8 November 2017

Africa: SMEs - Avoiding the Way of the Digital Dodo

Tagged:
analysis

DESPITE being a buzzword in today's market, disruption is nothing new to the business world. A quick glance at the Fortune 500 is proof: of the companies featured on the 1955 list, only 12% were still on the list in 2015. The rest were acquired by a larger competitor, filed for bankruptcy, or simply faded away into relative obscurity. What's different in today's world is the pace at which disruption takes place: technology is driving sweeping changes across entire industries, unseating market leaders in a matter of months. As the likes of Kodak, Blockbuster, and RIM can attest, the cost of not adapting to disruption is often outright business failure. SMEs face the same threat from disruption as their larger, more established peers, prompting organisations as large as the European Commission to implement programs that drive and support innovation within the SME sector. Innovation requires that companies gain a deep understanding of the needs of their customers and develop products and services that meet these needs. But for an SME, the cost of such innovation, or the amount of time it takes to gain deep customer insights, may be too much for all but the largest and most successful to bear.

Tapping into a partner network

In response, SMEs are turning to a range of partners who can provide insight, products, and services that create business impact and so help them become better placed to survive and thrive in a disruptive environment. Since disruption is constant, technology partners need to respond with upgrades and improvements on an on-going basis. New disruptors such as machine learning and blockchain further forces a partnership approach: the time it would take for an SME to fully understand the intricacies and business value of machine learning would put them well behind competitors who leverage the knowledge and expertise of their partner networks. In the past, technology partners would simply develop off-the-shelf solutions that are then sold to the CIO. However, every modern business is a technology business in some way, and this has reshaped the decision-making process within organisations. With the proliferation of cloud services, the CIO is less central to technology decision-making, forcing tech partners to engage with a mix of Lines-of-Business owners and executives. A talent management technology implementation, for example, now requires input and buy-in from not only the CIO, but the HR department, the CEO, and possibly the marketing department tasked with employer branding. The lines have shifted, and partners need to adapt.

Profile of a perfect tech partner

The best technology partners are able to have meaningful conversations about the business value and potential of new technology with their customers. Today's business owners are looking for immediate ROI on their technology spend. This requires solutions that are customer centric: without a deep industry understanding, solution speciality, and technical expertise, partners will be unable to show how their technology can translate into business results. In a crowded market, partners who can illustrate that they understand their customers' needs will have a natural advantage over their peers. A strong public profile will ensure a level of understanding with potential customers: most purchasing decisions are 8 percent made before engaging with a partner, so a strong marketing presence that emphasises the partner's understanding of unique challenges within their customers' industries is key.

The value of a global perspective

It's not all on the partner though: SAP's partner network has access to a range of tools and global industry best-practice guidelines that can bring the business value of technology to life. By utilising templates in the SAP ecosystem, partners are able to quickly customise solutions by switching on and off the components that they need, speeding up the delivery of ROI to the customer. Technological disruption is also changing buying behaviour, creating new engagement models, opening up opportunities for new business models, and enabling real-time decision-making built on accurate market and customer insights. Sitting at the center of this is the SAP Cloud Platform, which forms the foundation of innovation within the modern business. In a market as diverse as that of the African continent, the ability to provide adaptable solutions that can meet a diverse set of needs is key. Partners who can guide their customers in how they leverage technology to create innovative business models - for example, per-patient-per-bed invoicing at a hospital, or everything-as-a-service solutions provision - are better placed to explore new commercial opportunities with their customers. As Peter Mills, Head of Healthcare at SAP partner T-Systems says, the emerging and dynamic African market is sensitive about time-to-value. In response, T-Systems has adapted its engagement models in partnership with SAP to ease the pressure points through embracing the Partner Managed Cloud. This model allows customers to spend scarce capex budget on their core business investments, and so be better able to invest in state-of-the-art SAP technology that reduces costs and makes their businesses more sustainable. Without this type of innovation, many partners will go the way of Kodak, Blockbuster, and the 88% of companies that disappeared since the 1955 Fortune 500 list . Will you survive and thrive in the modern business world, or are you doomed to go the way of a digital dodo? strong>About SAP

As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device - SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 345 000 business and public sector customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com.

Tracy Bolton Director: General Business: SAP Africa

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