscription-based, and it will be print-on-demand. The high-end customers go into that very quickly, but we still have to cater for people who just do copying.”
Pillay believes that the opening of Microsoft’s Azure data centres in South Africa in March has already made a difference.
“Now you can scan from a device into Microsoft’s SharePoint online or Google Drive. It’s not about screen size anymore, but what you can do to make an impact.”
Where people don’t print, says Pillay, they’re absorbing documents digitally.
“We have to make sure that, where we lose the print, we are gaining the management of the scan, digitisation of the document or management of the workflow. Our income will come out of the workflow.
“Clearly, we’re not just focused on selling a piece of hardware anymore.”
- Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter and Instagram on @art2gee
SA chooses most loved local businesses
A new World Wide Worx research report identifies and names South Africa’s 12 Most Loved Local businesses, and places the spotlight on the vital role commercial businesses play in the South African economy. The country’s favourite local businesses include the Chapman’s Peak Hotel in Hout Bay – famed for its calamari, celebrity chef David Higgs’ Rosebank eatery Marble as well as Rouge Day Spa with branches in Kenilworth and Constantia in Cape Town run by a dynamic mother and daughter duo.
The aim of the Most Loved Local report was to celebrate those businesses South Africans love the most and to investigate exactly what makes consumers big fans of these entities. It further offers these enterprises insights into what it takes to succeed in business, highlights the qualities that convert clients into fans and encourages more South Africans to ‘shop’ local.
Commissioned by Santam, results were compiled using a combination of digital listening tools and traditional research. Social media listening using organic search analysis looked into which business categories were being searched for most. This was followed up with a trend analysis to assess whether a business category was growing in popularity, keyword volume analysis to refine the categories and finally social listening within the categories which businesses were being spoken about in the most positive terms. Thereafter, a poll was conducted among 2 489 respondents to find out what made them love a local business – or not. The sample was nationally representative and aligned to the economically active population per province. A respected independent research house World Wide Worx conducted the research.
The full list of businesses that came top across 12 categories are:
- Place to Stay: Chapmans Peak Hotel (Cape Town) – the one with the perfect calamari
- Eatery: Marble (Johannesburg) – the one with the celebrity chef in the kitchen
- Butcher: The Butcher Man (Cape Town) – the one that people cross town for
- Bakery: Fournos (Johannesburg) – the one that is way more than a bakery
- Spa: Rouge Day Spa (Cape Town) – the one run by a dynamic mother-daughter team
- Entertainment Spot: Gold Reef City (Johannesburg) – the one with the heart of gold
- Gym: Dream Body Fitness (Johannesburg) – the one that is completely unintimidating to work out at
- Interior Designer: By Dezign Interiors (Johannesburg) – the one that really, really gets its clients’ style
- Market: Bryanston Organic & Natural Market (Johannesburg) – the one that was an organic market before it was trendy to be an organic market
- Laundromat: Exclusive Dry Cleaners (Johannesburg) – the one that treats every single client like family
- Car Wash: Tubbs’s Car Wash (Johannesburg) – the one that cleans your car while you have a haircut
- Construction company: Radon Projects (Pretoria) – the one that is ready all day and all night
Delving into what makes a consumer go from ‘client to fan’, the key factor standing out above all others was service. Arthur Goldstuck, CEO of World Wide Worx, says it seems South Africans will forgive a multitude of ‘sins’ if they are treated well. “Good service was the number one factor that makes 40% of those surveyed support a local business. This was followed by quality products at 18%. Third place went to value for money at 10%, proving the old adage that competing on price alone is not a sound business strategy,” said Goldstuck.
When asked what makes them loyal to a local business, some interesting views across age groups emerged. “Younger clients are more swayed by quality, while older ones are impressed by service. This seems to fit with younger people wanting the status of nice things, and older people wanting to feel valued and respected,” said Goldstuck.
Unsurprisingly, all 12 Most Loved Locals called out service as one of their guiding lights and core pillars when interviewed. Theo and George Parpottas, owners of Exclusive Dry Cleaners, the selected company in the laundromat category, believe when someone walks into their shop, they should be greeted with smiling faces and courteous people. “We don’t care if it’s the president or a beggar, from the moment they walk in, they are a client. We greet them, we are courteous, and we treat them with respect. It doesn’t matter what they bring.”
For Gary Karycou, who co-owns Marble in Rosebank with celebrity chef David Higgs, it is all about attitude. “You can teach someone anything if they want to do it, but we employ on attitude. You get the basic skills but if someone really wants to learn, you can transform them.” He continues, “Giving the best service to our clients, is our motto. It’s something that’s lacking in South Africa and even globally. Businesses just become a bit complacent.”
Famed Green Point butchery and restaurant, The Butcher Man, is owned by Arie Fabiani. He says people will drive past other butcheries and come all the way to the Butcher Man because “we deliver a great service. Good service is critical, and our team knows it.”
Another key finding was that people are more likely to recommend a business if there is a good deal or excellent value for money. Mokaedi Dilotsotlhe, Chief Marketing Officer at Santam, says this is an interesting finding. “Perhaps we are more likely to share a good deal with others and keen to help others find great nuggets of the positive trade-off between value and price. So, it is worth ensuring that, in addition to service and quality, your clients feel like they are getting value for the money they spend with you. That way, they are more likely to tell family and friends the good news!”
Dilotsotlhe added that the report’s release has been well-timed as the need to stimulate sectors of the economy which can create jobs has never been more vital. Commercial enterprises are responsible for a significant percentage of the labour-force in South Africa, and the impact thereof is significant. Due to the fact that these enterprises remain a largely underinsured sector, the campaign also seeks to highlight the need for insurance as a vital aspect of business continuity. When they thrive, it benefits the whole nation, and from a Santam perspective, this translates into sustainable growth for our business.
To download the full report, click here.