SMEs need more help to kick-start digital journey

Singapore

SMALL and medium enterprises (SMEs) need more help to get past the initial hurdle of embarking on digital transformation, said panellists at the KPMG Insights from the Inside: Singapore Budget 2019 discussion on Friday morning.

KPMG Singapore head of enterprise market Jonathan Ho noted a slow rate of technological adoption among SMEs, with the Automation Support Package for large-scale automation projects, for instance, having helped just 300 firms since its launch in Budget 2016. In Budget 2019, it was announced that this scheme would be extended for another two years beyond its original expiry date of March 31, 2019.

On the digital front, SMEs face three barriers to entry, he said. First, awareness among business leaders is "still not quite there". Second, a lack of in-house digital skills might cause SMEs to lack the confidence to adopt digital solutions, with no clear way of choosing among a slew of products and service providers. Third, a sense of "insecurity" about cybersecurity may make firms reluctant to take steps such as moving their operations to the cloud.

Head of technology, media and telecommunications Juvanus Tjandra noted the enduring perception that "digital equals costs". With SMEs tending to focus on the pay-off of revenue versus costs, the digitalisation movement should highlight the possibilities of using technology to improve revenue, instead of only looking at cost savings, he suggested.

One idea proposed by head of tax Tay Hong Beng was for a team of consultants who could help SMEs with an initial assessment of how their business can go digital, providing a general direction for firms to get started.

Similarly, guest economist Selena Ling from OCBC Bank suggested that the government grants portal could provide a checklist or "quiz" for SMEs to use to discover the digital opportunities that would fit their firm.

It does not help that Singapore has a shortage of "cyber-professionals", with cybersecurity efforts seeming more focused on the military and home affairs rather than industry, said head of cybersecurity, management consulting Daryl Pereira.

To give firms more access to IT talent, Singapore's institutes of higher learning could increase their intake of computer science students, suggested Mr Ho. In the meanwhile, the government could also look at relaxing rules for the hiring of foreign IT professionals, he added.

Friday's discussion also covered issues such as new opportunities for healthcare firms with the rise in healthcare spending and demand, and the private sector's potential role in public infrastructure projects.