What’s Stopping Small Businesses from Moving to the Cloud
Silicon Valley has dominated the global tech stage. It’s home to the largest collective of tech hubs in the world – Facebook, Amazon, Apple, Microsoft, and Google. But now, other countries are hungry for a piece of the pie.
South Africa is one such country. Some of our entrepreneurs are reaching for similar heights and some, like Elon Musk, have already reached them. In 2017, CNBC noted that Africa currently has 300 tech hubs in 93 cities across the continent (compared to zero just a decade ago) with e-commerce and fintech companies leading the race.
However, there’s still some way to go before we see the next wave of Zuckerbergs and Pages emerge from South Africa. Xero’s 2018 Technology Adoption Report uncovered some key reasons preventing South Africa’s budding tech entrepreneurs from reaching these heights.
Are South African entrepreneurs behind the times?
There are five main demographics within innovation adoption: innovators (the first to adopt an innovation), early adopters, early majority, late majority and laggards.
Cloud technology is one of the biggest technology developments of this generation – it can run across teams all over the world, incurs relatively low costs and only requires an internet connection. However, our research revealed over a quarter of respondents (26%) don’t believe that they need cloud software, putting them firmly in the laggard category.
Education about the benefits of cloud technology could be the key to encouraging adoption, as 16% of respondents admitted that they didn’t know enough about the cloud. This is good news, as it’s never been easier to solve this problem: there are now plenty of resources, tools and apps to support a startup team in its early days. As SME South Africa notes in their Guide to Using Cloud Tech for small business owner’s, education can be a blessing for your entire business function, from consolidating your finances to sales, marketing and HR.
Adopting cloud technology means that you can access real-time data from anywhere cultivating a culture of transparency across your business. If you have a distributed team, cloud technology means that you can all access the latest documents from wherever you are. This is hugely valuable when it comes to version control!
You know what it is, so what do you do next?
South Africa’s small businesses are generally enthusiastic about technology adoption and understand how it can help them save time and money. Now they need to move on from just talking about it, and put it into practice.
You might assume that the main inhibitor preventing small business owners from adopting new technology is connectivity. It’s an ongoing issue in South Africa: 66% indicate severe issues for 1-3 days every month, and 29% struggle for 5-10 days. However, only 1% of respondents cited connectivity as their reason for not moving to the cloud. But there is no need from it to prevent them from cutting the old and adopting the new.
By adopting software that helps automate administrative heavy tasks, these small businesses can free up time to focus on other areas across the business. Some respondents already know this – 70% said they believe cloud tech will save them time, 52% believe it will save money, and 49% believe it will improve efficiency. In fact, nearly half of those who have already adopted cloud software said that it’s already saved their business more than 10 hours a week.
Taking small steps to acquire knowledge of new innovations is important, to keep up with the changing pace of business development. But cloud technologies have been around for long enough for small business owners to know that it can make your business more efficient, streamlining processes and generally make life easier for you and your staff. So, what are you waiting for?
By Colin Timmis, Head of Accounting, South Africa, Xero