SMEs and microenterprises* undergoing forced isolation measures and restrictions during the Circuit Breaker
(lockdown) period have turned to the use of new technologies –
primarily in remote working, meetings and collaboration – in their
business processes, revealed SGTech after surveying companies which
attended the tech association’s Isolation Economy webinars in April.
A
total of 235 companies responded to the survey, with SMEs and
microenterprises representing 92% of participants. The survey polled
responses from participants based on their experience during the first
three weeks of the Circuit Breaker (lockdown) from April 7 to
April 27, 2020. Among the industries represented, 20% came from IT and
related services, 13% were in manufacturing, 12% from the wholesale
trade and 11% in retail. Two-thirds of respondents are business owners
or directors of their respective firms.
In terms of
working from home (WFH) arrangements, 37% of SMEs and microenterprises
said they did not allow their employees to work from home before
COVID-19 hit. On the other hand 43% had previously only allowed their
employees to work from home on exception.
Respondents also had to go through a steep learning curve, as the Circuit Breaker announcement
was made on April 3 that the lockdown would begin on April 7. This only
gave them a few days to prepare their employees. More companies found
the transition easier as the weeks passed, with 49% saying they found
the transition easy by the third week, compared to only 26% in the first
week.
Since implementing WFH arrangements, 79% of
companies now say they have become more knowledgeable about technology
tools. In terms of technology adoption, remote collaboration software
and meeting tools were ranked by 53% of respondents as their highest
priority purchase, followed by 50% for laptops and tablets and 36% for
both virtual private network licences and mobile Internet connections.
“Embracing
new software in existing business is a frightening experience for many
SME business owners and employees as they are used to a certain way of
doing things. The use of video conferencing technology is a positive
sign for SMEs. This experience has forced them to the edge and hopefully
they will now be more receptive to adopting other digital solutions,”
said Ivan Chang, co-opted Councillor for SGTech.
“With
the government requiring that companies continue to allow their staff to
telecommute past June 2, using the right technology solutions can help
SMEs remain efficient, minimise business disruption and improve their
business agility.”
While technology has helped sustain
business processes, 11% of survey respondents say the biggest challenge
remain that some of their work has to be performed on-site or require
face-to face meetings.
At a company level, 17% said
they could only perform 20% of their work or less remotely even if all
tools and resources are available. In comparison, only 22% said that
they are able to perform more than 80% of the work remotely.
Other
challenges cited include the requirement for physical documents and wet
ink signatures, or physical signatures; getting access to
files/services from the in-house network and issues working with people:
slower responses, inability to have on-the-spot discussions, reduced
social interaction and managing/coaching employees.
“Companies
that are suffering the most in moving to a remote work environment are
usually service-oriented and the nature of their business involves high
physical touch points with their clients. Businesses dealing with the
sales of goods that require hands-on experience, such as premium or
luxury goods – where basic online platforms cannot replace the buying
experience – have also suffered,” said Chang.
“Aside
from service-oriented businesses, manufacturing has obviously taken a
hit as production lines cannot be replicated at home.”
“The
challenges these companies face are real and there is an aspect of
connection in our interactions with our customers and employees. However
we believe there are opportunities in every sector. SMEs would need to
think outside the box and see how they can do more with less. The move
to work from home as a result of the pandemic can have a lasting impact
on how businesses operate in the future. Those that figure out how to
replicate this connection, using technology, will reap benefits,” added
Chang.
Since the onset of COVID-19, 88% reported that
they have experienced a slowdown and saw revenues drop, compared to 4%
who saw revenue increasing. A similar high proportion of 80% say their
business models have been adversely impacted. The majority, ranging from
71% to 90%, have placed priorities on tightening operational costs and
keeping the business afloat.
A total of 42% of
companies polled said they are considering diversifying or pivoting
their business as their highest priority, while 35% reported that they
plan to seek help or business advice as their top concern.
SGTech
is a premier association for the tech industry in Singapore. It has
close to 1,000 members, and aims to create an ecosystem that anticipates
trends and develops sustainable initiatives to strengthen the community
and help the industry grow.
*In
this survey, SGTech classifies microenterprises as companies with
annual sales below S$1 million, and SMEs as comprising both small and
medium enterprises with annual sales ranging from S$1 million to S$100
million.
