A recent survey titled the APAC SMB Digital Maturity Index, released by technology major Cisco has revealed that Small and Medium Businesses (SMBs) in Singapore are the most digitally mature across the Asia Pacific region. Singaporean SMBs were ranked number one among 14 countries from across the region.
The Index, developed by research firm IDC based on an independent survey of 1,340 respondents, looked at digital maturity of SMBs across four business dimensions: technology adoption and application, digital transformation strategy and organization, processes and governance, and the capability to source, manage and retain the right talent to enable their digital transformation.
Taking into account the four dimensions, SMBs in Singapore were classified into the ‘Digital Observer’ stage of digital maturity. The stage is defined as being one where companies’ digital efforts are heavily focused on processes automation to achieve efficiencies.
The level of maturity of SMBs in Singapore is best exemplified by the technologies that they are prioritising with Cybersecurity being the top technology they are investing in at 16.7%. This highlights that they are placing security front and centre of their digital transformation journey.
As SMBs in Singapore become more digital, it is not surprising that Cloud is the top technology they are investing in at 12.9%. This is in line with the trend of cloud adoption across the region as the technology allows SMBs to scale rapidly as and when required and without significant upfront capital investment in IT infrastructure.
SMBs in Singapore are also adopting Analytics technologies, with 11.2% of respondents listing it as one of the top three technologies they are investing in. This highlights that they have a proactive data driven approach in their go-to-market decision making. Singapore and China are the only countries in the Asia Pacific region where Analytics solutions ranks in the top three technology investments.
“SMBs in Singapore are often the first to embed digital technologies into the business to amplify their size, presence and competitiveness in the market. As a result, they are the first to benefit from productivity improvements, efficiency gains and new revenue opportunities. To get ahead, SMBs need to be more savvy with government initiatives that have been set up to support them. Programmes such as SMEs Go Digital are vital in guiding them on relevant digital technologies and skills training. On the latter, Cisco is committed to developing a pipeline of IT talent to support digitization in Singapore through the Cisco Networking Academy. An IT skills and career building program, NetAcad has helped train more than 64,000 Singaporeans succeed in the digital economy,” said Tay Bee Kheng, Managing Director, Singapore, Cisco.
However, SMBs in Singapore are also facing hurdles to digital transformation. Respondents said they are being held back by the lack of digital skills and talent within their organizations (16.7%), lack of insight into operational and customer data (16.7%) and lack of perceived value for digital transformation in their industry (13.1%).
The survey also revealed that government initiatives have an impact on SMB digitalization in
Singapore. About 41.4% of respondents say they are aware of government initiatives that support SMBs and have already benefitted from them. Another 52.9% are aware but have not taken part in these programmes.
Bidhan Roy, Regional Director & General Manager of SMB Markets & Distribution, ASEAN, Cisco added, “SMBs in Singapore are aware of the importance of developing a digitally-enhanced business to compete and use technology to improve business decision making. The exceptional enabling environment in Singapore for innovation and digital transformation, combined with modern, upgradeable infrastructure, means that SMBs can readily take advantage of new innovations as they become available. This continuous focus on innovation is key for SMBs to keep driving Singapore’s economic development.”
The Index suggests the following recommendations that can accelerate the digital transformation journey of SMBs in Singapore:
Digital transformation is a journey: It is not a sprint but a marathon. SMBs should constantly access their maturity across the four dimensions and prioritize key initiatives to address gaps.
Invest strategically: SMBs need to have a well-defined digital transformation strategy and roadmap. They need to use this as a guide to make strategic technology investments, ones that help them address their key challenges and leverage specific growth opportunities.
Embark on process automation and digitalization: SMBs should look to gain efficiencies through process automation by leveraging relevant technologies. They should establish policies to standardize processes. As the organization matures in their digital transformation journey, they should leverage data and digital technologies to transform processes, increase innovation rates and gain agility.
Secure buy-in: Change can be difficult, so SMBs need to ensure buy-in from employees and senior management. They need to identify digital champions within the organization and bring them in early to the process. They should leverage these champions to catalyse a culture of change by encouraging collaboration, sharing success stories, and taking calculated risks.
Find a trusted partner: Many SMBs find it difficult to execute on their digital transformation strategy. SMBs should look for an experienced technology partner that brings consultancy and project management services, on top of technology know-how. When deciding, it is important to find partners with experience working with and within the SMB ecosystem.
The Index highlights that more than 60% of SMBs in Asia-Pacific have started to embrace digitalization, driven by improved internet access and growing smartphone ownership. These SMBs are redefining customer experience and expectations, disrupting sectors and in some cases creating entire new ones, while capturing investment and funding opportunities.