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Over 50 Percent of South African Small Businesses Don’t Adopt Cloud Technology Due to Connectivity Issues

TechInAfrica – The accounting software firm, Xero, has partnered with World Wide Worx (WWW) to conduct 3rd annual State of Small Business report. According to the report, around 53% of South African small businesses did not adopt cloud technology because of connectivity issues.

The report also showed some findings which indicate challenges facing small businesses including:

  • Around 59% of the respondents said that scheduled power by the national supplier was a major challenge for their business
  • Forty-three percent or more than two-fifths said their connectivity is okay but not fully reliable
  • Twenty-nine percent cited that new technologies that entered the market were the challenge, and
  • Around 45% said that the challenge was compatibility with customers
Colin Timmis, General Country Manager of Xero South Africa
Colin Timmis, General Country Manager of Xero South Africa via screenafrica.com

The findings gathered from opinions of 400 South African small business owners and 200 South African accountants. Nearly half of the respondents (47%) said that their staff was highly tech-literate while 67% said that they did not allocate budget to give training for their employees on how to use the software provided.

“Our most recent State of Small Business report gives a real insight into what it’s like on the ground for small businesses in South Africa. In uncertain times like these, technology can provide stability. For example, cloud software can help overcome issues with connectivity. It helps to make your business more agile, meaning you can work from anywhere at any time. Being able to move when there are scheduled power cuts or patchy internet is crucial to keeping your business running,” said Colin Timmis, General Country Manager of Xero South Africa.

Almost all respondents who had adopted cloud technology said they noticed an increase in profit (98%) and efficiency (99%). Fifty-one percent of the small businesses said that it had improved their ability to work anywhere while twenty-five percent said it had improved their security.

Over 50 Percent of South African Small Businesses Don’t Adopt Cloud Technology Due to Connectivity Issues
Over 50 Percent of South African Small Businesses Don’t Adopt Cloud Technology Due to Connectivity Issues via newsroom.co.nz

Furthermore, the report showed that around 56% of the small businesses said that they used basic automation both in operational and accounting tasks. One-fourth of respondents said they used the Internet of Things (IoT) while 19% said of using cloud computing.

Timmis added, “It’s great that South Africa’s small businesses are seeing the benefits of adopting the technology. But there will be a learning curve for anyone using new software and employees shouldn’t be expected to self-teach. Because people are more tech-savvy than they used to be, training normally only takes a few hours. It could make all the difference in getting return on investment on the technology that you buy.”

Other key findings from the research show:

  • Seventy-nine percent of the small business owners said that it was very important to be backed up by accounting software support
  • Seventy-eight percent of the respondents used accounting software to manage their financial records while fifty-five percent of them said that they were using desktop solutions
  • Twenty-two percent said of using cloud accounting tools while twenty-three percent were using manual accounting books
  • Only 0.25% of respondents were using AI and machine learnings

About Xero

Born in the cloud, Xero is a beautiful, easy-to-use platform for small businesses and their advisors. The company has 1.4 million subscribers in over 180 countries and a thriving ecosystem seamlessly integrating with 700+ apps. On the inaugural 2018 Financial Times FT1000 High-Growth Companies Asia Pacific list, Xero was the fastest growing tech company in the $200 million+ segment. Xero won Small Business Accounting, Practitioners’ Choice Award at the 2018 Accounting Excellence Awards and was rated by Canstar Blue as Australia’s best accounting software four consecutive years, 2015-2018.

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