Strong government support in a small concrete forest certainly goes a longer way for small- and medium- sized enterprises operating there…
Small- and medium- sized enterprises (SMEs) across the globe continue to struggle with digital transformation and adapting to the new norms of remote-working and heightened customer expectations.
Are SMEs in Singapore better off than SMEs in other countries, given the little nation’s strong tech infrastructure and necessarily pro-business stance?
Only recently, Singapore’s tech association, SGTech had launched a job and skills guide to help its 1,000+ member SMEs to leverage generative AI (GenAI), tackle cyber talent shortages and continual skill upgrading to run lean and agile.
DigiconAsia.net interviewed SGTech’s chair, Digitalization Steering Committee, Nicholas Lee, to find out more.
DigiconAsia: Where do SMEs in Singapore stand when it comes to digital transformation (DX)?
Nicholas Lee (NL): In Singapore, SMEs are actively embracing DX, with the technology adoption rate soaring from 74% in 2018 to 94% in 2022 (Source: The Straits Times).
Recognizing the pivotal role of technology, SMEs here are leveraging it for operational efficiency, competitive advantage, and meeting evolving customer expectations. Other push factors include:
- Global market demands and conditions
- black swan events like the COVID-19 pandemic
- government initiatives
- compliance/adherence with industry standards
- access to funding
While significant strides have been made, strategic initiatives are crucial to further propel the digitalization of diverse sectors.
What are the challenges? While SME owners here may be adept at using technology in their personal lives, the challenges in adopting technology at an organization level often stem from concerns such as implementation costs, workforce training, and the perceived complexity of integrating new systems.
I believe that it may be due to the overwhelming number of options available, causing confusion on the best way forward. It is also the fear of change, and the uncertainty about how digitalization fits with their business vision.
DX is not a one-size-fits-all solution. There are many ways to achieve it, and the best way for any business is unique to its own circumstances. It starts with strategy, but it does not end there. It also encompasses solutions and skills to support the execution of that strategy. It is about being proactive, not reactive. It is about fostering innovation and being forward-thinking. This is what SMEs in Singapore are being educated about.
DigiconAsia: What is your view on the current post-COVID phase, where SME owners hassled by inflation and supply chain issues may be tempted to put technology as the least priority?
NL: SMEs in Singapore must recognize that technology is an investment in resilience and long-term sustainability. A balanced approach to budget allocation, with a strategic focus on technology, is essential for navigating the evolving business landscape.
The concept of a balanced approach to budget allocation in DX involves strategically distributing financial resources across various aspects of the transformation process to maximize overall effectiveness and ensure comprehensive outcomes. This approach recognizes that digitalization is a multi-faceted journey that encompasses technology, people, processes, and infrastructure.
Therefore, SMEs here should and do look into their business model which is often the source of truth to discern what their strategic priorities for tech investments are:
- their revenue generating channels
- operational efficiency level
- resource optimization capabilities
- risk management levels
- competitive positioning
- ecosystem collaboration
- current technological capabilities/digital maturity level
These factors can help Singapore SMEs to identify their strengths, weakness, opportunities and threats, in order to strategically plan and implement DX initiatives that align with their capabilities.
This assessment ensures a phased and effective adoption of technology, maximizing the benefits and minimizing potential disruptions to operations. Ultimately, considering digital maturity empowers SMEs in Singapore to navigate the transformation journey more efficiently and sustainably.
DigiconAsia: As the trade association for Singapore’s tech industry, what are SGTECH’s initiatives to help SMEs navigate DX this year and beyond?
NL: We plan to foster effective collaboration between SMEs and small tech companies to produce cost-effective digital solutions and targeted marketing strategies. Specifically:
- Establishing networking platforms, supported by government incentives, to foster mutually beneficial relationships, shaping a thriving ecosystem.
- To ensure successful collaboration, we shall be ensuring that both SMEs and solution providers prioritize understanding each other’s visions. SMEs should articulate business goals and challenges, while solution providers tailor solutions to align with those visions.
- The fruits of strong collaborations need to involve the following:
- customized and scalable solutions
- flexible pricing models
- provision of sufficient education and training
- transparent communication
- participation in collaborative spaces
- prompt and expedited leveraging of government incentives collectively
- an emphasis on long-term relationships
All these collaboration priorities and guardrails ensure ongoing support and adaptation to evolving needs, ultimately fostering innovation, efficiency, and sustainable growth.
Our Digital Transformation SME program has been empowering small businesses in Singapore to navigate the complexities of DX, by providing tailored support, resources, and training. It has enabled small businesses in Singapore to embrace technology, enhance their competitiveness, and adapt to the evolving business landscape to foster a culture of innovation and resilience.
This year, with help from continued government support, evolving technologies, and a deeper understanding of the benefits of DX, Singapore SMEs will grow in digital maturity, and our trade association will be standing by their side in support.
DigiconAsia thanks Nicholas Lee for sharing his SME insights with readers.
