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Connectivity accelerating digital transformation for SMEs

Article written by Alison Job (MTN)

Telecommunications services have an integral role to play in two key areas for SMEs, according to Priashan Pakiriy, Head of Enterprise Fixed Solutions at MTN Business. “The first is around how an SME’s CRM interactions are affected when they move their business to an online presence, as the COVID-19 pandemic has accelerated all businesses’ online strategies.”

“Secondly there are efficiencies to be gained by SMEs from both a cost savings and business perspective, with technology enabling SMEs to scale and compete with larger, even international, businesses.”

Caring for customers

“If you consider how SMEs drive customer engagements, they predominantly rely on face-to-face interactions. Regardless of whether the SME offers accounting, legal or plumbing services, they rely on human interaction to find potential customers and sell them their services. The small business soon finds that it’s limited by the number of people it has in the business.”

This creates a barrier for SMEs to scale because they rely so heavily on people interactions and relationships for their marketing and customer engagements. This is where digital transformation can help them. An online presence will assist SMEs to attract customers by giving them access to the multiplier effect. “There’s no need to go out and see each and every customer if they have a strong online presence that creates awareness of their business amongst their target audience. The whole situation becomes demand pull – where customers come to them – as opposed to supply push – where they go out and look for customers. This is probably the first activity they should look at from a digital transformation perspective.”

Once they have the customer and have sold them a solution, technology can assist the SME to improve its after sales service. For a small business to have a contact centre to do customer support is almost unheard of, simply because it’s so costly to set one up. The SME might take the occasional phone call or respond to emails, but generally it takes time to get back to a customer and they end up having a poor customer experience. Digitally transformed SMEs can have a contact centre-as-a-service and pay per use, there’s no need to hire agents and have them on the payroll, instantly improving customer relationship management.

Finally, SMEs have to ask themselves whether they really know their customers. Doing so requires access to customer data – and large organisations spend a fortune garnering insights into their customers. This is often beyond the reach of the average SME owing to affordability. However, public cloud services offer access to tools that can be used to do analytics on customer data, enabling the SME to understand its customers better as well as how best to position its product or solution.

Better business efficiencies

Which brings us to other business efficiencies that can be gained through digital transformation. “It’s a reality that today’s SMEs compete for business with large corporates and multinationals. We’re seeing a proliferation of international operators entering South Africa and servicing the same customer base as local SMEs. How can an SME compete in terms of people, capital and technology? Well, an SME can start by lowering its cost to acquire and service customers. Just doing that will help them gain efficiencies and cost savings that they can pass on to their customers and still remain competitive in the market.”

He goes on to cite the example of an SME that supplies electronic components. “Running a production line is an expensive exercise – especially as international competitors are importing the completed item. Why shouldn’t an SME use technology to source a partner to do the manufacturing for them, and order stock as and when required so that they use their working capital more efficiently, allowing them to gain a price advantage and to compete with the multinationals?”

Another constraint faced by SMEs is that they rarely operate outside of the area in which they’re based purely because they can’t find customers outside of that locale – and if they do, it’s costly to service them. However tools such as email, easy data sharing and other cloud-based tools mean that SMEs can expand their customer base outside of their geographical area, and even outside of South Africa’s borders. This capability wasn’t accessible to SMEs previously.

On the topic of cloud-based tools, SMEs no longer have to invest in software and pay expensive perpetual license fees. “Digital transformation and the advent of public cloud means that SMEs can use services on a consumption basis and take the capital they’d have spent on software and invest it into the business instead. They can access systems previously not available to them at a fraction of the cost and scale up and down as their needs demand.”

If you aren’t connected, you’re nowhere

Digital transformation is presenting new opportunities for SMEs and opening new doors – and markets – for them, but in order to be able to access cloud services and establish an online presence, an underlying requirement is reliable and affordable connectivity. Pakiriy highlights that reliability trumps cost when it comes to connectivity: “There’s no point in trying to leverage cheaper services if the SME has to invest upfront in telecommunication infrastructure. The fact that ubiquitous broadband services are available from multiple providers across South Africa has benefited SMEs enormously.”

Over and above providing them with access to services, being connected means that small business owners can research everything from how to create an effective online presence to the statutory requirements imposed on SMEs. “Owing to circumstance around the pandemic, people been forced to think about starting their own small enterprise. However this comes with a daunting assortment of statutory requirements from registering the business, acquiring a tax number to opening a bank account. This can prove onerous and time consuming for someone just starting out, but what many people don’t realise is that most of these steps can be completed online, even from a cellphone.”

Business owners can research and do a business plan using the internet prior to even embarking on the legal requirements. They can find out where there customers are and whether there’s even a market for their product or solution. Other resources available to them include the provider of their technology. “Your system integrator will ask the right questions to understand your business and its requirements, and design an IT solution that will work for your vision. This shift from selling a product towards more consultative selling gives the SME business owner access to free advice and means that they only acquire the technology that they need. All too often a new business owner will splash out on laptops, printers and other technology that actually aren’t right for the business. They need to be freed up to focus on their product or solution and finding customers, and allow expert to advise them on a technology infrastructure that’s based on their budget.”

He also points out the benefit of dealing with a telecommunications provider: “Dealing directly with a public cloud provider can be daunting for any business owner. While you can access the same tools as big corporates and at a fraction of the cost, there are so many applications to choose from, identifying the right one for your business can prove challenging. Then once you’ve made your selection, you need a credit card to pay for the service before you’ll be given access to it. A telecommunications provider acts as a systems integrator to bridge that gap, offering services on a pay-per-use model that comes with payment terms.

“This is where telecommunication companies have changed their business model. Previously they wanted to build their own services and sell those, but have since shifted to partnering the big public cloud providers, setting themselves up as distributors and bridging the gap between the public cloud and the end user, offering a smooth customer journey. The aim is to focus on the customer experience as much as possible, freeing up business owners to focus on their core task – running their business.”

Photo: Priashan Pakiriy, Head of Enterprise Fixed Solutions, MTN Business

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