How firms seek to innovate their way out of Covid storms


(L-R) Convener, Research and Development Committee ICPAK, Dr Elizabeth Kalunda, Dr Parmain Ole Narikae - Director General, Kenya Industrial Estate and Head of Customer and Ecosystem Enablement for SYSPRO Africa Doug Hunter during the report launch at Serena Hotel on Wednesday. PHOTO | FAUSTINE NGILA | NMG

Kenyan firms are banking on new technologies to recover from the shockwaves of the Covid-19 pandemic with many businesses seeing 2023 as the year when their fortunes will turn around.

This is according to new a new research which reveals that only seven percent of Kenyan businesses have already recovered from the shockwaves of the Covid-19 pandemic as of November 2021.

The inaugural Manufacturing CFO 4.0 2021 Survey conducted by global enterprise resource planning (ERP) software provider Syspro and the Institute of Certified Public Accountants of Kenya (ICPAK) shows that 36 percent of the more than 100 companies’ surveyed see 2023 to be the year when their businesses will stabilise.

The survey, conducted among Chief Financial Officers (CFOs) in Kenya’s manufacturing sector between September 1 and November 15 indicates that financial service providers eager to diversify largely favoured enterprise technologies, with 70 percent committing to taking on Business Intelligence, ERPs, enterprise risk management and related systems.

“Expectedly, the re-engineering of supply chains to improve business-to-business trading comes in at number two, with 58 percent earmarking its importance. This is a natural result of Kenya’s dependency on raw materials for food and beverage production.”

ERP is enjoying a positive response in Kenya, with 44 percent of those surveyed expressing a desire to invest and migrate. Warehouse automation trails just behind at 39 percent, and Business Intelligence at 38 percent.

E-commerce, managed services outsourcing, cybersecurity, CRM, cloud data migration, smart technologies, infrastructure and robotics follow at 37 percent, 32 percent, 29 percent, 27 percent, 27 percent, 26 percent, 21 percent and 13 percent respectively.

Speaking during the launch of the survey findings at Serena Hotel, Nairobi yesterday, Doug Hunter, head of the customer and ecosystem enablement at Syspro Africa noted that the pandemic has prompted the need for diversification and innovation in changing global market policies to help businesses adapt to the ‘new normal’ of the digitised world.

“While we have seen an expedited global move towards diversification particularly in digital transformation in the manufacturing and distribution sector, Kenya’s uptake has been much slower,” he said.

Interestingly, he added, as many as 41 percent of the CFOs surveyed have yet to record their digital return on investments – with 7 percent not sure if any were received and 31 percent still planning on investigating.

“The return on digital investments comes down to how companies deploy the technology they acquire. It is not how much you spend that matters; it is how you spend it. User experiences can also influence how technology is used and eventually affect the return on investment,” he remarked.

The situation, therefore, seems to be uncertain in the realm of digital returns on investment which explains its slower uptake across the country.

Chief executive of ICPAK, Edwin Makori said that during the pandemic, Kenyan businesses were eager to diversify largely in favour of uptake of enterprise technologies and the re-engineering of supply chains to improve business-to-business (B2B.

“While supply chain hurdles are nothing new in the global market, Kenya’s unique position as a primary goods manufacturer means it was hit harder. Innovation was seen as a likely solution to these hurdles. However, a look at the spending structures of Kenya’s manufacturing companies put the sector on an uneven playing field from a global perspective,” he said.

Mark Wilson, chief executive officer, Syspro EMEA region, said there is a need to have a workforce with the knowledge and skills to implement the relevant technologies.

“Access to the latest technology solutions and financial resources to acquire these technologies are indispensable. It is therefore clear that to grow the manufacturing sector, the level of automation must be increased, and appropriate technical skills must be developed in this time of innovation and adaption,” he notes.

Echoing Mr Wilson’s sentiments in a panel discussion, Ivy Kimori, head of finance at EABL emphasized the need to give employees platforms to reskill and upskill in the digital realm.

“In the next four years, skill set strategy will be critical in driving agility and efficiency in Kenya. We will have to use data to inform our future. And that future is now,” she said.

While smart technologies are unlikely to change operational fundamentals in Sub-Saharan Africa, as seen in North America and Europe, a new shift is set to start taking hold of management through enterprise technology systems.

“The future CFO needs to develop new skills and competencies, adopt technology as an enabler in order for them to remain relevant and their businesses,” said Mr Makori.

The survey findings revealed that while globally CFOs in the manufacturing sector showed insistence on rapid diversification as a Covid-19 countermeasure, Kenya’s ability to weather the storm through more traditional means proves that there is no one-size-fits-all solution.

“The world is moving into a digital space so companies must ready themselves for this new era of online agility through the encouragement of digital innovation and literacy. Change may happen slowly, but it must happen nonetheless to stay competitive,” said George Mokua, ICPAK chairperson.

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