With COVID-19 battering bottom lines in 2020, a positive lesson has come to the fore for small- and medium-sized enterprises (SMEs) looking to improve their business profitability.
In the UOB SME Outlook 2021 Study, it was found that two in five SMEs (41 per cent) who had implemented digitalisation initiatives in 2020 experienced stronger revenue growth than non-adopters.
More starkly, those that had digitalised their entire business or multiple areas reported better revenue growth than those that digitalised only one area. In contrast, six in 10 SMEs that did not adopt any digital tools saw a decline in their 2020 net revenue as compared with 2019.
SMEs that have digitalised are also more optimistic about the road ahead in 2021. Three in five (58 per cent) of SMEs who have digitalised said they are expecting revenue to grow this year, compared with just 32 per cent of SMEs among non-digital adopters.
Seven in 10 SMEs that have adopted digital tools also feel more prepared for a post-COVID-19 business recovery, compared with four in 10 SMEs among those who have not yet digitalised their business.
The top benefits of digitalisation have come in the form of higher productivity and efficiency, improved customer experience, and increased coordination across departments.
This makes overcoming the challenges to digitalisation worthwhile. Obstacles indicated include the cost of implementation, cybersecurity concerns, and a lack of digital skillsets among employees.
Mr Lawrence Loh, Head of Group Business Banking, UOB, said, “Digitalisation offers businesses many opportunities, from improving their processes and reaching out to new customers to having a direct and measurable impact on their revenue.
“The UOB SME Outlook 2021 Study demonstrates that close to one in two SMEs who proactively took steps to adopt digital tools last year are already seeing benefits such as greater productivity and efficiency gains, improved customer experience and higher revenue, even in a volatile business environment.
“The digitalisation journey is a long one and we urge SMEs to stay the course to see their efforts pay off when they emerge stronger through the pandemic.”