Brett Thomas, Apex BI, Chief Sales and Marketing Officer explains how the channel can help SMEs.
Worldwide, small and medium enterprises (SMEs) are acknowledged to account for the majority of businesses. They contribute immensely to job creation and economic development in all countries.
South Africa is no exception to this with SMEs operating in a diverse number of sectors through the country. SMEs are said to be defined in terms of the number of people employed – a maximum of 250 full time staff – or an annual Rand turnover of up to R220 million. (Department of Small Business Development 2019).
The International Labour Organisation (ILO) estimates that SMEs provide 89.2% of employment in sub-Saharan Africa. SMEs are important drivers of the growth of economies throughout the world, including in South Africa.
The sector faces significant challenges because of their character, size and immense competition, plus reduced capacity to work from home scenarios and limited access to technology. The latter is where channel partners can be of immense support to SMEs.
South Africa’s SME sector is said to have been one of the hardest hit by the COVID-19 economic fallout. This illustrates how quickly revenues can decline and yet costs remain static with limited reserves available to sustain them. This is exacerbated by the contraction of the economy and the downgrading of the country by international rating agencies making borrowing for government and businesses more expensive.
In circumstances such as this, businesses react differently but many demonstrated what I would call a panic response looking at the first obvious place to reduce overheads quickly and that is – headcount reduction. This in turn has had a seriously negative knock-on effect on the national economy.
The South African Reserve Bank predicted that the local economy would likely contract by between 2-4% during 2020. However, Stats SA has recently released data showing that the actual shrinkage has been recorded at 7% – almost double what was anticipated as a worst-case scenario. SA’s economy is now attempting to move into recovery mode with SMEs now facing the costly and time-consuming exercise of recruitment, as they try to fill the gaps in their organisation while keeping a firm grip on business overheads.
SMEs can look to technology channel partners and tap into their expertise to assist them to quickly deploy solutions that have been developed specifically to assist businesses to understand, simplify and automate their dispersed IT and telecoms spend, services and assets. Channel partners are best placed to understand what modular options are available to SMEs and can guide on what is best suited to budget and application. SMEs are not financially positioned to hold such technology skills and depth of knowledge in-house, therefore, consultation with the channel can be an immensely beneficial model for the sector, especially in the tough on-going trading conditions, triggered by the pandemic.
Good channel partners can help SMEs to acquire complete control over ICT provider billing, and consequently any potential effect of revenue eroding expenses.