The past year has been tough on businesses across the globe, but perhaps especially so for small and medium-sized enterprises (SMEs), who have been left particularly vulnerable in the wake of economic fallout.
A year on, however, things finally seem to be looking up.
The latest SME Index survey by the Singapore Business Federation (SBF) indicates that business sentiment is rising and is now at its highest since the start of the pandemic in the first quarter of 2020. With COVID-19 restrictions easing, businesses have seen a resumption of business activities on a broader scale, and are anticipating rebounds in sales, profitability and an improved outlook overall.
Though the recent resurgence of COVID-19 cases threaten fresh rounds of restrictions that may hinder economic recovery, SMEs are generally finding themselves better positioned to tide through the turbulence than before.
But beyond merely surviving the day-to-day in the near-term, reports indicate that most SMEs are looking further beyond — to capitalize on new growth opportunities and rebuild their business for resilience in the long run. The same survey by SBF indicates that investing in support for remote workforces, business expansion and upskilling employees rank among the top priorities for businesses as they navigate economic recovery.
And if 2020 was any indication, digitization will continue to be a critical enabler for SMEs, propelling them forward in their recovery with stronger revenue growth, increased productivity, and improved business outlook overall.
Yet in the hasty bid to pivot their operations online, many businesses risk missing the point of true transformation, and lack a clear roadmap for their digital plans. Organizations need to understand that transformation is a journey that must be assimilated throughout the business.
While technology will be a huge enabler, it isn’t about buying and adopting digital tools for digitization’s sake. Instead, it is about focusing on solutions that will effectively position the business to thrive in a new era. In the face of a global pandemic that has already shuttered many small businesses, these strategic digital moves aren’t just critical for businesses to survive today — it can be a crucial differentiator that ensures longevity.
The road to recovery is paved with agility
SMEs are in the best position to lead the way forward in digital ingenuity, possessing many attributes that give them a natural edge when navigating the challenges ahead.
The modest size of a SME is one of its great strengths. Anyone who has been kept awake all night by a buzzing mosquito knows that an opponent doesn’t have to be big to wreak havoc — the same is true in a business landscape rife with disruption. SMEs can be highly agile, nimble, and ‘fly under the radar’ as they challenge market leaders with targeted product launches and offerings, tailored to meet changing consumer demands and emerging trends in the market.
Furthermore, a lack of corporate red tape, long approval cycles and multi-level decision-making processes means that SMEs can release new products or offerings at rapid fire speed, pivoting to new product directions or new markets with more ease than their multinational corporation (MNC) counterparts.
Conversely, SMEs need to be vigilant in avoiding purely reactive, knee-jerk reactions that skip due-diligence research. After all, jumping between too many changing priorities can distract from and dilute the strategic focus of the company. To safeguard against this risk, SMEs can speed up smart decision-making by investing in analytics software, which leverages predictive science to produce data-driven insights, that can help SMEs formulate calculated, intelligent decisions.
SMEs tend to be creative problem-solvers, with innovative ideas, workarounds, and game-changing concepts at the core of their business. And when cornered in the market or driven to transform an industry, products or processes, SMEs are bold change-agents, unafraid to take risks and pilot new endeavors.
Times of crisis can also present new opportunities for growth, should businesses choose to seize it. SMEs need to leverage the downturn to pivot and find new ways of working, source new solutions, streamline workflows, create new products and refine existing ones. Software solutions, like Product Lifecycle Management (PLM), can help manage speedy innovation and product development in this arena, while government grants and solutions empower SMEs to tap on financing schemes and initiatives in making this shift.
3. Digitally Native and Nimble
Perhaps most importantly, SMEs today are either digitally native, or nimbly positioned to leverage transformative technologies to their advantage. Whether it’s young startups or bigger enterprises, SMEs are no longer stranger to terms like Internet of Things (IoT), automation, Artificial Intelligence (AI) and Machine Learning (ML).
In fact, with increased public sector support to adopt advanced technologies, such as Singapore’s SME Go Digital scheme or Malaysia’s SME Digitization Grant, SMEs are growing increasingly open to embracing ecommerce and online tools to communicate with their stakeholders, work collaboratively and remotely, and optimize and streamline their workflows.
Beyond improving productivity, technology can also be a key enabler in empowering SMEs to meet growing customer demands faster, and more consistently. Today’s customers expect high-quality products and services, with the same level of convenience and detail typically offered by powerhouse retailers and businesses. To meet customer demands, SMEs need to tap on technology to deliver highly personalized products, and offer supply chain management tools that stock the right products at the right place, as well as dynamic pricing science to stay relevant in today’s fast-shifting economy.
The modest size of SMEs also means that they can easily adopt various technologies across their operations and overhaul legacy systems—without lengthy deployment wait times and iterations—to ultimately reap the rewards of their investments faster.
Contrary to what many may believe, SMEs possess many traits that position them to navigate today’s uncertainties well, which can set them up for success in a fast-paced digital economy. Thankfully, modern software serves to amplify these traits with highly configurable and scalable systems that enable SMEs to guard their agility, while providing intelligent, data-driven insights that can inform business opportunities for growth.
More SMEs are now realizing that technology will continue to be indispensable in today’s digital world — the question is, what are they going to do about it?