New study finds APAC SMEs don’t really see value in technology
REGULATORS in the Asia Pacific (APAC) are driving the adoption of technology among small businesses and mid-sized enterprises by offering education, creating incentives, and building ecosystems.
Initiatives by the Singapore and Malaysian governments are the most widely recognized when it comes to digital transformation for SMEs.
However, do business owners really see the value in using technology? A new study that polled the leadership of 1,500 SMEs in the APAC found that 68 percent of respondents do not plan to increase digital spending for sales, marketing, customer service or e-commerce tools.
In fact, 17 percent actually said that they were planning to decrease their digital spending in these areas — which is quite concerning and could potentially stagnate these SMEs or worse, cause them to fail.
To be completely fair, the report only polls China, Indonesia, and Japan and believes that the three markets sufficiently represent the APAC, something many experts will disagree with.
However, given the accelerating pace of digital change in these countries — with active mobile payment users in China growing over the 500 million mark and digital transactions in Indonesia nearly quadrupling between 2014 and 2017 — analysts would typically expect SMEs here to be more optimistic about the future of technology.
Here are some of the top concerns and reservations local SMEs have about adopting technology:
- Privacy and security concerns (45 percent)
- Lack of customer support for marketing tools (44 percent)
- Uncertainty with the relevancy of data analytics (38 percent), and
- High service charges for payment tools (37 percent)
The study also polled SMEs that didn’t use any technology platforms or tools at all and found that 72 percent of them said they were uncertain about whether digital platforms would help their business at all, and 65 percent said that they didn’t have the resources to implement and maintain new-age digital tools and platforms.
Slightly more than half of the SMEs that didn’t use technology also claimed to lack the skills and experience needed to manage digital platforms.
Finally, according to the survey, companies that did use digital tools said that marketing technology and applications were a top priority/preference — significantly higher than technology in sales, payments, and customer service functions.
From the looks of it, although regulators tend to work hard on creating policies and frameworks to encourage small business owners and mid-sized enterprises to use technology, their impact seems to be limited.
If the uptake of digital technologies, tools, and platforms is to accelerate among SMEs in China, Japan, Indonesia and the rest of the APAC, vendors need to play a bigger role in nurturing these market and handholding business owners to learn, understand, and value new-age solutions.
While lowering prices of digital tools and offering training and education might be a good option, in order for vendors to really succeed in the long-term, providing ongoing support to customize and maintain the tools and platforms will be key — especially for SaaS vendors who care about renewals.
IDC recently said that SaaS will be the largest category of cloud computing, capturing more than half of all public cloud spending this year and leading the way with applications purchases.
The leading SaaS applications are enterprise resource management (ERM) and customer relationship management (CRM), followed by content workflow and management applications and collaborative applications, IDC explained.
While SaaS has enormous potential in the future, to succeed in the APAC, maybe vendors need to re-think their customer acquisition and retention strategy.