3 digital challenges for SMEs and how to overcome them
TECHNOLOGICAL breakthroughs are happening daily all over the world. There will always be more room for improvement no matter how advanced a nation already is.
Take Singapore for example, the country’s small and medium-sized enterprises (SMEs) digital adoption was said to be slow at a recent discussion.
KPMG Singapore’s Head of Enterprise Market Jonathan Ho said that the country’s SMEs need help in their transformation journey.
Despite the country’s positivity on new technologies, all panelists agreed that Singapore SMEs lack momentum in adopting digitization.
The Automation Support Package (ASP) launched in Budget 2016 had only brought aid to 300 firms. The scheme was targeted to support SMEs on automation projects to essentially drive productivity and scalability.
Its initial expiry date was 31 March of this year but has been extended for another two years. The Singapore government is set to secure the country as a technology trailblazer in the new Budget 2019.
This will be prime time for SMEs to seize the opportunity for technological advancement in its operations.
At ‘KPMG Insights from the Inside: Singapore Budget 2019,’ panelists discussed the challenges SMEs are encountering in the digital space. Countermeasures were also proposed by panelists to ease SMEs’ struggles.
Many SMEs do not recognize what digital transformation really is. Understandably, it can be confusing with all kinds of solutions being packaged as a form of digital transformation.
Here are the most common challenges that SMEs face in embarking their digital transformation journey.
#1 | Awareness of the importance of digital transformation
Digital transformation is not about technology, but more about how businesses keep up with the world’s increasingly tech-intensive consumers.
At the rate that tech is merged into processes, digital transformation is not a matter of ‘if’ but ‘when.’ So, it only makes business sense that leaders take actionable steps in making digital transformation an optimized process for operations.
The misguided perception that ‘digital equals costs’ has dampened many proposals for digital transformation. While technology lessens costs, it is more relevant for businesses to study how technology increases revenue productivity instead.
Businesses that adapt to their consumers will always be in business and that is what digital transformation is about.
#2 | Lack of understanding of digital skills that fit existing business
Some decision makers forgo digital transformation simply because they do not understand how it can be incorporated into the business.
Some businesses will be more compatible with digital transformation than others. Not understanding the compatibility could potentially cost the business more harm than good.
SME leaders should spend substantial time in dissecting the business operations and understanding which tasks can be automated or not.
KPMG Head of Tax Tay Hong Beng proposed that a team of consultants would assess SMEs in the initial stage before businesses go digital. This step would provide SMEs with a general direction to get started on their digitization.
In accordance, OCBC Bank economist Selena Ling suggested for the government to provide a checklist which SMEs can use for self-assessment. The checklist will comprise of potential digital opportunities that would fit existing business structures.
#3 | Insecurities about cybersecurity
While it may be counterintuitive, there is a legit ‘insecurity’ about cybersecurity in the SME space. Skepticism as such would be a great deterrent in moving operations to the cloud.
As of right now, cybersecurity efforts are focused on the military and home affairs rather than industry. Hence why SMEs do not have sufficient understanding of cybersecurity and its benefits on business operations.
With the world becoming expansively more connected, cyber attacks are easier for hackers and the damage will be greater. It will be critical for SMEs to consult with a cyber-professional in detail before spending on moving business operations to the clouds.
In a wider view, cybersecurity could also serve as a competitive edge that a business has. While instability will damage businesses, security could serve as an advantage in a business digital journey.
A vibrant and innovative economy will provide Singapore the opportunities to realize its ambition of becoming a world leader in technology. With the government offering great support on its digital journey, it is only a matter of time when SMEs move up the digital maturity ladder.
- Cybercriminals are shapeshifting to evade security controls
- Google Cloud is adding regions in Malaysia, Thailand and New Zealand
- Malware attacks are here to stay and have a new target in its line of sight
- Ensuring seamless tech adoption for financial markets around the world
- Organizations are strengthening their software supply chain security efforts to avoid past incidents