This article was first published in The Business Times on 8 November 2018.
Digital transformation has dominated conversations among business and government leaders in recent years. Today, there is little doubt that in the near future every organisation will be a digital one.
The opportunities in the digital economy are real. According to the Unlocking the Economic Impact of Digital Transformation in Asia Pacific study conducted by Microsoft and IDC Asia/Pacific, digital transformation will add an estimated US$10 billion to Singapore’s GDP, and increase the growth rate by 0.6 percent annually, by 2021.
As organisations in both the private and public sectors accelerate their digital transformation investments and plans, an important question to ask is – are the small and medium-sized enterprises (SMEs) in Singapore also ready for this digital future?
SMEs are generally optimistic about the potential of digital transformation
In search of this answer, Microsoft Singapore collaborated with the Association of Small & Medium Enterprises (ASME) to understand the current state of digital transformation among local SMEs by polling over 1,000 SMEs in Singapore across industries.
The resultant SME Digital Transformation Study in Singapore revealed that over half (57 percent) of SME leaders have heard of the term ‘digital transformation’, and 56 percent of them said that they have strategies in place for digital transformation.
While a good start, this is much lower than the 98 percent of mid- and large-sized organisations in Singapore that were polled in the earlier study, who said that they have digital strategies in place.
However, SMEs are comparatively more optimistic about the potential impact that digital transformation can bring to their bottom-lines, projecting an average of 26 percent in revenue gains and 22 percent in cost savings from their digital transformation investments – higher than the 17 to 20 percent improvements observed by larger organisations as a result of digital transformation.
With positive sentiments around the potential impact of digital transformation to their businesses, there is much room for the industry and technology companies such as Microsoft, to come together and collectively empower SMEs with the ability to accelerate digital transformation, especially when only one in four SME leaders said that their digital implementation has been successful in the study.
SMEs value increased business efficiency as the top benefit of digital transformation
In terms of the key digital transformation benefits that Singapore’s SMEs prioritise for their businesses, increased efficiency in business operations was named the top benefit by 33 percent of SME leaders, followed by attracting new customers (15 percent), increase workforce efficiency (9 percent) and cost savings (9 percent). This view was also echoed by the SME customers that I have worked with, including Asiawide Print Holdings and Car Club.
Leveraging the capabilities of the Microsoft Azure intelligent cloud, Singapore’s leading green corporate printer, Asiawide Print Holdings, has enhanced the efficiency of its print operations, freeing up valuable time that was previously used to manage on-premise servers to improve their customer relationships. Similarly, car-sharing operator Car Club has successfully digitised and automated their lead-generation, funneling and registration processes, which has resulted in greater operational efficiency and enhanced customer experience.
SMEs need help to accelerate their digital transformation
With the endless possibilities that digital transformation can bring to Singapore’s SMEs, we at Microsoft are committed to helping them accelerate digital transformation, and are working closely with government agencies and industry bodies to do so.
In the last five years alone, Microsoft has reached over 100,000 SME customers through over 1,000 business partners to empower them with technology that can transform their businesses.
Last year, we partnered the Infocomm Media Development Authority (IMDA) under their Strategic Partners Programme (SP) to help Singapore-based tech companies scale and improve their digital capabilities, as well as expand their network and globalise through collaborations with multinational companies (MNCs).
We are also working with IMDA to enable a pool of Singapore-based tech companies to build solutions for IMDA’s SMEs Go Digital Programme, and help accelerate the adoption of these preapproved solutions among SMEs.
Perhaps equally important to successful technology adoption is the need to equip our workers with future-ready skills in order for them to be able to contribute to building our shared digital future. This was the reason why we partnered with AI Singapore on a joint effort to equip 12,000 Singaporeans with AI knowledge and skillsets to capture the new opportunities in the digital economy through the AI for Everyone and AI for Industry initiatives.
Through our collective efforts, we believe that more SMEs will be empowered to leverage technology effectively to transform themselves digitally, putting them in a stronger position to compete in the digital future.