By Mr Koh Khengwah, founder of Askvisor
The New Normal is Digital - what can SMEs do to prepare
The COVID-19 crisis has accelerated the rate of digital transformation and growth of the Digital Economy. The coronavirus pandemic triggered not one but two crises of an unprecedented scale - a global health crisis and an economic crisis. As borders closed, cities go into lockdowns, and social distancing measures mandated, many small-medium enterprises (SMEs), across the world, have experienced huge drop in revenue, while they continue to incur many operational costs such as rental and employees’ salaries, and losses from perishable supplies. The situation forced businesses and employees to adapt to new ways of operation and work, and consumers, to new lifestyles.
A new normal for many industries is emerging. Take as an example: with wide adoption of work from home and people getting use to video conferencing, post this COVID-19 period, we might see significantly less commuting for work, international travel, large physical meetings and conferences. Travel, tourism, and events industries, which include airlines, transports, hotels, venues and related service providers and suppliers, will need to adapt to an emerging new normal. We have seen some in agile enterprises in the travel industry innovating by tapping digital technologies to offer live streamed walkabout tours or local cuisine virtual cooking classes, and hotels offering digital check-ins for guests.
The lockdown situations in many countries drive substantial uptake of e-commerce and conversion of various traditional face-to-face services to virtual online delivery. Another new normal is the rapid adoption of digital services. First-time users of various digital services skyrocketed. Consumers embraced the benefits of on-demand products and services enabled by digital solutions, from e-commerce shopping for grocery, food delivery, online classes, entertainment, video conferencing to tele-health services. Customer behaviours and preferred interactions have changed significantly, and digital interactions norm is likely here to stay. The New Normal is Digital.
The past few years, I’ve been an active advocate of Digital Transformation to SMEs in Singapore. In the past, many SMEs’ bosses were of the opinion that digital transformation seems “important but not urgent”. With the crisis, many now understand the urgency of digital transformation. Prior to COVID-19 pandemic, I’ve supported a few of my clients to implement B2C/B2B e-commerce and digital branding for their businesses. That have helped my clients sustain their sales revenue amidst the challenging crisis, and position them well for the new digital normal.
To survive and grow in the digital economy, where technology driven disruptions are common, there is no other way but to re-invent. The only sustainable advantages one can have are being agile and innovative. No more an era whereby one can rest on a “success formula” to sustain a business for 20-30 years. SMEs will need to be able to innovate on new products, services or/and business models. Design Thinking, Agile Scrum and Lean Startup are a few innovation methodologies that I’ve been a practitioner for many years and which I shares with and coach my students as well with my consulting clients on.
Regardless of which industries your business operates in, it will be inevitable to embrace use of digital technologies and digital transformation. Digital transformation goes beyond just the adoption of digital technologies, it is the transformation of a company’s competencies, culture, priorities, processes, products, services and business models to fully leverage the opportunities brought about by digital technologies, the fast growing digital economy and the new digital normal.
To transform from a traditional SME/organisation to become a digital enterprise/organisation doesn’t happen overnight in a single step. Digital transformation is not something to simply assign to the IT department to undertake, it takes commitment from both the leadership team and all employees. A piece-meal approach in digital transformation for SMEs would not deliver the desired transformational results. When all levels of a company’s leaders and employees recognise the urgent need to transform in order to survive, only then will it takes proactive steps to implement digital transformation throughout the company.
Traditional SMEs may not be able to attract tech talents to join as employees to support their transformation. What these SMEs can considered is to collaborate with technology companies and partnership with tech startups. Many tech startups lack in-depth understanding of market needs and pain-points and also lack the marketing channels for their products/services, gaps which established SMEs are able to fill. A mutually beneficial collaborative partnership will help both SME and startup to expand.
In places such as Singapore, there are also various government grants and schemes to encourage SMEs to go digital, embrace digital transformation, and to innovate. Funding are available to support adoption of various digital solutions, from POS, CRM, e-commerce, e-payment, manufacturing execution system to data analytics solutions. Funding from government agencies are available to engage consultants to support process redesign, automation and new product development for innovative products/services.
To prepare for the digital new normal, small-medium businesses will need to embark on digital transformation the soonest possible. A typical Digital Transformation Pathway will consists of a few stages:
• In stage 1, a strategic business review is conducted to assess what will be their business strategy to address the new normal and draft a company-specific Digital Transformation Roadmap
• Next is to evaluate and implement relevant ready-made digital solutions that can enable the company to modernise various operations, improve productivity and collect data
• Companies can explore ways that e-commerce marketplaces like Amazon, Alibaba, Etsy, Zazzle etc can help them to expand internationally; and capitalise on big data of social media platforms like Facebook, Instagram and WeChat to reach out to targeted customer with specific personas, build branding and generate customer leads
• In stage 2, training and coaching on agile and lean management will support transforming the company’s outdated, bureaucratic processes, and move the company towards a more experimental, data-driven decisions making, “fail fast, learn fast” and innovative mindsets and culture. By adopting a lean, agile management approach, companies can be nimble and able to seize emerging opportunities with fast decision-making
• Aims to be able to leverage new digital technologies such as data analytics, big data, artificial intelligence (AI), Internet-of-things (IOT), and robotics to keep operations lean and efficient, and to enable data-driven business decision-making
• Build a learning organisation that’s constantly upgrading knowledge and skills so that it can stays current with market demands, harness power of new technologies and methodologies, attract talents and become industry leaders
• In stage 3, build a culture of innovation, listening closely to and empathise with customers’ needs, constantly experimenting and driving new innovations in business models, products and services, to open out new income streams and markets
SMEs who are agile, lean and prioritising innovation have a good chance, to not just survive, but to thrive in the digital new normal.
About the writer:
Khengwah Koh runs Askvisor, a boutique management consultancy practice, that helps family businesses, small-medium enterprises to capitalise on innovation, digital technologies, agile and lean management to enable digital transformation of their businesses.
Askvisor has helped clients across wide ranging sectors, including FMCG, Software, Education, Professional Services, Manufacturing, Distribution and Retail, to innovate on their business models/products/services, to adopt digital tech solutions, to embrace agile and lean management, to utilise digital branding, digital marketing for business development, and data analytics for decision making.
You can connect with Khengwah Koh via LinkedIn.