- August 18, 2020
- Posted by: avantconsulting
- Categories: Recommended Reads, Singapore Economy
Digitizing and Digitalization are key for Small and Medium Enterprises (SMEs) in 2020 – In a disrupted economy, many SMEs are facing a challenging time to keep their businesses afloat. A few months back, Singapore’s partial lockdown has led to suspensions of some businesses and many reported drastic plunges in their sales revenue. The government has several grants to encourage businesses to go digital in recent years and in this new normal, it has occurred to be quintessential for businesses to go digital. Not only is it convenient, it serves to boost efficiency and productivity as well.
Take for instance, businesses in the food and beverage industry. In efforts to tackle COVID-19, dine-ins were not allowed, and most consumers were not leaving their homes due to safety precautions. As a result, many businesses flocked to delivery apps in hopes to at least retain a portion of their sales. Many also tapped on social media platforms to promote their businesses given the rise in number of ‘circuit bakers’ we have observed on Instagram and Facebook. As for the corporate landscape, we learned that it is crucial for companies to digitize their information and ensure their employees have relevant gadgets in order to effectively and efficiently work from home.
We observed how strong business models can help in uncertain times and therefore, it is crucial for SMEs to embrace digitalization in their business practices. In a 2019 study by the Ministry of Trade and Industry, the adoption of digital tools leads to an increase in a firm’s value-add and productivity by 25% and 16% respectively.
For businesses who are just kickstarting their digitalization journey, they can opt for simpler systems such as having a mobile application or digitizing their paperwork. On the other hand, some may look to incorporate more sophisticated technology in their business processes. Ultimately, there is no standard model you have to follow as it boils down to the industry your business is in, the size of your company and your business objectives.
How can SMEs go digital? There 3 main components to digital transformation – processes, operations and relationships with customers. For a start, businesses can look to improve these areas first.
Automation – transforming business processes
Alternatively, you can look to improve business efficiency by adopting automation in your day to day operations. It could be incorporated into your manufacturing processes or even telephone networks. With automated processes, it could potentially save you a lot of time and manpower.
Go Cashless and Paperless – improving business operations
In the longer run, business operations may see a significant rise in efficiency. Invoices, purchase and delivery orders can be in digital form. It makes tracking a whole lot easier because you no longer have to rummage through stacks of paper for information retrieval.
Mobile Applications – maintaining relationships with customers
The rise in mobile usage in Singapore has made this a popular and well-received medium for businesses operating in the B2C context. A phone is so much more than communication – we link our credit cards to make purchases, we tie it with our fitness trackers to keep our health in check. Many businesses (fashion retail stores, restaurants, gyms etc.) launch mobile applications embedded with their loyalty programme as it is a powerful tool to retain customers. It is convenient, fast and seamless. Hence, if you are in the B2C segment, you can consider having a mobile application to reach out to more consumers while retaining your existing customer base.
Afterall, despite the numerous grant schemes by the government, implementing digital processes could be taxing on your capital. This is especially so if you are keen on adopting more sophisticated technology such as Artificial Intelligence (AI) or Augmented Reality (AR). Perhaps, you are diving into research and development for some up and coming software or product. All these business development strategies involve large amount of capital. Should you require financing aid to expand your business, feel free to reach out to us. We can guide you to secure low rates for your business loan.
Digitizing and Digitalization are key for Small and Medium Enterprises (SMEs) in 2020