Even as the Kenyan economy recovers from the shocks of the coronavirus pandemic, 41 per cent of businesses in the Manufacturing and Distribution financial leaders have yet to record their digital Return on Investments (ROI).
Findings from the Manufacturing CFO 4.0 2021 Survey conducted by global software provider SYSPRO Africa and the Institute of Certified Public Accountants of Kenya (ICPAK) states that 31 per cent of leaders were yet to measure and investigate their business returns while 7 per cent were not sure if any returns were received.
Additionally, 51 per cent of businesses considered management of cash flow to be the biggest priority in order to expand their revenue model while 40 per cent felt that investment in research and development (R&D) was their top priority.
“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. The mentality however remains the same: Innovation is essential. Interestingly, as many as 41 per cent of the CFOs surveyed have yet to record their digital return on investments – with 7 per cent not being sure if any were received and 31 per cent still plan on investigating,” said Doug Hunter, Head of Customer and Ecosystem Enablement at SYSPRO Africa.
“The return on digital investment 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.”
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The survey which was conducted between September and November 2021 drew over 100 responses from financial leaders from larger enterprises operating in Kenya. It assessed sentiments on how manufacturing businesses were faring after an unprecedented and tumultuous 2020.
“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,” CEO of ICPAK, Edwin Makori disclosed.
Makori said innovation was seen as a likely solution to these hurdles, however, spending structures of Kenya’s manufacturing companies put the sector on an uneven playing field from a global perspective.
“Internationally, most companies were able to expand through the help of stimulus, but the survey findings showed 60 per cent of Kenyan businesses are aiming to support new initiatives through direct purchase, dwarfing other means such as 3rd party financiers (38%) and pay for user subscriptions (20%).”
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