Digital transformation was on the rise before COVID-19, although it was the onset of the pandemic, with its massive disruptions to the global economy, that greatly accelerated its scope and pace.
Following the announcement of the Fortitude Budget with its measures to prepare businesses for the digital future, technology experts weigh in on the current situation as well as measures for businesses seeking to survive in the post-pandemic environment.
Necessity as a driving force
Says Francis Thangasamy, Vice President, Product Management, Asia Pacific, CenturyLink, “Over the past few months, we have seen the scale of damage the crisis has caused – the global economy has been massively disrupted, with severe repercussions to businesses’ bottom-line and revenue. Supply chains have also been thrown into disarray, and retailers and hospitality establishments have found themselves forced to scale back operations dramatically or cease business entirely for the near-term.”
Echoing his observations, Arlene Wherrett, Vice President and Managing Director, Asia, Sage notes that “As cities went into lockdown, businesses had to quickly enable their workforces to work from home and effectively telecommute full time.”
Besides the surge in telecommuting, physical distancing and lockdown measures have severely disrupted the retail industry. James Chang, CEO of Lazada Singapore notes that “retailers have experienced disruptions to their business models by the various lockdown and physical distancing measures in countries as well as the shift in consumer buying behaviour towards online shopping.”
These trends are likely to stay: “In this environment, eCommerce is fast becoming part of retail business’ strategy, and in some cases, forming the core of it,” he adds.
Necessity has been the driving force for the rapid pace of change: Rachel Ler, Area Vice President, ASEAN, Hong Kong, Korea, and Taiwan, Commvault notes that while many businesses at the start of the circuit breaker were under-prepared and had business continuity as more of an “afterthought”, they now came to see that their employees can continue to be productive, despite working from outside the office.
“Businesses will need to consider how we can enable the workforce to be more digitally equipped. Finding ways to leverage IT will be central to our digital future,” she says.
However, as Cheah Wai Kit, Director, Product Management (Security), Asia Pacific, CenturyLink, reminds us, with all the increases in digitalisation, there will also be an increase in structural unemployment. “Some verticals will be harder to transform and will take a longer time to recover, for example, the aviation and hospitality businesses, as well as entertainment and event-based businesses,” he suggests.
Moving forward as an SME
Given the challenging climate, are immediate steps businesses can take to ensure survival in the post-pandemic world?
One lesson is the importance of robust continuity plans. Says Pierre Samson, Senior Vice President, Asia Pacific, Alcatel-Lucent Enterprise, “we have learned for certainty that business continuity needs to be part of overall strategy. Business continuity cannot be an afterthought. Every business organisation needs to plan for and regularly test their business continuity plans.”
These plans, advises Thangasamy, include business resilience, emergency preparedness and disaster recovery plans. “Business leaders need to make sure they have these plans in place and put them through regular reviews by the management team, he says.
“Most importantly, businesses need to identify critical operations and processes to understand what procedures should be in place to meet productivity challenges and ensure business can run as normal, even in times of extreme disruption such as the current pandemic,” he advises.
He also reminds business leaders that besides “all the usual important considerations like employee well-being and safety, digital businesses need to ensure that they have a robust network to remain operational and connected,” as digital businesses “are driven by and reliant on data.”
“They will need to ensure that they have a strong network infrastructure that moves at the speed of your business. This means a high-performance network with capabilities to scale bandwidth and respond with speed and agility if demand surges,” he concludes.
Diversification for resilience
Thangasamy also highlights that these plans need to include a diversification in operations to ensure a constant revenue stream, dependent on their industry. “They need to pivot part of their capabilities to cater to the gaps within the disrupted supply chain while still maintaining operations to cater to existing customers,“ he advises.
He continues by reminding businesses embarking on digital transformation to see it as more than a mechanism for digital change, but also “as a broad organisational restructuring to reset standards for how the organisation takes an approach to their customers, employees and costs and revenues.”
“Modern enterprises are running more diverse business functions with unique and independent demands for technology adoption. It is necessary for businesses to first identify the most critical operations and processes to gain a better understanding of how technology can help safeguard these, as well as address any challenges in these areas,” he adds.
Technology supporting change
While these can seem like a daunting set of considerations, there is technology that is able to help. Wherrett points out the existence of enterprise resource planning (ERP) software that has quickly emerged as one of the key pillars of modern businesses. “It is especially useful for business leaders who need to connect disparate business processes and solve a myriad of challenges in a complex business environment,” she says
“ERP and other business management tools allow business leaders to gain a birds-eye view of their operations and tap on real-time data to support information-driven decision making. This is especially helpful for SMEs for which cost control is important, securing a real-time cashflow update and having the ability to react to market changes quickly can often be the differentiating factor between survival or failure,” she adds.
Additionally, she also suggests that SMEs look into technology offerings that drive efficiency and productivity.
“Automation tools that are designed to cut down on resources required for administrative or manual work for instance will deliver benefits many times over in the long run. One example is self-service administrative tools for HR and Finance functions. These are especially useful now that workers are working remotely.”
Scalability for the long term
In all aspects of digital transformation, one aspect experts frequently cite is scalability. Thangasamy says that “SMEs need to adopt technology with scalability in mind. They should plan their digital transformation strategy in line with business growth and choose technology that allows for modular add on.”
“They should also look to tapping on partners and vendors to help manage their technologies in a cost-effective manner. This in turn frees up manpower and resources that they can better allocate for driving strategic growth,“ he continues. He suggests cloud-based technology for its flexibility and cost savings, as well as exploring a multi-vendor approach to “minimise the possibilities of disruptions and avoid being locked down to specific technologies.”
“They can also tap on managed cloud services to gain the benefits of cloud without the need to maintain in-house expertise,” he adds.
Meanwhile, Ho Chye Soon, Singapore Country Manager, Nutanix, reminds business leaders that “aside from upgrading the technology and tools, SMEs also need to constantly upskill their workers so that they are equipped to use the new technologies.”
“The thing is, this will continue to be a cycle and it is not going away any time soon. Constant upskilling will be a core part of day-to-day work,” he concludes.
Agility as an SME strength
While the future looks intimidating for all businesses, SMEs are particularly vulnerable. Wherrett says that “due to their smaller setups, it is often tougher for SMEs to obtain sufficient budget to market their businesses or make adjustments to their operations in order to weather adversities. Adding on to this challenge, SMEs also struggle with cashflow, resource and talent constraints.”
However, what they lack in resources, they make up in agility. Thangasamy reminds us that “they are also more agile and nimble since decision making is usually done by one person or a small team. This trait offers SMEs to adapt and react to changes quickly, which in itself is an advantage in business resiliency.”
Recognising the importance of SMEs to the economy, many support packages exist to support them in their digital journey. Chang suggests that SMEs can start by exploring the support packages available to help them transition online.
“For example in Singapore, we have a partnership with Enterprise Singapore (ESG) which provides retailers a one-time 90 per cent support of the cost for retailers to start their eBusiness, which means when retailers sign up to be a seller on our platform, they will receive up to S$9,000 to support their transition,” he adds.
In acknowledgement of these challenges, the recent Fortitude Budget introduced various support measures to help small businesses digitalise. Leveraging on these, coupled with keen forward planning will help businesses prepare for business recovery in a post pandemic world.