While the vision of the 'new normal' after the pandemic is still forming, one thing we can be certain of is that technology is set to play an increasingly critical role in helping businesses, especially SMEs in APAC, achieve success in the future.
According to SAP's new study Digital Resilient, and Experience-driven: How Small and Midsize Organisations Can Prepare for the New Economy, many SMEs in APAC said they have made moderate progress toward digital transformation (39%).
About a fifth (21%) of small and midsize enterprises (SMEs) in Asia Pacific (APAC) said they have made substantial progress or completely transformed. While 19% expect to have completely transformed within three years.
Conducted in collaboration with Oxford Economics, the study which surveyed 2,000 respondents globally revealed that HR and talent management lead technological adoption in APAC SMEs.
The study revealed that in terms of technological adoption, HR/talent management software is furthest along (66%), followed by governance and cybersecurity software (63%) and finance and risk management software (59%). Respondents reported that these technologies are either in use in some applications/projects or are already in use at scale.
Mobile devices and mobile business process enablement, and business management solutions (ERP software) share the top spot in terms of pilot implementation, and APAC SMEs are actively considering emerging technologies, AI/ML and Internet of Things (IoT) as their main investment priority.
APAC SMEs ahead of American and European counterparts in adapting to remote working
The study also highlighted how SMEs in APAC are uniquely positioned to adapt and thrive in the dynamic and distributed post-COVID-19 business environment.
According to the 240 respondents to the series of COVID-19 questions, APAC SMEs are well-positioned to adapt to a remote working environment.
A large majority (77%) reported that they adjusted remote work arrangements for employees in response to COVID-19, as compared to respondents in Europe (75%) and the Americas (71%). At the same time, 61% of APAC SMEs surveyed created remote work set-ups for employees during this period, while 69% invested in IT and collaboration solutions to support remote access and/or online learning.
Interestingly, 10% of APAC SMEs reported that the pandemic has no impact on their ability to accommodate remote work and maintain employee productivity.
Apart from supporting business continuity during this period, APAC SMEs were also found to be ahead of their American and European counterparts in the following areas:
- Actively exploring channels to get their products and services to customers: 66% in APAC, versus 64% in the Americas, and 59% in Europe.
- Developing new products and service offerings: 46% in APAC, versus 40% in the Americas, and 49% in Europe.
Edward Cone, Editorial Director of Thought Leadership and Technology Practice Lead at Oxford Economics, said: "SMEs across the region—like their counterparts around the world—have certain advantages over larger competitors in terms of agility and closeness to the customer."
That said, COVID-19 has significantly impacted APAC SMEs’ ability to compete with larger companies within the same industry, with 45% of APAC SMEs reporting that the pandemic has had a significant effect on their operations and strategies in this area.
The pandemic has also affected SMEs' ability to operate at full capacity (45%), the ability of the supply chains to keep up with demands (40%), and the ability to keep existing customers (40%). Some respondents reported that they had to completely restructure business strategy and operations in these areas to mitigate the impact of the pandemic.
Looking ahead, it's all about the customer for APAC's SMEs
As we emerge from the COVID-19 pandemic, in the next three years, APAC SMEs are prioritising improving the customer experience (40%), growth (38%) and attracting new customers (28%).
Zooming in on their top priority, APAC SMEs believe that the key to providing high-quality customer experience lies in three key areas:
- High-quality products and/or services (70%)
- Fast and convenient delivery (64%)
- Competitive pricing (62%)
When asked about who has the most responsibility for delivering those experiences, a majority (70%) of APAC respondents looked to the customer-service business function.
The study also found that upgrading analytics on customer data was a key strategy companies are adopting to improve the customer experience. About a third (28%) have already done this across the organisation, while another 52% have started to.
It was also revealed that prior to the COVID-19 outbreak, SMEs in the region were optimistic about their long-term prospects, with many expecting to see market share (62%), budget/revenue (76%), the number of full-time employees (59%), and profitability (78%) increase somewhat or substantially over the next three years.
The road to success does, however, bring challenges. Today, APAC SMEs consider the upskilling/reskilling of the current workforce (30%), lack of coordination between different departments (29%), and inability to gain insights from data (28%) as key internal challenges. In terms of external challenges, APAC SMEs cite changing customer wants and needs (40%), competition from larger organisations (39%), and adapting to a rapidly changing marketplace (27%) as obstacles to their business success.
Claus Andresen, SVP & Head of General Business (SME) and Emerging Markets Growth, Asia Pacific & Japan, said: "Today’s new normal requires businesses to pivot and adapt with speed. SMEs in the region seem to understand that the sense of urgency to digitally transform their businesses will give them an advantage through the pandemic and beyond. With the adoption of an intelligent enterprise strategy, SMEs can establish a digital core that will power the entire organisation, embedding data-driven insights and decision-making processes across the business. This is crucial in enabling business agility, further strengthening the ability of SMEs to adapt to dynamic market conditions.”
Photo / 123RF.com