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Going digital a necessity, not a choice, for SMEs
- Christie Chu, head of Emerging Business, Global Commercial Banking, OCBC Bank
- Chew Mok Lee, assistant chief executive officer, ICM and Digitalisation, Enterprise Services and New Industries, Enterprise Singapore
Moderator: Janice Heng, journalist, The Business Times
WITH the rapid pace of technological advances, enterprises of today have little option but to keep up or ship out.
But for businesses that decide to invest in digitalisation, many have come to see how they can improve productivity, scale up and even internationalise.
BT talks to two industry leaders to find out how businesses can go digital successfully.
Why is going digital the way forward for companies?
Chew Mok Lee: Digitalisation drives capability and growth, enabling SMEs to stay relevant and become more competitive. Going digital has two key benefits - it makes internal processes more efficient or productive, and companies can capture global opportunities through new channels.
For example, a heartland merchant can make informed business decisions and smoothen processes with the implementation of point-of-sales or inventory management systems.
Similarly, a local supplier can now make use of e-commerce channels or platforms to access new customers in regional markets.
Christie Chu: Going digital may be a heavy investment and requires time, but it is absolutely necessary in the long run thanks to the cost benefits it can bring. It is necessary for sustainable growth, too.
Customer behaviour is also changing. The way they search for information, buy and sell products and services, make payments - things are going the digital way fast. Technology is already very much a part of our lives, especially among the younger generations such as generation Z, which was born into a digital age. Companies need to cater to this as it is what customers are accustomed to.
We have always believed in making banking simple, easy and fast and this is even more important in the face of disruption. So we continue to ensure that our customers have a seamless experience and provide them with greater value, enhancing our banking products and services by leveraging technology.
We have notched several firsts in this regard including the introduction of voice banking and facial recognition for our business owners via our business mobile banking app.
Can you share some of your own company's strategies in going digital, and how these have improved the workflow and processes?
Christie: Customer experience is our foremost consideration when we are thinking of new initiatives.
Our iPad account opening process saves time for our business banking customers by, for one, requiring just one signature instead of more than 10 using hardcopy forms.
We also launched a simplified account opening service in 2017, where existing personal and business banking customers can open an account without visiting a branch. Using data analytics, a straight-through application is done, with verification via phone or video conferencing, hence improving workflow and account opening speed.
Enhancements like the introduction of facial recognition authentication and voice banking to our business mobile banking app have also contributed to customer experience and have been key to the 73 per cent growth in business mobile banking customers that we saw in 2017.
Moreover, such digital initiatives make us more efficient as there is less of a need for customers to make phone enquiries or visit a branch.
Why are many SMEs reluctant to embark on digitalisation, and how can they go digital with limited resources?
Mok Lee: Companies' top concerns include cost, the lack of resources such as manpower, and unfamiliarity with the process of going digital. To help them overcome initial challenges, Enterprise Singapore and other government agencies have in place several measures:
- For SMEs just starting out on the digitalisation journey, they can approach business advisors at the 12 SME Centres located island-wide to get one-on-one guidance.
- To take their first steps, such SMEs can tap the Productivity Solutions Grant as it provides pre-scoped, ready-to-adopt IT solutions and equipment with subsidies of up to 70 per cent of the cost.
- Businesses that require more complex, customised solutions can leverage the Capability Development Grant to take on larger-scale projects, such as development of e-commerce platforms.
- Those with more advanced digital needs such as data analytics and cybersecurity can approach the SME Digital Tech Hub, where consultants go beyond providing basic advice to offer specialist digital technology advisory.
Christie: The mentality of "if it ain't broke, don't fix it" may be the reason why some SMEs choose to delay big digitalisation projects. Furthermore, they may think that the return on investment may not warrant the time and monetary investment, especially as they are busy running their daily business operations.
I think it is a matter of time before all SMEs realise that going digital is not a choice but a necessity.
The Productivity Solutions Grant would be a good place to start. For instance, SMEs can choose from pre-approved digital solutions like accounting software, customer relationship management or enterprise resource planning systems.
SMEs can also talk to their bankers to understand what the best avenues of financing are for them if they want to undertake such digitalisation projects.
What can employers do to encourage digitalisation in the workplace? Should there be more government support?
Mok Lee: There is government support available, as mentioned above. Enterprise Singapore also organises and supports events to share practical insights, latest trends and best practices with companies.
Our SME Technology and Innovation Day on May 15 and the SME Centre Conference on May 16 are examples.
More importantly, the leaders of companies play a critical role as they chart the direction for the business.
Going digital also does not take place overnight. Companies and employers should take a long-term view on digitalisation and keep an open mind. While digitalisation may disrupt business operations initially, it will sustain the company's growth.
It is equally important to invest time and resources in the employees as people form the core of any company. It is necessary to build and groom talent with the right skills to support the digitalisation journey, as well as redesign job roles in line with this move.
Christie: Being thrown into the deep end is daunting for employees who are used to more traditional processes. Therefore, in order for a company's digitalisation strategy to be complete, it must make provisions for the upskilling and re-training of employees.
In the Microsoft Asia Digital Transformation Study published last year, the lack of a digitally skilled workforce was one of the top three barriers to digital transformation in Asia, which shows that we still have a long way to go in this regard. This is especially so in Singapore, given its small manpower pool and tight foreign manpower policy.
Perhaps a top up to SkillsFuture accounts in the near future can be helpful, but ultimately, it is up to the employee to decide whether to use it and on what courses - the government and companies should encourage a learning culture, but it is the individual's responsibility to adopt a positive attitude toward skills upgrading.