Businesses are still facing challenges

FOLLOWING the onset of the Covid-19 pandemic, most businesses were left with their backs to the wall as they faced the challenges presented by global lockdowns.

While some large enterprises had the competitive edge during this period, many smaller businesses attempted to bridge the gap by moving their service offerings online.

In an effort to keep up with consumer demands, business owners needed to find ways to fast-track operations to stay in business.

As a result, one of the biggest challenges to emerge in this digital transformation was the adoption of new technology and allocating additional funds to accommodate this essential component to their business function.

In 2019, a report by Xero in partnership with World Wide Worx found that over half (53%) of small businesses in the country had not adopted cloud technology yet due to connectivity problems. But the urgency to transform is taking centre stage, with the 2021/2022 report finding that 65% of small business decision-makers feel technology has become more critical to their businesses since the start of the pandemic.

On a global scale, while 97% of companies have accelerated the adoption of technology to get through the pandemic and scale for the years to come, only 23% of SMEs were able to dedicate resources to digital tools.

This is according to a survey carried out by the World Economic Forum, which also points out that SMEs are still scrambling to meet mandated health and safety measures, impacting their ability to remain operational.

In South Africa’s relatively young e-commerce market, barriers still exist for businesses that struggle to get all the components of a seamless experience, from payments through to logistics, right. For smaller businesses, the foray into e-commerce can be much harder because they have to compete with the bigger players in the market.

Many entrepreneurs often encounter these barriers as they go, with no foresight or knowledge of what they can expect. Because of the precarious environment that many SMEs operate in, short-term objectives and the dayto-day operations take priority.

“Digital transformation” is a vast field which can cover everything from an electronic invoicing system or a company website to company-wide software systems and building out an e-commerce platform. Depending on the SME’s goals, this can come at a significant cost, especially as the global pandemic has forced companies to shift available funds to more pressing areas such as health and safety.

“Going digital” often requires skills that include being technical savvy and basic marketing capabilities. As SMEs consider leaving legacy systems behind for modern systems, they face tough competition from larger organisations, which can easily attract skilled staff.

The skills gap that exists in the IT space, therefore, trickles down to SMEs which, without trained staff to operate these new technologies, fall behind.

SMEs are the backbone of South Africa’s local communities and economy, providing opportunities for employment among otherwise jobless youth. Focusing on targeted solutions that take into account all the perceived barriers will not only lead to a more digitised economy but also a positive outlook for the economy at large.