With the escalation in trade tension, the conversations about the recessions have been mounting in the headlines and media of late. As a small and market-oriented economy, Singapore feels it dearly when the sharpest slump in the second quarter of its economic growth in a decade unfolds.
Against this global trade headwinds, Singapore’s slowdown is inevitable. No one knows when the recession will arrive but it’s definitely a wakeup call for the small-to-medium enterprise (SME) to stay alert and persist with transformation efforts in this looming storm but there are still numbers of challenges faced by SMEs in 2019 that need to be solved.
1. Lack of digital tools
According to research conducted by AON, Singapore SMEs are having a hard time to meet customer variable demands due to the failure to innovate. With the speed of change in the global economy and the emergence of new technologies, immediacy and accuracy are winning the customer support race. However, how can it possible for leader quickly to acquire the right skills, experience, and knowledge to cope with this business challenge?
In most of the business, lack of visibility into team member’s skillset often considered as the biggest challenge faced by SMEs when undergoing a transformation— as is lack of time and consistency. These challenges faced by SMEs are best tackled through the use of technology. By adopting enterprise resource planning (ERP) system, leaders can easily asses and build performance team on the fly as it can provide a 360-degree view on how the business performance is. With this robust technology, it helps businesses to be responsive and nimble to the globally volatile world.
Digital is no more an option but it is a necessity to survive in this battlefield of digital age.
The Singapore government has also put so much effort to support SMEs in internationalization by introducing several grants and funding schemes such as Enterprise Development Grant (EDG). The programme under Enterprise Singapore provides customized support for enterprise to internationalize and build deeper capabilities to gain a competitive edge in the digital world, allowing business to get funding up to 70% of qualifying projects. Taking the long-term perspective and targeted approach, these roadmaps are fundamental in enabling SMEs to create the conditions for long-term success.
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2. Lack of digital talents
The factors of increased competition of talent and workforce shortage have become the key challenge faced by SMEs in their digital transformation. Hiring and training the right talents with the required skills set to manage and harness the full capabilities of the digital tool can be a strenuous task for SMEs as business owners hardly have time to implement new ideas to attract digital talents beyond managing their challenges from daily business activities.
Besides looking for digitally capable talent, having people who tightly aligned with company’s value but also eye-to-eye with top management on the mission is also paramount to the business growth and competitiveness.
Digital is a mess. Every day there’s a new acronym and a new tool to understand and utilize with. Therefore, finding a qualified talent who has been involved in sales, PR and e-commerce can have a far bigger picture of the business environment rather than hiring a digital talent which has long experience in just digital-related position.
3. Absence of agility mindset
Many SMEs are still living in the past and working in a traditional methodologies that have found them success previously, leaving them the mentality of ‘If it ain’t broke, don’t fix it’” From a business operational perspective, many business owners may not be aware of the massive advantages of the right technology that would bring to the company’s business growth in the long run.
Yesterday operating models that were once safe don’t win today games. For business owners that eager to thrive in this age of rapid change, they must be bold enough to be the fast-follower to reinvent their business models and embrace technologies.
4. Threats of cyber-attacks
According to a survey, loss of intellectual property is the top 10 challenge faced by SMEs in Singapore. In spite of the high rates of awareness, SMEs are still reluctant to apply cyber protection measures, digital payment offerings and government support based on a survey of QBE Insurance. Survey has shown that 90% of respondents admitted to being conscious about the potential cyber risks but one in four still do not have any internal processes or policies to protect themselves.
The good thing is SMEs are often able to perform greater agility and flexibility compared to larger organizations, which offers them a competitive edge. As part of digitalisation effort, SMEs should be more vigilant and take steps to implement their cybersecurity defences and ensure that there is a comprehensive recovery strategy that is effective against the evolving cyber threats.
Singapore has a vibrant SME ecosystem underpinned by government support. Besides the ease of doing business, having access to business investment not only from Singapore but from other parts of the world also make it as one of the ideal places to do business. SMEs should leverage the region’s availability of resources and collaborate further to create a more thriving and pro-business environment. As the disruptive pace only going to be faster, the government has already highlighted the need for Singapore to find ways to embark on the digital journey to innovate and internationalize. Now, are you going to take the leap?
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