CHAPTER 4 – EMPIRICAL FINDINGS
Building on the methodology presented in the previous chapter, this chapter outlines the data which we collected in the field. It presents the data which the research acquired from the surveys in response to the research questions as presented in the data gathering tools, namely: online survey based on the research questionnaire, the telephonic follow up interviews, and the document analysis referenced to in the literature review section of this thesis.
This chapter synthesises the large volume of data gathered into comprehensible information grouped and categorised according to the thematic sections of relevance to the research problem and questions. This chapter also synthesises and analyses the data obtained during the research process and scholarly literature played an important part in setting the base on which to start the project. The data is analysed and presented according to sections and categories as obtained from the literature reviewed and according to the research questionnaire. The Technology, Organisations and Environmental (TOE) Model is an anchor of the research instrument and forms the basis in which data has been categorised and presented. This chapter reviews and analyses the data according to the following thematic areas: technology adoption; business threat of survival, change in employment; and lastly the impact of business environment between 2015 and 2016, in no particular order.
Quantitative results include the descriptive statistics pertaining to the questionnaires used. Reliability on key questions is measured using Cronbach’s alpha as was discussed in the foregoing chapter.
Interpretation of results
In this section, the results pertaining to the quantitative study are reported, starting with a report on the demographics of those who completed the question.
Profile of participants by industry
Firms were randomly selected within the study focus sectors, after controlling for key variables including: panellists employed fewer than 200 employees; turnover of less than R26 million per annum; and registered businesses in South Africa in line with SARS and Companies Intellectual Property Commission (CIPC).
Figure 4.1 shows that in total 265 panellists answered the questionnaires. Of the total, 10% generated less than two hundred thousand of revenue per annum, 26% generated less than three million rand per annum and 64% generated between thirteen and twenty-six million rand of annual revenue.
Change in turnover is a good measure of progress made against the National Development Plan as businesses are needed to assist in driving economic growth of the country. This study needed to see how these businesses performed between 2015 and 2016, and in figure 4.5 the findings showed that 43% of the panellists did not grow during this period with 19% shrinking and 24% being stagnant. 58% of the panellists showed growth and of the ones showing growth, 36% are growing moderately and 22% have high growth.
Descriptive statistics pertaining to SME business challenges
Descriptive statistics are reported per question. With each question, reliability information in the form of Cronbach’s alpha coefficient is presented which is used as a measure of internal consistency or reliability of a psychometric instrument. The study measured how well a set of variables or items measure a single, one-dimensional latent aspect of individuals.
The research problem statement uncovered through extensive review of literature review highlights that many small businesses in South Africa do not make it past the second year of trading with failure rates as high as 63% (Roberts, 2010). In order to understand what is holding growth back – or promoting it – this study interrogates SMEs’ views on the business environment. Business does not operate in a vacuum, and the effectiveness and efficiency of such things as the quality of legislation, markets and institutions can be decisive for firms’ performance, and for the performance of the economy.
To test this statistically, panellists were asked whether it was easier to operate business in South Africa compared to the previous year. The broad impression of the business environment held by the panellists was not positive. As shown in figure 4.8, 67% said that it became harder to operate a business in South Africa in 2015. Only 4% said it had become easier. 29% believed it had not changed
SME key business challenges
Literature highlighted common factors that contribute to SME business failure which are government red tape, lack of skill, labour regulations, lack of innovation, impact of crime and access to funding. The panel was asked to identify chief impediments to their business growth in the last year. 61% of the panellists feel that government red tape/bureaucracy has had big impact in hindering growth for the past year, followed by labour legislation at 54%, and lack of skill at 46% as shown in table 4.3. During the analysis stage, reliability of data was looked at using Cronbach‘s alpha.
The picture presented in Table 4.3 is concerning as South African firms are operating under adverse circumstances. These challenges distract firms from their core business, push up the costs of operations and may overwhelm weaker firms entirely. Differences are evident in the impediments identified by firms in different sectors. Government bureaucracy is the dominant concern for firms in manufacturing, business services, and tourism firms.
Regulatory compliance costs have long been recognised internationally as a burden on business, both for individual firms and for the economies within which they operate. Heavy compliance burdens, and ineptly administered regulations, add to the costs of doing business, and constrict firms’ ability to grow. Cumulatively, they hinder national economic growth (SBP Growth Index; 2014). The need for regulatory reform to create a simpler, more efficient business environment has been a stated government commitment for decades. The 1995 White Paper on Small Business, for example, put it succinctly: “Inappropriate or unduly restrictive legislative and regulatory conditions are often viewed as critical constraints on the access of small enterprises into the business sector and as obstacles to their growth.” More recently, the NDP − and New Growth Path − also recognise the need for an improved regulatory environment.
Impact of Red tape
To understand the direction that the regulatory environment is taking, the panel was asked to assess whether the red tape burden had increased, decreased or stayed the same over the preceding year. The outcome as shown in figure 4.9 is that a clear majority of SMEs (57%) believe that the red tape burden has increased, with 1% saying that it has remained constant.
Could this be due to the non-compliance of employees to this regulation or rather lack of enforcement from the government in ensuring compliance with these regulations? This was a problem for manufacturers and business services. Several panellists noted that while SARS can efficiently collect revenue, it is less efficient at paying refunds or resolving problems. Difficulties in obtaining tax clearance certificates remained a source of frustration. Challenges associated with SARS have emerged as a key concern in every round of the annual survey. A common theme is the need for SARS to reorient its approach from one that is punishment-based to one that recognises the specific challenges that it imposes on small businesses, and work constructively with this sector to better business success. Labour – including problems relating to bargaining councils, the CCMA, Workman’s Compensation and so on – was also most frequently cited issues.
Business concerns regarding the compliance burden related not only to the volume of regulatory requirements and poor administration, but also to the frequency of regulatory change. Panellists were asked if they believed they knew all the regulations they were expected to comply with. Just under three firms in five were confident that they did. In figure 4.10, we see that 26% of the panellist state that maybe they know all regulations they need to comply with and a disappointing 17% said they do not know what regulations they should comply with in their business.
LIST OF FIGURES
LIST OF TABLES
LIST OF ABBREVIATIONS/ACRONYMS
STATEMENT OF ORIGINAL AUTHORSHIP
CHAPTER 1 – INTRODUCTION
1.2 Problem statement
1.3 Context of the problem
1.4 Relevance of Cloud Computing to SME challenges
1.5 Research Question
1.6 Research purpose and objectives
1.7 Limitations and delimitations of the Study
CHAPTER 2 – LITERATURE REVIEW .
2.2 Theoretical considerations
2.3 Cloud Computing Defined
2.4 Small and Medium Enterprise Market Defined
CHAPTER 3 – RESEARCH DESIGN AND METHODOLOGY
3.2 Research Process
3.3 Research philosophy and theoretical perspectives
3.4 Research approach
3.5 Research methodology
3.6 Time horizons
3.7 Data collection methods
3.8 Sampling techniques and methods
3.9 The qualitative analysis
3.10 The quantitative analysis
3.11 Limitations of the study
3.12 Ethical considerations
3.13 Validity: Exploratory factor analysis to test construct validity
3.14 Reliability (Construct reliability) .
CHAPTER 4 – EMPIRICAL FINDINGS
4.2 Interpretation of results
4.3 Descriptive statistics pertaining to SME business challenges
4.4 SME key business challenges
4.6 Technology adoption
4.7 Presenting the findings
4.8 Resulting framework from the analysis
4.9 Discussion of the Cloud adoption framework
4.10 Chapter summary
CHAPTER 5 – CONCLUSIONS AND RECOMMENDATIONS
5.3 Contributions to theory
5.4 Conclusions of the study
5.5 Recommendations of the study
5.6 Limitations of research
5.7 Challenges faced during the study
5.8 Directions of future researc
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THE ROLE OF CLOUD COMPUTING IN ADDRESSING SMALL, MEDIUM ENTERPRISE CHALLENGES IN SOUTH AFRICA