SYSPRO, an enterprise resource planning software provider and the Institute of Certified Public Accountants of Kenya (ICPAK) have released findings from a recent joint survey. The survey was conducted among Chief Financial Officers (CFOs) in Kenya’s Manufacturing Sector.
The survey was conducted across various manufacturing and distribution companies in Kenya, drawing over 100 responses from financial leaders predominantly from larger enterprises.
Findings from the survey showed only 7% of the businesses surveyed as expressing an “already recovered” trading environment. 36% of the companies’ surveyed saw 2023 and beyond to be the year in which their businesses will stabilize.
The survey findings also showed that unlike global financial leaders who have pushed for expansion through continued expenditure, Kenya has placed its faith in older stock.
Most Kenyan manufacturing companies also continued to utilize traditional cost-cutting as their main contingency measure, with the curbing of discretionary expenditure being most prominent at 70.93%. This is followed by debt collection at 40.70%.
Additionally, 51% of the CFOs surveyed expressed that managing cashflow remains the biggest business priority for 2022. On the other hand, 40% felt investing in research and development (R&D) and new products and services are not far behind.
In addressing returns on investment on digital investments, 30% of manufacturing companies reported receiving returns and 28% not receiving any returns. This indicates a slump in digital investments, considering its slower uptake across the country.
In terms of 2022 prospects, the report found that while SMART technologies are unlikely to shift operational fundamentals, a new shift is expected to affect management through enterprise technology systems and MRP.
Speaking at the launch of the survey findings, Doug Hunter, Head of Customer and Ecosystem Enablement at SYSPRO Africa noted, “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% of the CFOs surveyed have yet to record their digital return on investments. 7% are not sure if any were received and 31% still planning on investigating.”
Also speaking at the launch, ICPAK CEO Edwin Makori said, “We saw businesses eager to diversify largely favor uptake of enterprise technologies and expectedly, the re-engineering of supply chains to improve business-to-business (B2B) trading come in a close second. 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. The survey findings showed 60% 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%).”