3 things SMEs in Singapore need to know

Small to medium sized enterprises (SMEs) are the lifeblood of all economies across Asia Pacific, however, technological disruption of industries and the need to innovate and change business models are key challenges that need to be addressed. According to an IDC report, escalating costs of operations, the emergence of new business models, competition and changing customer demands are pressuring small businesses in the region. There is an urgency for them to review their business model and to ensure sustainability - ultimately to figure out how to do more with less resources.

In many ways, SMEs are at an advantage – agile, closer to the action and nimbler than their bigger-sized counterparts. Even so, SMEs face the same issues they’ve always faced: resources, whether from a budget or manpower standpoint – and how much of that should be diverted to power technology implementations versus tangible business results. Sometimes there does not need to be a trade-off.

Singapore-based SME Seng Hua Hng Foodstuff, better known as the food manufacturer of the Camel brand of nuts, was one such traditional SME that saw the added value that technology could bring to business. Working in tandem with the organisation’s digital transformation leader, we helped to retrofit their facilities with wireless routers to facilitate seamless connectivity that support a more efficient inventory management process. Virtual meeting solutions helped the company’s team in Singapore to communicate with colleagues in their overseas facility, cutting down travel cost but still having the experience of a face-to-face virtual meeting. Such measures helped to boost productivity and efficiency across the business amidst a tight labour market, especially given the organisation’s geographic span across markets around the world.

Seng Hua Hng Foodstuff is one of many SMEs that saw the challenges they had to address and set a digital transformation strategy as a business imperative. For every Seng Hua Hng that has already done so, there are countless other SMEs looking to embark upon digital transformation but have no idea how, or do not know what they need. To help tackle the challenges in the digital economy, here are three things that SMEs need to know to overcome those obstacles and thrive in today’s business landscape.

1) Be part of the innovation eco-system
The Asia Pacific region is home to the most colourful of contrasts and at the same time, opportunities. The vast amount of untapped economic potential in the region has compelled large organisations to set up regional headquarters in the business hubs of Singapore, Hong Kong and Shanghai, according to a report by a real estate consultancy. At the opposite end of the spectrum, a report by a management consulting firm revealed that $20.3b (US$15b) was invested in small businesses in APAC in the fourth quarter of 2018 alone. On paper, it’s a lopsided partnership but once the layers are peeled back, it will dawn upon both subsets that one needs the other to survive to this day and age.

Many SMEs today have cutting-edge talent, faster time-to-market business models and best of breed expertise and are well-placed to lead and disrupt the market.

2) Cybersecurity is still of paramount importance
We conducted a study that revealed that almost half of the SMEs surveyed suffered losses of up to $3.39m (US$2.5m), and just under half of them suffered eight hours of downtime, due to cybersecurity breaches.

A typical business’ network today is propelled by a mobile workforce and more of them are shifting workloads onto the cloud as they shift towards a more digital future. According to a recent report, 61% have started on their digitalization journey and transitioned to the cloud. A large and varied network has many advantages, but it also increases points of vulnerability, whilst simultaneously making it more difficult to have visibility into all the goings-on within the network. Threats are also increasing in complexity and sophistication, ranging from ransomware and phishing.

Cybersecurity should not be an afterthought but instead, should be an imperative in a business’ digital strategy. The first step in that direction is to have a strategic approach to building a comprehensive security environment and ensuring that the solutions are integrated and can work together to defend against potential attacks.

3) Leadership is key
Leadership is one of the key indicators of an SME’s success. In workplaces today, knowing how to lead an increasingly digitally savvy talent base into the future is what could define an SME’s innovation and sustainability.

Allowing for flexibility within the office environment is a way that an SME leader could take the reins and pave the way for success. Lean resources call for SMEs to tap into the benefits afforded by remote working. This gives SMEs access to skilled talent that can contribute to the organisation’s success from anywhere and at any time. SMEs also should not shy away from investing in their own. Individuals need to have a sense of purpose and belonging, so that they are invested in the organisation’s success and will do what it takes to realise that success.

Whilst the challenges seem daunting, there are still opportunities abound for SMEs to capitalise upon and thrive. SME’s must remain at the forefront of technological innovation and investment, whilst fully utilising them to offset their lack of resources. Amongst these, cybersecurity will be key, as an organisation is only as strong as its weakest link. Lastly, and perhaps most importantly, is the vested interest of the leadership. They have to lead, give their teams the ingredients and tools needed for success, whilst also being agents of change themselves. SMEs that can take these three steps to heart, will be well placed to ride the digital wave.