As Singapore emerges into a post-pandemic economy, businesses should go beyond adapting and surviving, and move to accelerate structural adaptations which will help to emerge stronger.
In line with this, Budget 2021 has reaffirmed the government’s commitment to digital transformation through funding for new initiatives and existing schemes, such as the Digital Leaders Programme, Productivity Solutions Grant and Economic Development Grant.
A study by Xero revealed that among six markets surveyed, Singapore SMEs leveraged government support at the highest rate (92%) to survive the economic uncertainty posed by the global pandemic. Through the pandemic, many of these businesses have begun chasing ways to become more digital, with 49% of business owners now using cloud-hosted technologies.
Zairyo, a Japanese e-grocer, is one business that has made use of the government’s digitalization grants to streamline admin work and increase productivity. SMEhorizon speaks to Thomas Po, Co-founder, Zairyo and Kevin Fitzgerald, Managing Director, Asia, Xero, on the challenges faced by SMEs in terms of business administration, the technology available to help, and the government support that lowers the barriers for their adoption.
An appetite for Japanese produce
Zairyo is an online gourmet Japanese grocer currently serving households and businesses in Singapore. Intrigued by the interesting and seasonal Japanese produce that could be incorporated into Singapore home dining, their business focuses on importing these ingredients. “It was interesting for us to educate customers and even receive an education from customers and farmers on tips, tricks and information on cooking with Japanese ingredients,” said Po.
However, as any business owner will tell you, the saying “love what you do and you’ll never work a day in your life” doesn’t quite hold true. One challenging area for their business was managing their accounts and other administrative tasks. Initially, shared Po, these were all “managed very manually on Excel sheets.”
“Tracing, tracking, quotations, billings, product price list databases and reconciliation was all done manually with Excel sheets,” he continued. “My partner, Amanda, and I were the only two handling the business back then. It was particularly difficult for her because she’s not great at Excel and I could tell it was a real pain for her when she had to manage any of the finances on it.”
“Since everything was manual, you can imagine how time consuming it was for me to reconcile everything from bank statements to Excel, or from online store to bank statements to Excel. Because the processes were all so manual, we were more prone to human error, which in turn took up time and effort to correct.”
Giving businesses a digital boost
Many of these inevitable burdens can be alleviated by technology. However, digitalisation may seem like a daunting challenge for any SME, and especially for a new, small business already stretched by multiple responsibilities. However help is readily available. As Fitzgerald reminded us, “the government continues to champion SME digital transformation through each successive Budget announcement, further advancing in its Smart Nation vision.”
In particular, the government’s support of cloud adoption enables firms to build up their digital infrastructure through integrating apps, he adds. “Our Xero Small Business Insights report found that SMEs with five or more apps connected to their Xero account experienced smaller revenue losses (33%) and fewer job losses (40%) compared to other SMEs during the pandemic last year.”
“It will be exciting to see how SMEs leverage new government initiatives like the Digital Leaders Programme to facilitate their digital journeys this year. As we’ve seen with the PSG and through many of the accounting partners that Xero works with, SMEs benefit from having an outsourced consultant who advises on technology integration. The Digital Leaders Programme offers this type of support for SMEs, so I anticipate that it will be a valuable initiative.”
SMEs keen to take up assistance
Fitzgerald says that his company’s research indicates strong demand from SMEs for the adoption of government support schemes to digitalise. “According to a Forrester study commissioned by Xero, 92% of SMEs in Singapore leveraged government support schemes during the pandemic, 23% higher than the regional average.”
“Start Digital, for example, which helps new SMEs establish foundational digital solutions by covering adoption costs for at least six months, was a significant facilitator for businesses looking to embark on their digitalisation journey. The government scheme enabled businesses to trial digital solutions and prove the benefits, before having to invest.”
“The Productivity Solutions Grant (PSG) is another important initiative, which has been extended through FY21. The PSG subsidises the cost of implementing technology solutions, equipment, and consultancy services for SMEs with the specific aim of improving business productivity. The grant has been effective for SMEs looking to streamline business processes and increase efficiencies.
Besides these initiatives, SMEs have also shown significant interest in InvoiceNow. “The nationwide e-invoicing system aims to help SMEs to get paid faster by streamlining the invoicing process and creating greater efficiency and accuracy,” said Fitzgerald.
Incorporating technology to lighten the load
All in all, the results of the study suggest a convergence in business owners’ attitudes and government initiatives. “Over the last year, we have seen technology become an even more powerful enabler for business continuity and resilience off the back of the disruption and economic uncertainty created by the global pandemic,” shares Fitzgerald.
“Many SMEs with limited resources have turned to digital tools to streamline business workflows like claims processing, payroll and invoicing. These cloud apps provide SMEs with scalable, affordable and customisable solutions to suit a business’s needs as it grows, without requiring expensive IT infrastructure investment and implementation upfront.”
The benefits brought by technology can be further accelerated through partnerships with an accountant or financial adviser. “Apart from keeping the books, accountants can help SMEs develop a digital transformation strategy to survive and thrive, while providing valuable financial insight leveraging the data flowing through a business’s digitalised financial and operational systems,” advises Fitzgerald.
It was Po’s business partner Amanda who proposed Xero as an accounting solution for the business. To date the platform has helped them by integrating with their business processes, and helping to track invoices and bills, ensuring that finances are up to date. These, said Po, have given them greater control over their backend business processes, reduced workload and human error, and allowed them to focus on other areas of the business such as digital marketing.