Stay focused on business goals when going digital
When looking to innovate and adopt technology, always keep business principles and goals in mind, say Emerging Enterprise judges
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ROUNDTABLE PANELLISTS:
- Christie Chu, head of emerging business and commercial banking cash, global commercial banking, OCBC
- Deborah Heng, country manager Singapore, Mastercard
- Emily Liew, assistant managing director for innovation, Enterprise Singapore
- Jonathan Yuen, head of commercial litigation and employment (disputes), Rajah & Tann Singapore
- Woo E-Sah, partner and head of assurance, RSM Singapore
Moderator: Elysia Tan, journalist, The Business Times
How should businesses distinguish between passing fads and crucial technological developments?
Christie Chu: It can be challenging – which is not ideal, as technological advances can present a significant business opportunity, or be a crucial tool for raising productivity or improving quality.
For a start, it is essential to understand the technology, its potential uses and impact, and market implications. Business owners should read reports and attend conferences, monitor industry developments, assess whether there is sustained adoption and interest, and learn how the technology can disrupt or enhance competitiveness.
If resources allow, pilots can help businesses evaluate the practical aspects and effectiveness of implementation.
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Deborah Heng: Businesses should evaluate the long-term potential and relevance of new technologies. For example, while the metaverse initially attracted substantial interest, its practical applications have so far been limited.
In contrast, artificial intelligence (AI) has demonstrated enduring value across sectors, enhancing customer experiences and optimising operations. Global AI adoption has reached 72 per cent in 2024, with notable growth in generative AI usage, which has doubled this year.
Mastercard has used AI for years, for instance to analyse transaction patterns to identify fraudulent activities in real time and significantly reduce losses. It is also exploring AI-powered personalisation, digital identity, next-gen retail experiences and self-learning intelligent networks.
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Prioritising technologies that demonstrate scalability, real-world applicability, and long-term benefits is essential for sustained success.
Woo E-Sah: Crucial technological developments are designed to solve specific problems or address key use cases and typically have market potential; technological fads often lack meaningful intent and are likely to fade away.
Businesses should first evaluate the technology’s longevity, to determine whether it addresses a long-term need.
They should also consider whether the technology is scalable and offers the flexibility to evolve as the business grows.
Next, analyse market trends to gauge demand and market adoption. It is also important to verify that the technology is aligned with the company’s long-term goals and strategies, and supports or enhances core functions.
Emily Liew: Businesses must deeply understand the problem – What are they trying to solve? What is the market demanding? – and invest time and resources accordingly.
Conduct research, stay updated on the latest developments and talk to experts. It helps to have a team member with technical background, focused on uncovering emerging, disruptive technologies. They should regularly visit the world’s top innovation hubs to learn what is happening there.
Remember that transformative innovation often requires a leap of faith. What may seem like hype, given enough time and resources, could very well deliver on its promise.
Setting a space aside from day-to-day business realities for exploration can allow such innovations to flourish and surprise us.
Jonathan Yuen: Businesses need to take the time and effort to find out more, truly understand the underlying technology, and ask themselves the critical question: So what? How does this help my business?
Just because phrases like blockchain or AI start appearing everywhere doesn’t automatically make it something that a savvy business owner should jump into. What’s right for other businesses and industries may not be right for you.
What are major threats or common pitfalls for a new entrepreneur?
Chu: One is cash flow management. Failing to budget, manage cash flow, create financial projections and plan for unexpected expenses can cause financial difficulties.
Entrepreneurs should use financial management tools to address this.
Additionally, pursuing too many ideas at once can lead business owners to spread themselves and their resources too thin. Keeping focused on a specific product or target market can make it easier to build a strong and sustainable foundation for the business, or pivot when an idea fails.
Those who do well are typically those who invest time and effort into building a network of industry insiders, partners and mentors to gain knowledge, uncover opportunities, and shorten their pathway to success.
Woo: Underestimating expenses or overestimating revenue can cause cash flow problems. It is crucial to keep track of fixed and variable costs, revenues, and understand break-even points and working capital requirements.
Entering a business venture without a solid plan is not sustainable. A well-structured plan should outline goals, strategies, financial projections, and potential obstacles.
Businesses must ensure that their current manpower, technology, and capital can support their expansion, or they risk straining their operations.
Yuen: To borrow a film title, when new entrepreneurs try to do “everything everywhere all at once”, they will invariably spread themselves too thin, and increase their own risk of failure.
When resources are scarce, new businesses need to stick with the basics and focus on their key value proposition and generating revenue.
“Fake it till you make it” and “building the plane as you fly it” are actually poor pieces of advice and simply make your business look unstable and dysfunctional to investors and partners.
Liew: Some new entrepreneurs may get too enamoured of an idea and overlook the importance of a hard-nosed analysis of its technology and market potential, causing a “tech-push” situation – a technology looking for a problem.
While passion and conviction are important, equally important is understanding knowledge gaps. Seek to regularly validate the idea or product with independent experts, to prevent blind spots.
Another common pitfall is the lack of business know-how, which is critical when scaling up. Building a network of mentors and partnerships can help entrepreneurs access different resources for growth, be it market opportunities, funding or talent.
Heng: One pitfall is not recognising the value of strong cybersecurity defences.
As marketplaces and transactions move online, cyberthreats increase, exposing businesses to potential breaches that can compromise customer data and disrupt operations. This affects not only large corporations or tech startups, but all businesses with an online presence, including micro or home businesses.
New entrepreneurs also often struggle with scaling operations efficiently.
Rapid expansion without the necessary infrastructure, resources, or management experience can lead to inefficiencies, decreased product or service quality, and customer dissatisfaction.
How can businesses turn an unpredictable environment into a source of opportunities?
Liew: Uncertainty can be a great motivator for creativity. An always-evolving environment means that there are opportunities. But businesses must be agile and able to adapt their products, solutions or even business models to meet current needs.
For example, the pandemic and geopolitical conflicts may have disrupted supply chains, but they have also created demand for new tech solutions to better trace and manage movements of goods.
Meanwhile, evolving needs in climate change mitigation call for solutions in areas such as renewable energy or food sources.
Yuen: Particularly in new or emerging markets, businesses should plan rigorously to develop contingency plans.
They must not just plan with pessimism to anticipate the “what ifs”, but also consider scenarios where success can be exploited. This is so that they can react and pivot responsively when opportunities arise – rather than being forced to take a strategic pause to rethink and recalibrate, losing time and initiative.
Chu: Firstly, building a strong financial position and managing cash flow well is essential for weathering downturns and quickly capitalising on opportunities when they arise.
It is also crucial to leverage data analytics to monitor trends in demand and patterns in consumer behaviour. Using data, businesses can identify and respond to changes more quickly and effectively, leading to better business outcomes.
OCBC’s customer analysis indicates that highly digital businesses – probably more likely to utilise data from digitalised operations – outperformed less digital businesses significantly.
Employees, being subject matter experts in their fields, are well placed to spot opportunities and develop solutions to address emerging market needs.
Business owners can encourage innovation and cross-functional collaboration, empower employees to experiment, and invest in learning and development to arm them with the knowledge and skills to navigate unpredictable environments.
Woo: A positive, “can do” mindset is important. Foster a culture of continuous learning, innovation and experimentation. Employees should be equipped with the skills to navigate and thrive in a changing environment.
Through robust risk management, businesses can be proactive rather than reactive, making informed decisions that minimise risk and maximise opportunity. This would turn uncertainties into competitive advantages. Timely pivoting, based on risk assessments, is also crucial.
Additionally, leveraging analytics and data-driven insights can help businesses anticipate trends and customer needs, enhancing efficiency and enabling new business models.
Also diversify risks and avoid over-reliance on a single product or service – never put all your eggs in one basket.
Heng: Companies can capitalise on economic shifts and changing market dynamics by, for instance, accelerating the adoption of digitalisation and emerging technologies to create new revenue streams and expand market presence. Diversifying solutions to meet different customer needs is also crucial.
Digitalising operations can cushion small businesses against market unpredictability and volatility.
A Deloitte study found that small businesses that fully embrace digital tools see revenue growth up to four times more than less digitally advanced peers.
Digitalisation can streamline operations, enhance customer engagement, and provide data-driven insight for better decision-making.
Mastercard supports this with end-to-end solutions, from establishing an online presence to using data-driven insight to engage customers.
Mastercard also provides online resources to guide small and medium-size enterprises in protecting their businesses while digitalising.
How should companies balance between competing concerns such as resilience versus efficiency?
Chu: To start, define business priorities and objectives, considering short-term and long-term goals. This will help prioritise various concerns in specific situations. Then, use a data-driven approach to guide decision making, by determining key performance indicators.
Importantly, these concerns may not be mutually exclusive. For instance, building resilience often involves identifying and mitigating risks, which can also increase efficiency by minimising disruptions and downtime.
Woo: It is important to clearly identify concerns or priorities, and understand how they affect or align with the company’s mission and values.
Whenever possible, use data to facilitate rational discussion and impact evaluation, such as stakeholder expectations and business goals.
Outcomes should be measurable to track progress and assess whether objectives have been met. Avoid decisions based on emotions and personal preferences. If a hard decision is needed, communicate openly with affected stakeholders about the challenges and decisions, to build trust and collaboration in addressing competing concerns.
Liew: Keeping a long-term perspective is useful when balancing competing business needs. Resilience, talent development, even innovation, often take a backseat due to their costs and delayed benefits, but not investing in these areas can be detrimental to the business over time.
Resource allocation between longer-term needs and short-term goals often depends on their growth stage.
Early on, the focus is on creating value and turning a profit, and hence there is very little room for other investments.
As a business matures and stabilises, its priorities may shift to protecting value, emphasising longer-term business sustainability.
Heng: Balancing competing concerns requires a holistic approach for long-term success and sustainable growth.
For Mastercard, detecting and preventing fraudulent transactions is as important as ensuring smooth checkouts without declining genuine transactions.
Mastercard uses AI to process data and assess risk, and to predict and detect potentially compromised cards. Through the predictive technology, Mastercard has doubled fraudulent transaction detection rates and reduced false positives by up to 200 per cent.
Yuen: The central idea is always about finding the right, practical balance for each business based on its own unique set of circumstances, its value system and risk mindset, rather than aspiring to some hypothetical abstract business-school or consultant-advocated theoretical construct of what “balance” entails.
Businesses need to ask themselves: Can I deliver to my customers and grow my business based on this operating framework? How much of a buffer do I have if I don’t?
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