Constantly changing business landscape, increasing market competition, shifting customer needs - these are some of the reasons why businesses, especially small and medium enterprises or SMEs go digital to boost productivity and profits. Indeed, those companies, which do not embark on the digitalisation wave, are likely to lose their competitiveness, and even see their businesses become redundant in the long run.
Going digital means using technology for a variety of business processes ranging from sourcing, invoicing and decision-making and payment to lead generation, market growth or expansion and partner collaboration.
SMEs in Singapore form the backbone of the country's economy, constituting almost half of its GDP. Currently, there are 180,000 SMEs, which constitute 99% of the country's companies.
Today it becomes more and more pressing for SMEs in Singapore to harness the opportunity for going digital. Here are the main reasons why:
The International Data Corporation forecasts that companies worldwide will have invested US$2.1 trillion in the use of digital transformation technologies by the year 2019. The areas that an SME can go digital span across customers, employees, operations, safety, infrastructure and innovation. The influence of digitalisation on a company’s revenues and ROI is non-negligible. For instance, digitising business processes, a small enterprise can see its manufacturing output increase, witness better supply chain efficiency and have better response times. In the area of safety and the protection of digital assets and customer data, the use of digital technology helps in detecting and defending against potential and existing threats, counter privacy breaches and even fraud losses.
According to a poll carried out by the United Overseas Bank in March, it was reported that more than 50% of SMEs recognised that the adoption of digital technology will help them save costs and decrease reliance on manpower. Indeed, small businesses can rely on software and cloud applications for accounting to make the process smoother. This will help accounting staff get more time to work on less mundane tasks and focus more on higher level accounting work. Small businesses can also turn to digital technology to have a greater visibility on inventory, ensuring that goods and materials are being managed in real-time.
Building brand awareness
Advertising typically requires top dollar. For an SME, the amount of money channelled to advertising can well be allocated to other functions that are deemed more important. With the rise of digital marketing, building a company's brand awareness appears to be an easier affair. As a first step, the company's website serves as a digital shop front to highlight its success stories, its star products and services, or its reviews and testimonials. This is complemented by the use of social media such as LinkedIn, Facebook or YouTube to boost the SME's online visibility. Backed by a sound strategy with tailored content and Search Engine Optimisation practices, digital marketing will allow the company to have a positive and lasting impression on its target audience, likely to translate into leads.
Maintaining customer relationships
When the target audience is aware of the company's products and services, it is necessary to maintain the relationship with both prospective and existing customers. Through various digital marketing channels, the SME can craft a compelling customer experience to meet and even exceed customer expectations. A successful digital customer engagement endeavour can be measured by metrics, such as the number of social media mentions, the likelihood to recommend the products or services to others or the quality of reviews and feedback.
Leveraging on government support
Earlier this year, the Singapore government announced a spending of S$80 million to help SMEs go digital and adapt to a world where technology is increasingly disrupting businesses. As part of this, SMEs Go Digital programme has been created aimed at helping some 200,000 businesses to be digitally ready by giving them step-by-step advice on the technologies to use at each stage of their digital journey. Concretely, the SMEs can benefit from the programme in three key ways.
Firstly, SMEs can get pre-approved technology solutions from the Infocomm Media Development Authority (IMDA) to enhance their business processes such as digital ordering and payment, supply chain optimisation or resource and billing management. Secondly, business owners can turn to the SME Digital Tech Hub to receive specialised advice in domains including data analytics, data protection, cyber security and the Internet of Things (IoT). There are also advanced technological solutions available.
Lastly, the programme also supports SMEs which seek to deliver new and emerging solutions with the possibility of mass adoption. The support comes in the form of potential collaboration with large corporations or connections to banks and professional services through IMDA.
A*STAR, the Agency for Science, Technology and Research, that spearheads Singapore's R&D work, will expand its efforts over the next four years to support 400 companies to carry out operations and tech road mapping, allowing SMEs to identify how technology can help them innovate and compete.