Small and medium businesses (SMBs) in Singapore are the most digitally mature across the Asia Pacific (APAC) region, according to the Cisco’s APAC SMB Digital Maturity Index.
The index, which based on research done by research firm IDC, found that Singapore ranked first among 14 APAC countries in terms of digital maturity, as assessed across four categories, namely, technology adoption and application, digital transformation strategy and organisation, processes and governance, and the capability to source, manage and retain the right talent to enable their digital transformation.
IDC surveyed 1,340 people across the APAC region and found that the top investment priority for SMBs in Singapore is cyber security, which accounts for 16.7 per cent, illustrating the importance that local and regional organisations are placing on security as more enterprises undergo digital transformation.
“SMBs in Singapore are often the first to embed digital technologies into the business to amplify their size, presence and competitiveness in the market,” said Tay Bee Kheng, managing director Singapore at Cisco. “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,” added Tay. “Programs 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 digitisation in Singapore through the Cisco Networking Academy,” said Tay. “An IT skills and career building program, NetAcad has helped train more than 64,000 Singaporeans succeed in the digital economy.”
The index classified Singapore SMBs into a “digital observer” stage of digital maturity, which is defined as being one where companies’ digital efforts are heavily focused on process automation to achieve efficiencies.
Furthermore, in addition to cyber security, cloud technology is a top investment category for Singapore SMBs with 12.9 per cent of Singapore-based respondents investing in this area.
The third area where Singapore-based SMBs are investing most capital is with regards to analytics technologies, with 11.2 per cent of respondents listing it as one of the top three technologies they are investing in.
Singapore and China are the only countries in the APAC region where analytics solutions ranks in the top three technology investments.
However, the increased demand for digital transformation has presented its own set of problems, namely around a lack of digital skills and talent, with 16.7 per cent listing a lack of talent as a significant challenge for further growth.
Other challenges included a lack of insight into operational and customer data (16.7 per cent) and lack of perceived value for digital transformation in their industry (13.1 per cent).
The survey also revealed that government initiatives have an impact on SMB digitalisation in Singapore. About 41.4 per cent of respondents say they are aware of government initiatives that support SMBs and have already benefited from them. Whereas, another 52.9 per cent are aware but have not taken part in these programs.
“SMBs in Singapore are aware of the importance of developing a digitally-enhanced business to compete and use technology to improve business decision making around customers’ needs across all industries,” said Bidhan Roy, regional director and general manager of SMB markets and distribution, ASEAN, Cisco.
“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,” added Roy.
“This continuous focus on innovation is key for SMBs to keep driving Singapore’s economic development,” he added.
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 prioritise 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 digitalisation: SMBs should look to gain efficiencies through process automation by leveraging relevant technologies. They should establish policies to standardise processes. As the organisation 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 organisation 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 per cent of SMBs in APAC have started to embrace digitalisation, 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.
The 14 APAC markets surveyed by this index include, Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Thailand, Taiwan and Vietnam.
Furthermore, the SMBs studied come from multiple industries including financial services, manufacturing, construction and resources, public sector, services, infrastructure, retail and wholesale.