The ASEAN SME Transformation Study has shown that SMEs in top ASEAN countries including those in Singapore see technology innovation and investment as essential for business expansion and cost optimisation. Investment in ERP solutions for operational automation needed to go up further to enable digital transformation.
BankBazaar Singapore – February 13, 2018
Singapore: The ASEAN SME Transformation Study conducted by EY, UOB, and Dun & Bradstreet has noted that small and medium-scale business enterprises (SMEs) in the region have identified technology as the primary area of investment to boost business performance and growth.
The study conducted in late 2017 showed that almost 60% of SMEs in the ASEAN region were willing to channel investments into new technology acquisition over investments for creation and procurement of tangible assets like factories and machineries.
The study also captured the mood of SMEs in Singapore. Echoing sentiments expressed by managers of their other ASEAN counterparts, 63% of SMEs in Singapore also identified technology and expansion of digital footprint as key to business performance and growth.
While 78% of the surveyed SMEs said that investing in new web and app-based technologies would lead to better customer experience and loyalty, most were still cautious when it came to adoption of cutting-edge technology.
Lawrence Loh, Head of Group Business Banking at UOB, observed that SMEs would need to explore the entire range of technology options available and choose carefully to ensure efficient utilisation of resources.
He also said that these businesses were dependent on licensed software products, CRMs and content/database software solutions. Using and maintaining these solutions usually takes up a lot of resource bandwidth and reduces productivity. Companies needed to open up to technologies like SaaS and ERP solutions for improvement of payroll, procurement, billing, and other daily operations.
Loh added that these companies would also need to hire digital specialists to successfully transform and prepare themselves for the digital economy. Application of disruptive technologies like robotics, 3D printing, and AI, among other things, are growing although stronger penetration is needed for complete transformation.
Reliance on traditional technology solutions is not only acting as a deterrent for growth but also increasing the operational costs. This is affecting top-line and bottom-line profit. By using SaaS and other ERP solutions, small companies can automate their daily administrative functionalities, thereby better utilising resources and skills available with them.
The joint study conducted across six ASEAN member countries involving 1,235 SMEs has revealed that almost 25% of the respondents were optimistic about double-digit growth while 52% were hopeful of witnessing a jump in revenue. The results certainly hold significance because many companies in the region are still facing economic challenges and headwinds.
Audrey Chia, on behalf of Dun & Bradstreet Singapore, noted that to keep up with these sentiments and aggressive growth targets, companies would need to invest in technology enablers and in upskilling/right-skilling their resources.