This week, research firm IDC unpacked a white paper in collaboration with Microsoft South Africa, specifically looking at enterprise resource planning (ERP) as it relates to small-to-medium-sized enterprises (SMEs).

The paper, titled Taking The Fast Track To ERP Innovation Is Essential For SMEs, highlights the fact that these organisations faced increased pressure to transform their operations with agility and speed to keep up with the pace of change and adapt to business, industry and market challenges, many of which have been the result of the pandemic.

As far as ERP solutions are concerned, IDC says SMEs need a flexible, integrated, scalable and end-to-end offering to connect their financials, sales, service, supply chain, stock management and operations.

This, in turn, should help streamline business processes and improve customer service, according to the research firm.

“However, the whitepaper found a mismatch between business priorities and the outcomes of current solutions. Business priorities centre around customers, skills, and brand, with 87 percent of enterprise application decision-makers saying that attracting and retaining customers is a top priority and 81 percent pinpointing development of talent as well as reputation and brand awareness as key concerns,” notes Jon Tullett, senior research manager at IDC Sub-Saharan Africa.

IDC’s whitepaper also highlights the fact that many SMEs are struggling with ERP products, which are taking too long to adapt to their needs.

“28 percent found solutions to be too slow, and 25 percent said it failed to deliver return on investment (ROI). Lengthy, costly and complex deployment and implementation processes, and disruption to the business were also identified as challenges, with 21 percent saying implementation took too long and 15 percent saying ERP applications were unreliable and error-prone,” adds the research firm.

This is where Microsoft is hoping to play a role, with its Dynamic 365 Business Central in particular getting a mention as far as delivering on the needs of SMEs and addressing their current pain points.

“Changing business, customer, partner and employee expectations and needs mean that organisations need a well-integrated and streamlined business management and enterprise application ecosystem – and the new generation of ERP solutions provide the integration, automation and security delivered by cloud-based capabilities,” emphasises Karin Jones, director for Business Applications at Microsoft South Africa.

With cloud-based solution uptake being strong in recent years not only within the SME sector, but across the board too, ERP solutions will have a key role to play moving forward, according to IDC.

“South Africa’s growing adoption of cloud is also marked by an expanding middle class of businesses; SMEs accounted for 16.2% of software revenues in South Africa in 2019, a share which is forecast to grow to 18.5% of a market worth more than $3.2 billion in 2024. Most of that growth, particularly in SME customers, will be driven by cloud adoption of enterprise applications,” he concludes.

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