Since 2020, the continent has seen meaningful investment in logistics infrastructure. The African Development Bank committed , while Africa50 deepened its role in financing trade-enabling infrastructure. Ports have been one of the clearest focal points. Nigeria鈥檚 Lekki Deep Sea Port is emerging as a serious regional node. South Africa鈥檚 Cape Town and Ngqura ports have posted notable improvements in performance after years of decline, while Transnet has clawed back some operational ground through better turnaround times and improved crane productivity.

Throughout Africa, governments have invested in ports, rail and trade corridors, and the Africa Continental Free Trade Area (AfCFTA) has started to turn the long-discussed idea of regional trade integration into something more tangible. In pockets across the continent, the results are faster cargo movement, stronger port performance, growing intra-African trade, and a more serious push toward localisation in sectors ranging from manufacturing to health.

AfCFTA notably helped push intra-African trade to $220.3 billion in 2024, , following a sharp jump in the number of countries actively trading under the agreement. However, it remains a work in progress instead of a finished shield, with tariff schedules, digital trade protocols, customs harmonisation and non-tariff barriers still being worked through.

Test of resilience

The question now is whether the progress made within the continent鈥檚 supply chains has delivered the resilience to withstand repeated shocks. The Red Sea crisis, now stretching into its third year, has already forced a major restructuring of Asia-Europe-Africa shipping. The near closure of the Strait of Hormuz has layered a second and more acute shock onto already strained global trade flows.

For African economies, the effect is being felt all at once through higher freight costs, longer lead times, elevated fuel prices, fertilizer disruption, and tighter access to trade finance.

Agriculture is especially exposed. A significant share of Africa鈥檚 fertilizer imports comes from Gulf producers, with East and Southern Africa particularly reliant on those flows. Disruption in Hormuz raises shipping costs, and threatens planting cycles, food production, and ultimately food security. Constricted fertilizer supply drives up costs, with the shock moving quickly from ports and tankers into farms, food prices, and household budgets.

Africa鈥檚 trade finance gap creates additional challenges. When lead times become unpredictable, businesses carry more buffer stock. Cost increases for fuel, freight and insurance drives demand for greater working capital. When banks remain cautious and access to formal trade finance is limited, especially for SMEs, resilience becomes something only the largest firms can afford.

This is why the next phase of supply chain resilience in Africa cannot be built only with cranes, roads, and policy frameworks, but with better visibility, greater efficiency, and improved decision-making.

A connected supply chain

Greater digitalisation is one of the most encouraging developments since the pandemic. Digital customs systems, single windows, electronic cargo tracking, and trade portals are reducing friction at the border.

In markets where customs and border processes have been digitised, . Digital trade facilitation has already shown what practical resilience looks like: less paperwork, better visibility, fewer delays, and more predictable movement of goods.

Digital platforms, AI-enabled forecasting, and scenario modelling have become more than technology talking points. In a volatile operating environment, end-to-end visibility is the difference between reacting late and acting early. Companies need a clearer view across suppliers, logistics partners, inventory, transport routes, and cost exposure. They need to test disruption scenarios before they happen, and model the impact of rerouting, delays, fuel spikes, or supplier failure in real time.

This is where embedded AI and better workflow orchestration are starting to matter. The real value is not automation for its own sake, but the ability to guide decisions in real time, coordinate actions across previously disconnected functions, and keep the wider value chain in sync as conditions shift. In practice, that means breaking down long-standing silos between planning, procurement, production, logistics, and finance so that businesses can respond faster, allocate resources more effectively, and maintain service levels under pressure.

In an , supply chain leaders cited advanced analytics and AI as their most important technology investment over the next three years. The top expected benefits of embedding AI into supply chain planning processes were improved decision-making, supplier selection, and inventory optimisation.

For African businesses, governments, and logistics operators, the lesson of 2026 is not that resilience investments have failed, but that more is needed to be done. Over the next five years, the continent鈥檚 supply chain challenges will go beyond simply building greater resilience to connecting what has been built into a system that can withstand a volatile, unpredictable world.

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According to a new report launched in partnership with research consultancy Earth Action, business that fail to scale their plastic data management could face corporate liabilities of more than $20-billion globally by 2030.

鈥淕overnments are implementing Extended Producer Responsibility (EPR) schemes, plastic taxes and reporting requirements to turn the tide on unchecked plastic production and use,鈥� says Director: Global Government Affairs & CSR Africa and Global Sustainability Lead for Africa at SAP. 鈥淏usinesses need to prepare for the incoming plastic legislation by enhancing their data management and compliance efforts to ensure they gain a clear, accurate picture of their plastic material flows and minimise the environmental impact of plastic products in their supply chains.鈥�

Global effort at minimising plastic waste

March 18th is , an annual initiative that aims to raise awareness of the importance of plastics recycling among business leaders and citizens alike. An attempt at a UN-led Global Plastic Treaty failed last year, with a new round of negotiations planned for August later this year. The proposed treaty includes a cap on plastic production, better management of plastic products and chemicals of concern, and financing to support implementation of the treaty in developing countries.

鈥淏usinesses wishing to mitigate risks regarding plastic products in their supply chain need to implement robust data management to improve compliance and advance their sustainability and circular economy goals,鈥� says Geness. 鈥淪outh African companies also face increasing pressure from government regulations to minimise plastic waste and enhance their recycling efforts, adding further pressure on business leaders.鈥�

South Africa鈥檚 require that companies increase the percentage of post-consumer recyclate to 75% by 2025, and 100% by 2027. Non-compliance can result in fines of up to R5-million or imprisonment for up to five years.

The African Circular Economy Alliance, founded by the UN Environment Programme, includes South Africa as a founding member. The country has also begun implementation of its National Waste Management Plan, which supports .

Technology as enabler

鈥淭echnology can play a leading role in supporting company efforts at circular economy initiatives, including improved management of plastics-related processes and compliance,鈥� says Geness. 鈥淒igital technologies can support waste management and monitoring processes, mitigate pollution, and enhance the efficiency and sustainability of the plastics value chain.鈥�

Due to the complexities of adhering to various regulations and the breadth of modern enterprises鈥� supply chains, Geness recommends implementing a technology platform such as SAP鈥檚 Responsible Design and Production (RDP) to help build a full, accurate picture of plastic material flows.

鈥淭he platform enables the aggregation of plastic and materiality data, helps to meet Extended Producer Responsibility requirements, and identify areas for potential improvement. This can save businesses millions in costs associated with compliance and administration, while unlocking opportunities for strengthening sustainability efforts.鈥�

Geness notes that emerging technologies can deliver circular economy benefits across the plastic lifecycle. 鈥淎I and IoT enhance efficiency during manufacturing, while blockchain ensures transparency throughout supply chains through immutable and transparent records of plastic materials. IoT-enabled smart packaging can engage consumers any providing recycling information and incentives, while tech-powered advanced recycling technologies can convert waste into valuable resources, closing the loop in circular economy efforts.鈥�

鈥淪outh African companies have an opportunity to go beyond compliance and leverage technology for immense sustainability and circular economy gains, to the benefit not only of our planet but also people and our shared future.鈥�

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In South Africa, ongoing challenges with port congestion and underperforming freight-rail systems have added further complexity and cost to supply chain operations. In response, companies are seeking tools and capabilities that reduce uncertainty in their supply chains and enable them to plan and respond more effectively in the face of disruption.

What does 2025 hold for under-fire supply chains? The introduction of powerful AI-powered technologies hold the promise of greater speed, efficiency and automation in supply chains, while greater use of connected technologies may empower business leaders with unprecedented data for improved decision-making.

This year, companies will need to adapt to and manage three key supply chain trends, namely:

Trend 1 – All-in on AI

2025 will see companies take significant strides toward building autonomous, AI-enabled supply chains. The goal: achieving greater efficiency and responsiveness in supply chain operations. As supply chains and associated processes become more complex, AI-enabled capabilities will become essential to help companies address issues as they emerge.

The use of digital twins – a virtual model of physical systems and processes – will become more prevalent, enabling companies to simulate scenarios, analyse performance in real time, and make data-driven decisions to optimise their supply chain operations.

Organisations that leverage AI to become more resilient will also gain an enhanced ability to sense, recognise, and react to disruptions. In fact, by ensuring AI is built-in, relevant and responsible, companies will be able to deliver measurable business outcomes even when disruptions feels like part of the daily routine.

Trend 2 – On the road to resilience

In the year ahead, expect to see greater adoption of anti-fragile supply chain strategies among companies as they navigate growing complexity and strive for greater adaptability. In 2024, extreme weather events significantly disrupted supply chains across the globe, a trend that is set to continue in 2025 thanks to the effects of climate change.

By implementing data-driven technologies such as AI and machine learning, companies can unlock real-time insights needed to identify emerging supply risks and proactively respond to potential disruptions.

In order to maintain operations and remain competitive, companies will need to prioritise robust contingency plans and real-time data visibility to navigate disruption. Expect the focus to shift from reactive crisis management to proactive, agile supply chain strategies that enable companies to anticipate and mitigate disruptions before they occur.

Trend 3 – Striving for sustainability

This year, transparency across supply chains will become an essential element to mitigating risks and reaching sustainability goals. Business leaders will prioritise visibility and transparency to gain real-time insights, allowing them to monitor operations and guard against risky practices.

New regulations will also demand greater insight into end-to-end supply chain processes.

The European Union’s Corporate Sustainability Due Diligence Directive, which builds on the Corporate Sustainability Reporting Directive, is听, and companies are already preparing this year. While the regulations are needed to drive greater sustainability throughout supply chains, it will require companies to make changes to processes and operations to remain compliant, which may add further complexity to supply chain processes.

Technology solutions can play a vital role by helping companies track their compliance and back up their sustainability claims. Improved visibility over supply chain processes will also help to manage risks and enhance collaboration among supply chain partners.

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, Director of Corporate Project Programme and Portfolio Management, City of Cape Town discusses with SmartProcurement how this maturity is achieved through the transformation of existing processes and empowering people with the necessary tools and technologies, fostering an environment of efficiency and effectiveness.

People: The Foundation of Organisational Maturity in SCM and Contract Management

The journey towards organisational maturity begins with people. Effective supply chain and contract management relies heavily on the engagement and competencies of the individuals involved. The City of Cape Town prioritises the development of its workforce through continuous training and professional development, with a clear focus on enhancing skills related to contract negotiation, compliance, and supplier relationship management. Clearly defined roles and responsibilities ensure that all stakeholders understand their contributions to supply chain and contract success. This emphasis on people includes rigorous training in document and data management, ensuring that processes are managed efficiently and fostering a collaborative environment across the organisation.

Processes: Streamlining for Efficiency and Quality

Streamlining processes is essential for achieving organisational maturity in SCM and contract management. The City of Cape Town has established comprehensive standards, guidelines, and procedures to ensure consistent, efficient, and high-quality performance across all supply chain and contract activities. These processes are designed with stringent checks and balances to minimise risks, enhance compliance, and prevent errors. By standardising supply chain and contract management processes, the City ensures that best practices are followed, leading to improved procurement outcomes, cost control, and contract performance.

Systems and Technology: Enhancing Workflow and Integration

Advanced systems and technology are critical enablers of efficient workflows in supply chain and contract management. The City utilises sophisticated management tools like 51风流PPM and CMS, which help enforce process compliance, automate routine tasks, and integrate various functions, including procurement, contract administration, finance, and data analytics. These technologies provide a robust framework that supports effective contract lifecycle management, supplier performance tracking, and real-time data analysis, thereby ensuring that SCM activities are aligned with the City鈥檚 strategic goals.

Data: The Core of Strategic Decision-Making

Data management is the backbone of informed decision-making in SCM and contract management. The City of Cape Town ensures that data is accurate, complete, and aligned with relevant standards, enabling predictive analysis, performance monitoring, and continuous improvement. By leveraging data analytics, the City gains valuable insights into supply chain trends, contract compliance, and performance metrics, which inform strategic decisions and resource allocation. Data-driven decision-making ensures that the supply chain and contract management functions are optimised to support the City鈥檚 broader strategic objectives.

The City of Cape Town鈥檚 approach to achieving organisational maturity in supply chain and contract management is comprehensive and interconnected, focused on building a cohesive, efficient, and effective environment. This strategy supports the City鈥檚 commitment to excellence in service delivery and its overarching strategic goals.

This article first appeared on .

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From managing extensive inventories to optimising supply chains and meeting customer demands, wholesalers must navigate a complex landscape.

, Managing Director of SEIDOR in South Africa, explains how Enterprise Resource Planning (ERP) systems offer a robust solution to these challenges, streamlining operations and enhancing efficiency.

Inventory management

One of the primary hurdles for wholesalers is maintaining optimal inventory levels.

de Leeuw says, 鈥淲ith ERP, wholesalers can avoid the costly pitfalls of overstocking, which ties up capital and storage resources, or understocking, which has the risk of losing sales and customer trust.鈥�

ERP systems use advanced analytics to predict demand trends and provide real-time inventory tracking.

This helps businesses maintain the right stock levels maintaining a balance that supports both operational efficiency and customer satisfaction.

A unified platform that streamlines supply chain operations is vital for the success of any wholesale business.

Delays or inefficiencies can lead to significant losses and disrupt customer relationships.

ERP systems integrate all aspects of supply chain management, from procurement to distribution making it easier to manage complex logistics, timely delivery of products, better coordination among suppliers, and reduced lead times.

de Leeuw emphasises, 鈥淏y leveraging ERP systems, wholesalers can enhance their customer service, leading to stronger, long-lasting relationships.鈥�

Customer relationships

The competitive wholesale market, demands strong customer relationships and the software helps wholesalers manage customer interactions more effectively by providing a comprehensive view of customer data.

This includes purchase histories, preferences, and feedback, enabling businesses to tailor their services and improve customer satisfaction.

Additionally, automated order processing and accurate delivery tracking foster trust and loyalty among customers.

Financial management and compliance

The industry鈥檚 complex financial landscape not only requires financial transparency and control, but also needs to ensure compliance and optimising financial performance.

With ERP, wholesalers can achieve greater financial management by automating accounting processes, generating detailed financial reports, and ensuring compliance with industry regulations.

This automation reduces the risk of errors and fraud, providing a clear and accurate financial overview that aids in strategic decision-making.

鈥淎ll businesses need to turn data into actionable insights, and wholesaling is no different,鈥� says de Leeuw.

Wholesalers can leverage these insights to identify trends, forecast demand, and make informed decisions which not only improves operational efficiency but also gives businesses a competitive edge.

The power of ERP technology

With operational efficiency comes growth where scalability and flexibility is needed to meet evolving demands and seize new opportunities without significant disruptions.

Whether it鈥檚 entering new markets, adding new product lines, or increasing customer bases, the software solution provides the flexibility to adapt and thrive in a dynamic business environment.

Heinrich de Leeuw concludes, 鈥� The wholesale industry鈥檚 challenges require innovative solutions to remain competitive and profitable.鈥�

鈥淓mbracing ERP technology is not just a strategic move; it鈥檚 essential for wholesalers aiming to thrive in today鈥檚 competitive landscape.鈥�

鈥淪treamlining operations, reducing costs, and improving overall business performance is how wholesalers position themselves for long-term success in a rapidly changing market.鈥�

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The use of an enterprise resource planning (ERP) solution is playing an important role in this transformation, providing wineries with the tools needed to optimise their processes and enhance their competitive edge.

Operational efficiency in the modern winery

Winemaking involves a complex series of steps, from vineyard management to distribution. offers a unified platform that integrates all aspects of the winery business, ensuring that each stage of production is optimised.

According to , Head of Marketing for Africa at SEIDOR, 鈥淥ur solution streamlines production workflows, from crush to cellar, with automated inventory management, batch tracking, and quality control鈥�.

This integration helps minimise waste and maximise efficiency, which is crucial for maintaining high-quality production standards.

Enhancing supply chain visibility

Supply chain visibility and flexibility are essential in the wine industry.

ERP provides end-to-end visibility, allowing wineries to track inventory levels, manage orders, and optimise logistics in real-time.

This capability ensures timely delivery and meets customer expectations, which is particularly important as consumer preferences and market conditions evolve like the growth of e-commerce and Direct-to-Consumer Sales.

Reaching a broader audience

The shift towards online sales is a significant trend in the wine industry.

SEIDOR鈥檚 solution integrates seamlessly with e-commerce platforms, empowering wineries to reach a broader audience.

Havenga highlights that this integration enables wineries to 鈥渟howcase their finest selections, offer tasting experiences, and engage customers through intuitive online storefronts鈥�.

Real-time analytics provide valuable insights into sales performance and customer trends, allowing wineries to tailor their strategies effectively.

Financial management and cost control

Effective financial management is critical for the success of any winery with real-time financial insights, helping wineries manage costs and make informed decisions.

This is particularly important in an industry where the cost of raw materials and transportation fluctuates.

Technology enables better budgeting and forecasting, ensuring that wineries can navigate economic uncertainties with confidence.

Compliance and quality assurance

Compliance with regulatory standards is a constant challenge for wineries so using technology to simplify compliance management with built-in tools to track and report on industry regulations, taxation, and labelling requirements makes things easy.

This functionality helps wineries stay ahead of regulatory changes, reducing the risk of non-compliance and allowing focus on quality and innovation rather than administration and compliance.

Embracing sustainability and innovation

Sustainability is becoming increasingly important for both producers and consumers. so tracking and reporting on sustainability metrics becomes crucial.

This aligns with the growing consumer demand for environmentally friendly products, helping wineries attract a younger, more conscientious customer base.

Additionally, the ERP system鈥檚 support for product innovation enables wineries to develop new offerings, such as organic and low-alcohol wines, which are gaining popularity in the market.

A digital transformation for future success

The adoption of technology is crucial for achieving operational excellence and sustainable growth in the wine industry.

By streamlining processes, enhancing supply chain visibility, leveraging e-commerce, and ensuring compliance, ERP empowers wineries to meet the challenges of the modern market head-on.

As Elaine Havenga aptly puts it, 鈥淔or wineries looking to thrive in the coming years, embracing digital innovation could be the key to uncorking new opportunities and achieving lasting success鈥�.

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LONDON, UK 鈥� 12 June, 2024 鈥� Ovaltine, the international wellbeing drinks business, has completed the first wave of its cloud migration to improve the efficiency and resiliency of its global operations, meet the evolving needs of its customer base and improve employee productivity.听

听With an existing multi-year digital transformation programme underway, the move to the cloud is helping Twinings Ovaltine enter a new phase of digital innovation and better respond to the demands of global customers.听听

听In moving seven different ERP platforms to the cloud, Twinings Ovaltine has unified its estate, and simultaneously addressed issues with siloed data which impacts collaboration and decision-making globally. Now, it has the platform to expand its product roadmap, be agile to customer trends and behaviours, and streamline operations for growth.听听

In partnership since 2011, Twinings Ovaltine has placed its trust in 51风流to reduce its overheads, optimise its ERP processes from procurement to HR, and empower its decision-making with better access to data. In completing its first migration to RISE with 51风流S/4HANA, Twinings Ovaltine now deploys an entire portfolio of 51风流solutions in , and , that provides digital transformation across the business.听听

听51风流delivers automated and simplified business processes for Twinings Ovaltine in the cloud, enhanced user experiences, real-time data and insights, and near real-time sales, inventory and process visibility. This allows Twinings Ovaltine to operate intelligently and at speed, while responding to the needs and behaviours of its customers and the wider market.听

听With 51风流Digital Supply Chain Management and Ariba, Twinings Ovaltine can modernise its supply chain and procurement operations, whilegaining greater visibility into wider value chains. This helps to protect the company against global supply chain disruption, and ensures the tea-maker can partner with suppliers that share similar values.听听听

Sandeep Seeripat, Global Business Transformation and Technology Officer, Twinings Ovaltine, said: 鈥�Twinings is sold in more than 100 countries worldwide and Ovaltine鈥檚 malted beverages and snacks are consumed throughout the day in countries across the globe. But what people want to drink, when and where is always evolving. We needed a platform that could scale with us, and help us go above and beyond to delight our customers. Moving our ERP to the cloud with RISE with 51风流is enabling us to do just that, setting the foundations for future growth and expansion, empowering us to make faster and more accurate decisions, and streamlining our global operations.鈥�听

Ryan Poggi, Managing Director, 51风流UK&I, said: 鈥淎s a longstanding 51风流customer and household name, we鈥檙e continuing to support Twinings Ovaltine as it looks to become a more resilient, customer-focused business. With the flexibility, speed and agility of the cloud, businesses like Twinings can intelligently adapt to meet changing consumer expectations, while also futureproofing itself against a fast-changing socio-economic landscape.鈥�听

听

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Who knew that too many lemons could sour the supply chain so quickly? More lemon doesn鈥檛 seem as problematic as a lemon shortage, does it? However, the situation serves as a reminder that an abundance of products can present just as many challenges as a shortage.

The bitter taste of waste

When life gives you lemons or any other produce, it’s usually a good thing – unless you’re a farmer facing a surplus of lemons that nobody wants. Because the overproduction has led to a mismatch with consumer demand. With the surplus in production, farmers are left with an excess of products that are not being sold, which leads to prices dropping faster than a lemon falling off a tree.

According to the Spanish agricultural union COAG, around 400,000 tons – which is about 27% of the planned production- of lemons cannot be sold and will go to waste, and loss is expected to exceed 120 million euros ($129 million).

As lemon prices do not cover production costs, it results in diminished profits and potential financial strain in the main cultivation areas, which even leads farmers to abandon farms and the uprooting of trees.

This has already raised听听about environmental impact as valuable resources such as water, labor, and land are wasted. Additionally, the situation highlights the need for more sustainable practices in agriculture, such as crop diversification, efficient water usage, and responsible waste management.

The food and beverage industry may find themselves with excess inventory that could go to waste if not used in a timely manner. Similarly, the cosmetic and pharmaceutical sectors incorporate lemons in their products for their positive attributes, potentially impacting their sustainable production and risking harm to their companies’ sustainability objectives or brand reputation in the eyes of consumers.

The bad taste of logistics costs

The surplus in lemon production may kickstart the inventory and transportation challenges. The excessive products take up the valuable warehouse space where more sellable stock could have been stored. This may affect the transportation and storage costs, as distributors are forced to find creative solutions to accommodate the overflow of lemons. This could also lead the lemons to expire and lose their freshness, which increases waste, inflates costs, and decreases the profitability for producers.

Squeezing fresh solutions

To avoid being caught off guard by potential disruptions such as overproduction or waste, supply chains must be well managed and carefully planned, and visibility is crucial in achieving this.

On a recent episode of听, Koray K枚se from Everstream emphasized the significance of visibility as the cornerstone of effective supply chain management.

鈥樷�楨verything starts with visibility,鈥� said K枚se. 鈥淭hat’s the foundation of knowing and then turning that knowledge into an agile operation that can react quickly to incidents that are comprehensively reported in detail, where you can analyze, specifically, the prioritization of that incident in your value chain.鈥�

Modern supply chain requires modern technologies to help turn risks into opportunities. That is where听听comes into a play to help optimize your risk-resilient and sustainable supply chain.

Richard Howells, VP of Thought Leadership at SAP’s ERP, Finance, and Supply Chain Solutions, stresses the significance of visibility in a recent听听on the role of听.

“Data visualization and modeling and intelligent summarization came in joint second to help supply chains and operations make sense of data quickly and in a people-intuitive way,” said Howells.

Employing such supply chain planning tools, such as听听and听听systems, can greatly benefit farmers, wholesalers, and retailers and help in accurately predicting demand and adjusting production accordingly. By utilizing these tools, stakeholders can ensure a more sustainable and risk resilient supply chains for their production processes.

By reducing waste and environmental impact, companies can improve their sustainability efforts and maintain a positive brand reputation. This not only leads to cost savings and improved operational efficiency but also addresses excess inventory in a sustainable and responsible manner.

By acknowledging the necessary tools for the supply chains and implementing the right tools to work together to find innovative solutions that promote efficiency, reduce waste, and support sustainable food system, we can mitigate the negative impacts of overproduction and waste and ensure more resilient and sustainable future for the future generations.

鈥痶o learn more about the importance of AI in Supply Chain.

This article first appeared in .

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By leveraging AI technologies, SMEs can achieve performance and innovation boosts across multiple areas of the business, from financial management to sales and marketing to human capital management and product development.

The global AI market is expected to grow from $208-billion in 2023 . For SMEs, the growth of AI holds huge promise: one study found that .

However, AI is still in its relative infancy. While technology providers have made huge strides in the power and quality of their AI tools, the technology has not yet reached its full potential and can be prone to error if not deployed in an optimised environment.

The intelligent SME

The adoption of AI forms part of a broader shift among businesses to establish intelligent enterprise capabilities. An intelligent enterprise consistently applies advanced technologies and best practices听within agile, integrated business processes.

For SMEs, this means establishing a powerful core that links departments, integrates business processes, connects data, and embeds intelligence to accelerate innovation and growth. And AI is the latest essential technology in the intelligent enterprise mix.

However, a successful deployment of AI in an SME requires accurate, relevant and reliable data. The better the data, the better the AI-generated outcomes.

For example, deploying AI to make decisions based on unstructured third-party data – such as social media posts by potential customers – can lead to inaccurate or downright incorrect outcomes. In contrast, deploying AI to trusted business systems, such as an SME’s enterprise resource planning solution, means the algorithm is basing its recommendations and outcomes on data that is accurate, up-to-date, reliable and relevant, leading to higher-quality outcomes that can truly drive the business forward.

Practical applications of AI

Despite the technology still being in its relative infancy, AI holds huge potential to SMEs. Unlocking its value will be a critical aspect of the success of any business in the coming years.

For SMEs, the journey to value-generating AI for business really starts with a digital transformation process that establishes a single source of truth for all business data. Here, enterprise resource planning (ERP) systems are key: cloud ERP systems enable greater speed and predictability across all of an SME’s core business processes and can scale as the business grows or expands to new markets.

With the core ERP in place, SMEs can choose to deploy AI to a wide range of business processes to accelerate daily tasks, minimise human error, cut costs and boost innovation, including:

Human Capital Management: Generative AI integrated with human capital management software can streamline content creation and provide access to in-depth analytics that provide valuable insights into the talent management and hiring process.

Finance: SMEs can increase the performance of their finance operations by leveraging AI for expense management, invoicing, auditing, financial forecasting and payments. One of the biggest challenges for SMEs is managing cash flow. AI can reduce the sales outstanding days with intelligent invoice matching to improve cash flow and keep the balance sheet healthy.

Supply Chain: In the wake of ongoing supply chain challenges, SMEs may want to leverage AI to better predict customer demand and increase production efficiency with intelligent auto-dispatching. In the manufacturing sector, SMEs can mitigate risk with preventive maintenance guided by AI that is integrated to the core production systems.

Procurement: Buying and procurement can become more agile, with AI simplifying the buying process while maintaining compliance with various internal and external controls. The use of AI can also automate the creation of sourcing events, drawing on past successes and real-time business information to provide an intuitive automated sourcing capability.

Sales & Marketing: Considering the importance of customer engagement and CX in the sales process, SMEs may also want to leverage AI for hyper-personalised product recommendations across multiple channels, with AI predicting customer behaviour to enable companies to minimise costly customer churn.

Innovation: Finally, SMEs can accelerate their innovation efforts by deploying and running AI models at scale without compromising data privacy. By leveraging the work by leading technology providers such as SAP, SMEs can also build AI into their core business applications with a library of pretrained models, accelerating the time-to-value of new innovation projects.

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The confluence of several disruptive factors 鈥� geopolitical conflict, rising inflation, economic uncertainty, increased regulatory pressure, and last, but by no means least, the impact of new technologies 鈥� will undoubtedly test leaders to the limit in the year to come.

Speaking with business leaders across the region, several common themes have emerged. From the urgent need to build greater resilience and reduce risk, to leveraging the power of AI and improving sustainability efforts while ensuring that investments drive value both now, and in the future – these are the interconnected trends that European business leaders will confront in 2024:

Trend 1: De-risking the enterprise

In an environment defined by volatility and geopolitical uncertainty, business leaders face increased risk across their operations. This is driving an acute need for operational and technological interventions to reduce risk and bring stability to the enterprise, while still safeguarding agility.

Europe’s regulatory landscape is becoming increasingly complex as policymakers try to keep pace with the disruptive impact of technology. The , for example, will establish strict rules and standards around the development and application of AI in business contexts. This includes guardrails for general purpose AI; a total ban on AI as it relates to citizens’ rights and democratic processes; and the right for consumers to launch complaints and demand meaningful explanations regarding decisions based on AI systems.

In addition, a wave of new regulations in trade and customs throughout the region will add compliance pressure on companies already reeling from ongoing challenges related to various elements of their supply chains. From 1 January this year, companies wishing to do business in Europe are subject to the EU Emissions Trading System that aims to establish Europe as the first climate-neutral continent; a truly admirable objective.

All this complexity requires extensive investment in sophisticated digital tools to provide greater visibility over the climate impact of the end-to-end supply chain, which brings me to my next point:

Trend 2: Supply chain resilience is not the same as agility

As if the continued ripple effects of the pandemic on global supply chains didn’t pose enough of a challenge over the last couple of years, business leaders have also had to contend with the ongoing geopolitical conflict. Be it re-routing of ships to avoid the Suez Canal, high-tech component shortages, or commodity price volatility on everything from food to energy – these factors, among others, create immense supply chain instability.

In response, forward-looking companies are seeking greater agility to respond to supply chain threats. A recent highlights the importance of technology in maximizing organizations’ chances at success with maintaining stable supply chains.

One of the key objectives of digital transformation within supply chains is the ability to improve end-to-end visibility. However, found that 43% of global organizations have limited to no visibility over the performance of their tier one suppliers 鈥� an astounding statistic.

Greater visibility over supply chain processes clearly also supports wider sustainability efforts. The same KPMG study found that only 5% of supply chain emissions stem from direct manufacturing; emissions from the broader supply chain are five to ten times greater.

Digital platforms can significantly improve enterprises’ ability to collect emission data and set appropriate targets for key suppliers to collectively drive improved sustainability outcomes throughout the supply chain.

In addition, organizations will increasingly leverage the power of AI to improve supply chain management, logistics, and procurement. In fact, half of supply chain organizations are expected to invest in applications that in the year ahead.

Trend 3: Unlocking AI’s true business value

On the topic of AI, the year ahead will undoubtedly see more companies leverage Generative AI and AI for business to drive innovation, efficiency, and productivity.

Unsurprisingly, that Trust, Risk and Security Management in AI Models will be one of the leading tech themes for the year ahead, built on advances in model monitoring, AI application security, and privacy.

However, European businesses may be more hesitant to unleash AI on their operations. found that business leaders in EMEA are far less convinced that their customers prefer to interact with AI models than their North American peers.

And considering the EU legislation already mentioned, European companies looking to incorporate AI in their business models or operating environments will need to build their use case with both compliance and privacy front and centre.

However, companies can unquestionably accelerate the value from their AI deployments by leveraging AI that is purpose built for business. Large cloud and software providers, like SAP, have invested significantly in building responsible AI into their core products. This means that customers can immediately benefit and unlock business value from their software investments.

2024 will be a pivotal year for many business leaders across EMEA 鈥� while daunting in many respects, also an incredibly exciting time to lead.

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