Despite South Africa’s reputation for entrepreneurial depth, many small and medium enterprises (SMEs) remain slow to adopt digital tools, limiting their growth potential. The country counts approximately 3 million SMEs, of which over 2.5 million are micro-enterprises, many operating informally. By late 2022, nearly 1.75 million informal businesses and around 710,000 formal small businesses were registered.
Jerry Diender (Elemental COO) and Angelo Zanetti (Elemental Co-CEO) | image supplied
While technology adoption can significantly boost productivity and efficiency, many SMEs face challenges in translating digital intent into practical capability.
According to Angelo Zanetti, Co-CEO of Cape Town-based software development agency Elemental, “Everyone’s talking about AI, rightly so, but for most businesses the real unlock is clear processes, better data, and systems built around how the business actually works.”
Jerry Diender, COO of Elemental, added that “digitisation isn’t buying software for the sake of it. Start with clarity. Look at which customer journeys matter, which bottlenecks cost you time and money. When strategy leads and tech follows, growth sticks.”
The cost of standing still
Customer behaviour has shifted, with online retail projected to exceed R130bn in South Africa this year. Nine in ten SMEs now accept digital payments, demonstrating that adoption accelerates once capabilities are understood.
Zanetti and Diender note that businesses that delay digitisation risk lost data, manual inefficiencies, and customer drop-off, while competitors become faster and more visible.
Practical steps for digital integration
Zanetti and Diender recommend that SMEs approach digitisation in stages:
- Map one key process end-to-end to identify delays and inefficiencies.
- Implement off-the-shelf solutions where appropriate, reserving custom development for unique workflows.
- Ensure staff are trained and documentation is available to maintain autonomy over systems.
- Measure critical metrics through simple dashboards to guide decision-making.
A path forward
Zanetti and Diender emphasise that South African SMEs are resourceful, and incremental digital adoption can improve efficiency, customer engagement, and competitiveness.
“Start small, learn fast, measure outsets, and scale what works,” they advise, noting that thoughtful adoption can turn technology into a reliable engine for growth.
