Empowering SMEs to digitalise to connect to global opportunities

THE world is slowly moving into a year of promised macroeconomic recovery on the back of vaccine optimism following the ravages of Covid-19. While the pandemic has posed many challenges to global supply chains, we are experiencing a silver lining amid the crisis: an expanded digital world of opportunities and a booming global digital trade economy projected to reach US$25 trillion by 2025. We are witnessing rapid recovery, accelerating at a pace far beyond our imagination across industries worldwide.

Global disruptions such as trade wars and the recent Suez Canal crisis have brought about the regionalisation of global supply chains. It has further underscored the pressing need for companies to digitalise and to grow their businesses while preparing a digitally-skilled workforce that can navigate unforeseen disruptions.

Companies that have already undergone digitalisation are generally more optimistic about the future, with three in five Singapore small and medium-sized enterprises (SMEs) hopeful that their revenue will grow in a post-pandemic future.

Meanwhile, seven in 10 are confident that their businesses will recover, showed a recent survey by UOB of 782 Singapore SMEs.

SME challenges on digital transformation

While digitalisation has the potential to spur business growth, the reality is that change does not happen overnight.

It would be difficult for SMEs, especially those in their early and middle stages, to implement comprehensive digital transformation initiatives in the face of inadequate manpower and resources.

Despite the major push towards digitalisation and growing importance among companies for digital transformation, UOB's 2020 survey shared that Singapore SMEs are currently lagging behind larger firms in digital transformation.

Among the top reasons why SMEs fail to keep pace include high costs, fear of cybersecurity issues and a lack of necessary digital skills among employees.

EY's "Future of Work in Supply Chain" survey last year also echoed that the lack of skilled talent remains the second most pressing concern for employers, besides capital.

Aside from these concerns, SMEs have their own practical considerations and preconceived notions about digitalisation.

Most SMEs view digitalisation as a resource-intensive initiative that takes up time and effort, which they believe can be better devoted to generating new sales and leads for their business.

Baby steps

Contrary to popular belief, the process of change does not always have to be revolutionary, and businesses need not go through the daunting process of creating an entirely new system and infrastructure.

One way SMEs can overcome these concerns and limitations is by tapping onto digital platforms and technologies that that bolster SMEs' productivity and business performance.

With the right tools and capabilities, these solutions could bring about a fundamental change in how SMEs operate, tackling existing business challenges while empowering them to take advantage of promising new opportunities to grow their business - such as circumventing geographical restrictions to discover new trade opportunities across the globe.

However, with the plethora of options available for SMEs to choose from, they should still be prudent in choosing the solution that best aligns with their business needs and goals to avoid spending time and money unnecessarily.

Unlike business-to-consumer (B2C) businesses, business-to-business (B2B) businesses are generally more complex, and less dependent on ever-changing individual consumption patterns and behaviour.

For trade-focused B2B businesses, the sales and procurement process is more defined, curated and planned as it is characterised by group buying rather than individual buying - with significantly higher stakes.

B2B businesses would then need the right tools that support a sales and procurement process characterised by multiple rounds of approval and scrutiny.

Additionally, these tools need to be able to better target the relevant customer profiles according to their trading characteristics and effectively address their needs.

SMEs can work with digital B2B marketplace platforms such as Commodities Intelligence Centre (CIC), which uses blockchain technology to offer one-stop integrated value-added services that simplify complex operations through a single touchpoint.

Finding the right business partner is hard when travel restrictions are in place, especially for SMEs used to conducting business meetings face to face.

Having access to CIC DataPro's two billion of aggregated Bill of Lading import/export records of over 120 million companies and relevant know-your-customer (KYC) service could provide SMEs the market insights, allowing them the chance to grasp the global trading situation and uncover new regional business opportunities.

From exploring new market opportunities, alternative trading routes to getting more informed insights of their prospective overseas trade counterparties and partners, the up-to-date information allows users to better manage their business, avoiding the pitfalls of entering into a trading position against market headwinds when market prices are in a downtrend.

Helping build resilient businesses, CIC's TradePro solution also offers automated functions that provide businesses with real-time insights around market prices, real-time monitoring, and control of their trades, shipments and cash-flow to trade confidently with greater transparency and traceability, as well as to achieve better trade efficiency and synergies.

At the same time, eligible trade counterparties of CIC may also enjoy financing support with ZMA Smart Capital for supply-chain financing to help them bridge their funding gap to grow their businesses.

New digital world order is here to stay

As we navigate the new normal, it is clear that digitalisation will no longer be a buzzword but a norm. It is no longer an optional box to check off, but a critical necessity for businesses to incorporate in order to survive and prosper in a changing supply-chain industry.

SMEs have to adopt digital means to keep up with the ever-changing times, and to encourage their workforce to be digital-ready in order to gain that competitive edge in the current market.

Just as China embarks on its ambitious nationwide project to build a digital Silk Road, SMEs should create their reliable ecosystem in this region to survive the new digital world order.

• The writer is chief executive officer of Commodities Intelligence Centre