At the Singapore FinTech Festival last year, I met a startup that was developing chatbots for companies to track leads and manage sales. The startup looked rather promising, having secured a few customers, angel investments and talented tech personnel in just half a year. But as I inquired further, I realised that many of their target clients, the large business-to-consumer (B2C) corporates, have started developing similar in-house solutions.
Target the small and medium enterprises (SMEs), I suggested. They would have similar business needs, and are less likely to have the necessary resources to develop competing solutions. I was met with a quizzical look.
“SMEs? Will they want such solutions? Can they afford them?”
SMEs and tech solutions – all ready to connect?
That technology solution providers can and should reach out to SMEs should come as no surprise, especially in the face of a growing digital economy. In Southeast Asia alone, the digital economy is projected to generate US$1 trillion in value by 2025, according to consultancy Bain & Co. Bringing the region’s SMEs into the digital economy could raise gross domestic product (GDP) by between US$780 billion and US$1.13 trillion.
With digital slated to be a huge source of profit, SMEs in the region – and the world – are jumping on the digital bandwagon. According to the 2018 ASEAN SME Transformation Survey, 60% of SMEs across Southeast Asia are keen to invest in technology solutions to drive business performance, with more placing urgency on technology spending over conventional fixed assets spending. About one-third of SMEs are already investing in digital expertise, and close to 80% of these investments are in software and services such as mobile app development, management of digital platforms and engaging tech consultants.
Source: 2018 ASEAN SME Transformation Survey
SMEs want to work with the tech community, and are ready to invest in resources to do so.
Take the example of EU Holidays, Singapore’s largest tour agency specialising in tours to Europe and the USA. In 2018, under The FinLab’s Smart Business Transformation Programme, EU Holidays partnered technology startup Novocall to convert web traffic into sales calls. Using Novocall’s lead generation solution, EU Holidays was able to generate an additional 160 leads in just the first month alone, a 17 per cent increase from what they typically get from their website.
Novocall’s call-back solution on EU Holidays’ website. Source: EU Holidays
Another example is PW Tech, a distributor and importer of valves and pipe products in Thailand. Against the backdrop of Thailand 4.0, the two owners of PW Tech were keen to deploy technology to resolve inefficiencies in business processes. They found the solution in BizSmart, a suite of integrated solutions for users to manage multiple core processes like customer relationship management, sales, payroll and accounting. Using BizSmart, PW Tech moved information that was previously stored in spreadsheets and files to a cloud-based system, allowing staff to access the information at any time with any device. PW Tech has also managed to smoothen purchase workflows, keep track of orders and store data securely.
Digitalising PW Tech’s business with BizSmart. Source: UOB BizSmart
EU Holidays and PW Tech are but just two examples of how SMEs in our region are increasingly adopting digital solutions in their businesses. These solutions are largely business-oriented, and include online ecommerce solutions, content and database management, enterprise resource planning and business intelligence. This is perhaps unsurprising, as SMEs have typically been cautious in adopting cutting-edge applications, opting instead to focus on solutions that will help them grow sales and reduce costs – the two areas with greatest impact on their business.
But all is not lost for cutting-edge applications. While SMEs might be more inclined towards business-oriented applications, new technologies such as internet of things (IOT), artificial intelligence and robotic process automation are beginning to catch the imagination of more forward-thinking SMEs. These SMEs have already seen encouraging results from applying these technologies in their businesses.
Acepac International and Lih Ming Construction, both based in Singapore and operating in the business-to-business (B2B) space, come to mind. Acepac International is a provider of packaging and warehouse fulfillment services, while Lih Ming Construction specializes in underground utilities construction. Under The FinLab’s Smart Business Transformation Programme, both companies partnered Australian-based IOT startup Spotto to manage and keep track of their assets through electronic tags, readers and apps. With Spotto’s IOT solutions, Acepac International can now track the locations of their packages more accurately and efficiently. Lih Ming Construction is also able to better manage, locate and track their equipment under ground. The next goal for both B2B companies – raising productivity through increased efficiency – is closer to being realized.
Lih Ming Construction (left) and Acepac International (right) – stronger teams after optimising business processes with Spotto’s IOT solutions
Driving digitalisation by creating connections
Operationally and strategically, our SMEs can become a lot stronger with digital adoption. However, with little experience and few connections with the tech ecosystem, many SMEs struggle to find the ‘right’ tech providers to help them transform digitally. Concurrently, finding new customers is a challenge for the tech community, with customer acquisition cited as a top concern in EY’s ASEAN FinTech Census 2018.
Seen in this light, it is insufficient to simply call for SMEs and tech solution providers to work together. Growing both our SME and tech communities requires that we create avenues for both parties to meet, connect and embark on pilots with one another.
The FinLab, an innovation accelerator by United Overseas Bank (UOB), is doing just that – creating platforms to connect SMEs with tech solution providers. Last year, it rolled out Southeast Asia’s first Smart Business Transformation Programme in Singapore, where 11 SMEs were matched with suitable tech solution providers to transform their businesses, and get help in selecting the suitable solutions and implementing the first few pilots to assess suitability. Following its successful run, The FinLab – through UOB’s network – is bringing the programme to the region, starting with Thailand.
The FinLab is currently on the lookout for tech solution providers that are keen to work with SMEs in ASEAN. If you are one of them, reach out now by applying here.
Launch of The FinLab’s Smart Business Transformation Programme in Thailand, in partnership with UOB (Thai), the Digital Economy Promotion Agency, National Science and Technology Development Agency, and the Office of SMEs Promotion.
As Industry 4.0 unfolds, and with SMEs increasingly jumping on the digital bandwagon, the time is ripe for the tech community to pitch, reach out and sell to SMEs. The startup that I spoke with back at the 2018 Singapore FinTech Festival seemed to have realised that. Last month, I came across a status update on LinkedIn by the co-founder, who announced that they have successfully onboarded six European SMEs. My first comment – that is certainly worth celebrating. Hopefully, we will be able to say the same to more tech startups in our region.