Updates in technology and connectivity give organisations an avenue to do business better, but not everyone is embracing it.
It seems obvious: if a new technology is shown to improve business efficiency and profit, everyone will embrace it. Right? Wrong. The reality of this equation is that it does not depend on what is obvious, nor on clear benefits.
Many organisations know they could do better, increase productivity, grow turnover, and fatten the bottom line - if they use newer or better technology. The reality, however, is that they do not have the courage to make the jump. Rather than seeing it as a leap across the digital divide, they tend to view it as a step into the unknown, with a rocky chasm awaiting their fall.
Two categories of technology that have already made significant inroads into the business world are about to force a massive shift in this mindset. The first is fibre-to-the-home, which in many cases also means fibre-to-the-office. Having highly reliable, ultra-fast connectivity, with almost no limits on download capacity, seems to have a galvanising effect on companies.
A new research study, the 2019 State of South African Small Business report, by World Wide Worx for Xero accounting software, shows that businesses that use fibre are more open to embracing new technologies.
The second category, cloud computing, which allows applications and company documents to be accessed from anywhere, on any device, is one of these “new” technologies, but it is about to make a big impact on small business in its own right. World Wide Worx’s annual SME Survey showed last year that close to half of small and medium enterprises – employing from 2 to 200 staff – were using the cloud. However, the State of Small Business report, which looks only at those with up to 20 employees, indicated that fewer than 20% of smaller businesses were using the cloud.
The reason? It was too complicated. Of those using ADSL as a primary form of connectivity, 41% said the cloud was too complicated; of those who had made the shift to fibre, only 24% said it was too complicated.
But the cloud is about to come down to earth. In March, Microsoft opened its first Azure data centres in Africa, locating them in Johannesburg and Cape Town. The cloud is in effect serviced from data centres and, the closer they are to the customer, the better the experience and the lower the cost.
Along with the cloud, the cost of fibre is also about to come down. The biggest cost factor for fibre is the engineering demands of digging the trenches in which fibre conduits are laid. A new technique, called micro-trenching, which involves cutting a slot in the ground rather than digging deep trenches, dramatically increases the speed of laying down fibre and reduces the cost. Micro-trenching has begun in Soweto and Port Elizabeth, heralding the beginning of fibre roll-out to lower-income areas.
That, in turn, means more affordable and widespread fibre and, inevitably, higher appetite for cloud solutions. That alone could prove to be a major differentiator that, in turn, would make them significantly more competitive than those who do not embrace the cloud.
So, while businesses that have not made the leap may blame their inaction on fear of the unknown, it is in fact far more risky to stick to the old way of doing things.