Four reasons why SMEs are taking to the cloud


In the midst of a period of ongoing disruption, SMEs are increasingly turning to the cloud to help evolve their business models, achieve greater efficiency, and drive innovation.

According to Jade Michael, Head of Public Cloud at SAP Africa, the impact of the pandemic has left many SMEs operating under constrained conditions. “The ripple-effects of the pandemic and the global economic slowdown have disrupted SMEs’ growth plans, with many now seeking new tools and technologies to drive innovation and ensure continued growth.”

A 2021 Gartner CEO Survey found that technology-related change was the second-most important priority for CEOs, behind only growth.

“What many SMEs are realising is that achieving growth in an ever-evolving business environment is impossible without innovation, and in today’s market, innovation requires an optimal technology mix,” explains Michael. “Companies that strive to maintain their position will simply be overtaken by those who can unlock the advantages of technology and innovation, beating them in product development, customer acquisition and growth.”

A platform for innovation, growth

Cloud has been identified as the platform for innovation for millions of businesses around the world. One recent report predicts that cloud adoption could drive more than US$1trillion in new value by the end of the decade, with business innovation and optimisation the key enablers.

“There is a clear advantage to moving quickly and for SMEs to get ahead of competitors by accelerating their cloud adoption,” says Michael. “Early adopters will realise greater value and returns than their less nimble peers, capturing a disproportionate share of the total value from cloud adoption. Much like compound interest in an investment portfolio, early cloud adoption can drive exponentially greater lifetime value and deliver far greater returns to the business.”

For SMEs, the public cloud offers the quickest route to adoption and can help realise returns faster, as the cloud vendor provides everything needed to build systems and processes in the cloud without SMEs having to invest in the hardware, software and skills needed to build their own cloud platforms.

“A public cloud solution can be the quickest route to access greater elasticity, cost-effectiveness and the latest technologies,” explains Michael. “A public cloud platform is also one of the key pillars of a broader business technology platform that includes strong integration and extension capabilities, easing the introduction of new services and innovations to SMEs’ technology mix.”

Unlocking four key cloud benefits

Michael adds that SMEs facing widespread disruption and uncertainty are turning to technology to help bring greater transparency over business operations and drive process efficiency.

“Enterprise resource planning solutions have become increasingly available to SMEs over the past few years, after decades of driving process efficiency and innovation in the enterprise space. SMEs are leveraging the power of cloud ERP to create new business models, transform existing business operations, and achieve greater efficiency across all spheres of the business.”

According to Michael, SMEs that are moving to take advantage of the cloud and cloud ERP are enjoying four key benefits, namely:

1. Greater agility – “The pandemic and ongoing global crises have created a sense of urgency for a cloud platform that is accessible anytime, anywhere. This helps SMEs address the dramatic changes needed in their business, while also boosting operational efficiency and helping the business achieve a sense of normalcy more quickly.”

2. Access to new technologies – “To improve planning and drive greater operational efficiency, SMEs increasingly need access to automation and analytics tools. Automation and artificial intelligence can take over repetitive or low-value tasks to free up precious internal resources, while advanced analytics bring data to the fingertips of SME decision-makers. Cloud ERP solutions enable SMEs to implement new technologies more quickly and scale technologies depending on the business needs.”

3. Better integration with networks, partners – “SMEs lack the resources and access to networks of their enterprise peers. This makes it vital for SMEs to ensure they can integrate with partner ecosystems, developer networks and other specialists, as these networks and ecosystems can greatly improve their scale and reach. Using a cloud-based ERP can directly connect SMEs with an ecosystem of likeminded partners and suppliers, providing access to additional skills and capabilities.”

4. Customisation and standardisation – “One of the greatest costs that SMEs incur during digital transformation efforts is in customising solutions to perfectly suit the SME’s needs. The growing adoption of cloud solutions has given rise to a multitude of templates that cover various business processes and applications across all industries. By using cloud services, SMEs can access these templates to drive down costs while still improving operational efficiencies and growing the business. For those that need specific solutions not covered by templates, an agile ERP with modular applications can help SMEs design and implement process improvements to quickly respond to changes in the market.”

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