Tech-savvy SMEs (small to medium sized enterprises) perform better and employ more people than their non-technical counterparts.

This is one of the findings from research commissioned by Microsoft and conducted by global management consulting company Boston Consulting Group (BCG) in 2013, with an extension undertaken in 2014 by market research firm Ipsos MORI.

The study shows that tech-savvy SMEs were twice (42%) as likely to report job growth, when compared to SMEs who employ little technology (21%) in the workplace.

This is a crucial finding for countries like South Africa, which have a high rate of unemployment, and wherein SMEs play a starring role when it comes to creating employment. In South Africa, SMEs employ 61% of the local workforce, whilst 57% of GDP is contributed to by SMEs.

The research recognises the fact that the continued success of SMEs hinges on their uptake of technology advancements, which provides them with a competitive edge. Technology is an enabler of job growth, especially for SMEs based within emerging markets, where high-tech companies had four points higher job growth when compared to low-tech firms.

The biggest motivating factors driving tech adoption locally are improving internal efficiencies, optimising key business processes and reducing cost, with the opposite side of the coin – factors deterring IT spend by South African SMEs – being data security and loss of control of data, reliability as well as cost.

Additionally, migration to the cloud is associated with further growth, with cloud users showing 15 points higher revenue growth compared to low-tech SME users. South African companies seem to be aware of this trend as the use of cloud computing among South African SMEs has risen by twelve points since 2011 and now over three in four (77%) SMEs make use of the technology.

Companies have begun to see investment in cloud as a crucial factor for the success of their organisations, with around half viewing cloud computing or big data as important areas of investment. Overall, just over half (55%) of local SMEs expect to devote more IT spending to cloud computing solutions in the next 12 months.

Data back-up is cited as the main benefit of cloud computing by three in four (75%) tech-savvy SMEs, while seven in 10 (71%) believe that cloud solutions have provided greater reliability and less downtime.
Pierre Nel, SME director: MEA at Microsoft, explains that more SMEs in South Africa use Microsoft products than any other technology; and 51% trust Microsoft as a technology partners.

Tech-savvy SMEs are moving to the cloud, he adds, with local SMEs set to spend about $800-million on cloud services by 2017.

“Emerging market cloud users have grown faster in terms of both revenue and company size,” Nel says. “SMEs feel better prepared to benefit from and manage the rise of the cloud. Meanwhile, 59% of emerging market cloud users feel new tech will increase revenue and profit.”