There is no doubt that economic recovery will be buoyed by the success of our start-ups and small businesses. This is because, in Kenya, estimates suggest that between 80 and 98 percent of all businesses fall into the small- to medium-sized (SMB) category, highlighting the economic importance of these entrepreneurial enterprises.
During the pandemic, we learned that building resilience ensures business continuity in ever-changing market conditions – in which many SMBs are operating on tighter budgets. The required resilience is rooted in digital transformation. It allows businesses to streamline operations and become more agile in response to future, disruptive changes.
Kick-starting transformation through cloud adoption
On the digital transformation journey, cloud adoption is a critical first step toward resilience for SMBs. Beyond this first step, conducting business in the cloud in the long term is also the best bet for future-proofing operations in a global digital economy.
The global digital economy will be driven by the latest tech, from artificial intelligence and machine learning to the Internet of Things, which all use the cloud as a platform. As the Information Technology & Innovation Foundation notes, “cloud computing is integral to new IT-driven business developments”, which, in themselves, will stimulate the economy by driving new solutions to existing problems.
Cloud’s importance for enabling a necessary new way of doing business cannot be understated, and recent surveys demonstrate the tech’s ability to meet this need. The Future of Business Resilience report, released by Microsoft in 2020, notes that investing in the latest technology (which includes cloud computing) results in 20 to 30 percent higher workforce productivity, and 40 to 50 percent faster speed to market amongst some of the benefits.
Investing in such tech pre-emptively, instead of reactively (as was the case for many SMBs during the pandemic), also delivers 50 percent higher returns while speeding up digital transformation by 14 percent, according to the report. With economies having moved out of the initial ‘response’ phase to pandemic-driven market changes, now is the time to embrace proactive solutions for building sustainable businesses of the future.
Addressing infrastructure barriers to cloud adoption
SMBs who migrate services and operations to the cloud will reap rewards in improved productivity, faster speed to market, and a higher return on investment. However, driving uptake of beneficial cloud solutions in Kenya means meeting our country’s unique infrastructure needs to make connectivity accessible. Data centers, fibre and mobile wireless networks have struggled to provide affordable, consistent, high-speed internet connectivity to far-flung, underserved communities. This prompted Microsoft’s Airband initiative, which uses TV white spaces (unused broadband frequencies between TV channels) to deliver inclusive connectivity.
With initiatives like Airband addressing connectivity needs, Kenya’s SMBs can leverage the power of cloud-based tech, which removes other potential roadblocks to establishing and growing a small business. These barriers include the high cost of IT infrastructure, access to new technology, and the difficulty and investment needed to diversify the business to reach larger audiences.
Breaking down business-entry barriers
According to a Deloitte report, 93 percent of surveyed businesses from around the globe relied on the cloud to meet some or all of their AI needs. This is just one example of how the cloud enables innovation. It makes new tech that will create new solutions accessible, increasing a business’s opportunity to diversify as well. Allowing faster speed to market also creates a space for innovative thinking to flourish in, without the time constraints of a failed test weighing on business productivity.
The constant need to invest in system upgrades, to maintain security systems for example, are further costs saved by an SMB that has migrated to the cloud, where updates are automatically made by the cloud vendor. Continuous updates give peace of mind from a security standpoint, as does the automated backing up of data. If needed, data recovery from the cloud as opposed to an on-premises system is quicker, notes Columbus Global, which in turn spells less business downtime.
Fluctuating demand in a constantly evolving market puts pressure on an SMB’s finite resources. For small businesses, the ability to quickly and easily scale up or down on IT services is a cost-saving feature of the cloud that enables agility. This need for flexible scalability is why one Nairobi-based start-up, M-KOPA Solar, migrated its services to Microsoft Azure. Using cloud-based services like Microsoft’s Kaizala – a mobile productivity and messaging app – has allowed M-KOPA’s in-field sales team to redirect time spent on tasks to boost productivity. Thanks to the app, data compilation, which used to be a six- to eight-hour job for each team member, has been dramatically reduced to a task that takes less than a minute to do. This is how the cloud can streamline operations to free staff up for more innovative, productive tasks.
The need to sink huge investments into on-site IT infrastructure, along with hiring experienced staff to manage these new IT demands, is removed for a cloud-based operation. This makes start-up and continued growth easier, with budgets being channelled to other parts of the business. In fact, 70 percent of surveyed SMBs reported they were able to reinvest savings made (as a result of cloud migration) back into their business, with 82 percent of them having reported reduced business costs after their migration. SMBs are perfectly poised for easier cloud transitions from a cost than larger enterprises. This, notes the Flexera 2020 State of the Cloud Report, is due to the fact that SMBs generally run fewer workloads in the cloud.
The future will be driven by cloud-savvy SMBs
Recently surveyed tech-decision makers in Kenyan businesses indicated that they planned to increase cloud spending by 68 percent this year. This budget allocation alone demonstrates the critical role cloud-based technology will play in enabling inclusive economic recovery, with SMBs able to innovate far quicker and more securely at a much lower cost.
This is the enabling environment that we should be nurturing for SMBs and new start-ups alike if our economies are to successfully rebound post-pandemic.
Kendi Ntwiga is the Microsoft Country Manager for Kenya