SMEs seemingly keen on IoT
Small and medium enterprises
(SMEs) are notoriously slow when it comes to adopting new technologies, but
South African SMEs are about to do a U-turn in this regard, thanks to the
Internet of Things (IoT). In fact, as many as 83 per cent of decision-makers responding
to a new survey expect to be using IoT in their business within five years.
This was one of the most
notable results from SME Survey 2018, a research project conducted in
partnership with QuickBooks, based on 1400 interviews with SME decision-makers.
However, the IoT (the network of devices featuring an IP address and the
communication between these internet-enabled devices and systems) is very much
an outlier in terms of future technology uptake by SMEs, says MD of World Wide
Worx and principal researcher for SME Survey, Arthur Goldstuck.
"The IoT is crucial to the
development and success of many SMEs and it's no surprise that South African
businesses are recognising the value of implementing and applying this
technology," says Global Leader of the QuickBooks Accountant Business, Rich
Preece. "Time and insightful data are essential commodities for any small
business and they are two of the biggest advantages the IoT can offer small
businesses."
While the Survey asked SMEs
about multiple future technologies – including artificial intelligence (AI),
Big Data, 3D printing, crowd-sourcing, Blockchain and virtual reality (VR), as
well as IoT - only the latter appears likely to have significant uptake among
SMEs in the next few years.
"SME decision-makers are
generally only willing to embrace a new technology if there is a clear business
case to do so," says Goldstuck. "We noted in the interim results that
the uptake of fibre ahead of ADSL is paralleling that of ADSL's growth over dial-up
in this sector a decade ago. This is clearly due to the obvious benefits fibre
delivers to SMEs. It has become obvious over the years that only technologies that
directly benefit the SME, by helping it to save or make money, or become more efficient,
will be adopted. IoT clearly fits the bill here.
"Many SMEs have already
been exposed to the benefits of the IoT in some form or another, thanks to
technologies for vehicle tracking and asset management, so they are already
aware of its benefits. This is the most likely reason SMEs foresee this as an
area of major investment in the near future."
He points out that next on the
list were AI and Big Data, which came far behind and were only expected to be
adopted by 29 per cent and 27 per cent of SMEs, respectively. This is not too
surprising, says Goldstuck, considering that these technologies are mostly beneficial
to businesses with large customer bases or complex logistics.
"Only 21 per cent of SMEs
state they will consider 3D printing, and this will likely be mostly in those fields
where models or prototypes are required, or that need a limited run of a
particular product. While the potential benefits are huge, the current
cost-benefit ratio is not at a level that most SMEs would find
attractive."
Crowd-sourcing was also not popular
with SMEs, with only 16 per cent of respondents answering positively. Goldstuck
puts this down to it being too new as a business tool. Because it requires a
new way of thinking, adoption requires a mindset change within SMEs, something
that always takes time to achieve.
"Blockchain is also a very
new technology, so its value proposition is not entirely clear for SMEs. Furthermore,
it is intimately tied to Bitcoin, which, due to its crash earlier this year,
has had a damaging impact on perception of Blockchain. Before Bitcoin climbed
through the roof, 13 per cent SMEs were prepared to consider Blockchain, but
following the January crash, the figure dropped to a mere 5 per cent."
Similarly, he points out, AI
also saw a major fluctuation between the interim results (34%) based on
late-2017 interviews and the more recent early-2018 data (19%). He suggests
this disaffection with AI stems from the intensification of coverage of the
impact that Facebook and Google algorithms have had on the promotion of fake
news. Since it was AIs that effectively made the decisions that drove many of
the fake news stories' popularity, this may well have had an impact on how much
trust SMEs are willing to place in this technology.
Innovative hardware did not
fare much better, though.
"Only 8 per cent of SME
owners indicated they would be utilising virtual reality (VR) within
the next five years. This is
probably due to the fact that VR is still regarded by
many as a toy, with few real
benefits for a business.
"Technology vendors should
note that, while 70 per cent of SMEs are ready to embrace new technologies, the
only one they really seem enthusiastic about is IoT. This demonstrates that,
while the willingness is there, they will only embrace something new if it
makes sense for their business. Moreover, it also serves as a warning to technology
developers that, just because SMEs say they are ready to embrace new technology,
doesn't mean that they are willing to purchase any new technology."
SME Survey is the original and
largest representative survey since 2003 to measure the forces shaping SME
competitiveness in South Africa.
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