Across the world, small enterprises are described as the backbone of the economy because they are best positioned to create jobs, solve local challenges and spread wealth more evenly to larger populations, thereby reducing poverty levels. While there are numerous such businesses in Africa, they face a myriad challenges, including a lack of access to finances and limited capacity, which hinder their competitiveness.

SAP, a New York Stock Exchange-listed technology company that builds applications which help companies operate better, is tapping into the small and medium enterprise (SME) market in Africa.

According to Luis Murguia, senior vice president of ecosystem and channels for SAP in Europe, Middle East and Africa, SMEs will be the “sweet spot for the SAP innovation agenda” in Africa. Murguia says SMEs are more likely to adopt new technologies compared to large firms, adding that new technologies are crucial in helping small enterprises compete with larger businesses in a highly competitive and globalised market.

“Today, 18 of the 20 largest companies in Africa run on SAP. Our next frontier is to help SMEs to be as good as any company in the world,” says Murguia. “There are many global companies coming here. We can help local companies compete and be as good as the multinationals coming to Africa.”

The German multinational software corporation builds enterprise software to manage business operations and customer relations and has more than 238,000 customers across the globe. One of the companies using SAP’s solutions in East Africa is Bidco Oil Refineries, a manufacturer of edible oils, fats, soaps, margarine and detergents with units in Kenya, Uganda and Tanzania and its products marketed in 16 African countries. Bidco has adopted the SAP Enterprise Resource Planning solution to manage its business operations of 30 different brands and 2,100 employees.

Some of the countries in Africa where SAP sees “tremendous opportunity include the usual suspects: Nigeria, South Africa and Kenya”.

However, Murguia says there is a lot of action taking place in Côte d’Ivoire, Gabon, Senegal, Uganda, Tanzania, Ethiopia, Zambia and Zimbabwe.

“That is the beauty of Africa; it’s a whole continent that is rising. It’s like a football team. You don’t have just two or three good players, you have 11 great players that play really well. The continent is rising; it is not just Kenya or Nigeria or traditional South Africa. That is why this is exciting for us. The transformation is happening all over the place.”

Developing a skills pool

Human resources, Murguia says, is the biggest challenge for SAP as it seeks to grow its business in Africa.

“I would say that moving forward, the number one obstacle for our growth will be the availability of skilled talent for us,” says Murguia. “That is why we have a programme called Skills for Africa in which we are teaming up with 16 universities across the region and guaranteeing those students who go through the schools employment [at SAP]. We are helping to build new talent at minimal cost.”

While regulations, language and culture may be different in Africa’s diverse market of 54 countries, Murguia says SAP is optimistic about the success of its operations in Africa because of the similar needs companies on the continent face.

“We help companies to be best run. The reality is, every company doing manufacturing has to do effective inventories and every company needs to manage its workforce and have good relations with its customers. These are common problems and challenges that every company faces whether you are in Finland, in Gabon or in Thailand.”

Over the next five years SAP wants to build a strong and talented workforce in Africa’s IT sector. Murguia says SAP will partner with governments, universities and other relevant institutions in improving talent with the view of creating a “true information age for Africa”.

“We want to help African companies to be the best run in the world.”