Digitalisation refers to the process of converting information into a digital format, in which the information is organised in bits. It means taking analog information and encoding it into binary so that computers can store, process, and transmit the information. Today, digitalisation is the way of running a business. It has helped businesses to enhance their business model and streamline internal processes. This will ultimately lead to greater revenues and lower expenses.
As we enter Post Circuit Breaker Phase 2, safe distancing efforts are expected to remain in place. A new normal will emerge globally, where working from home, ordering food delivery, and shopping online is the new way of living. Digitalisation has made this marketplace increasingly competitive especially during the pandemic. A greater number of businesses have shifted or strengthened their e-commerce platforms to adapt to the new post-COVID norms. However, there are still several SMEs that resist digitalisation due to inflexibility, limitations of their business model, or the unwillingness to invest in a new system.
In order to help SMEs adapt to the new normal and stay sustainable, the Singapore Government has introduced several grants such as the Productivity Solution Grant (PSG) ad Digital Resilience Bonus (DRB) to encourage SMEs to go digital. Though only those in the food services or retail sector are eligible for the DRB, almost all SMEs can apply for PSG. Eligibility criteria can be seen from here by Enterprise Singapore.
Is digitalisation necessary for SMEs? Definitely! Here are 3 reasons why:
Optimising Processes and Reducing Workload
There is a range of services in the market that can help SMEs to manage work processes, access databases, and consolidate key applications. With proper integration into the business model, SMEs can better understand and improve their business operations. For example, businesses can store tons of data virtually on cloud storage, generate automated emails, and even carry out business operations with the help of customised software. This will help improve the efficiency of the firm.
In today’s context, digitalisation is not only for MNCs with a large budget, it is now available to all business sizes. SMEs should stay agile and continually upgrade themselves to the current business trends to stay competitive.
Though there may be a high start-up cost, digitalisation will lead to overall cost savings. For example, physical office space is not a need anymore as digitalisation has allowed a firm to work remotely from home while meetings can all be done online. Aside from just computer hardware, minor upgrades such as procuring Microsoft Office 365 lead to time savings as it comes with cloud-based solutions that change the way data was previously managed. This has eliminated the need to save data on hard drives which leads to additional operating costs.
SMEs no longer require a full-time IT staff to manage the IT equipment and organisation’s data systems unless they require more sophisticated and technical expertise. Moreover, software such as Microsoft Office package comes with dedicated helpdesk support that is available online. Cloud-based services also provide quick data recovery, thus this lowers the risk of data loss.
SMEs that just started their journey on digitalisation can adopt simple and packaged solutions. It is unnecessary to invest heavily in technology as operations are less complicated at the initial stage. For instance, SMEs can adopt a digital solution at only one business unit out of a few core business processes and slowly expand to the rest. Employer and employee that are new to digitalisation may need guidance. Without training or support, going digital may seem challenging especially to the older generation. Fret not, as most IT vendors sell their products and services along with training and advisory support.
Now, more than ever is the time to go digital! If you would like to find out more about Singapore’s effort in promoting digitalisation, you may find out more from IMDA.