Singapore SMEs transitioning to Work From Home and adopting new technologies, but face challenges in deploying remotely
• The majority of SMEs and microenterprises have placed priorities on tightening operational costs and keeping the business afloat, with some considering diversifying or pivoting their business due to the impact of COVID-19
Press Release & Survey Findings (PDF)
SINGAPORE – 1 June, 2020: SMEs and microenterprises undergoing forced isolation measures and restrictions during the Circuit Breaker period have turned to the use of new technologies – primarily in remote working, meetings and collaboration – in their business processes, reveal a survey by SGTech with companies who 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 per cent of participants . The survey polled responses from participants based on their experience during the first three weeks of the Circuit Breaker from April 7 to April 27. Among the industries represented, 20 per cent came from IT and related services, 13 per cent were in manufacturing, 12 per cent from wholesale trade and 11 per cent in retail trade. Two-thirds of respondents are business owners or directors of their respective firms.
In terms of working from home (WFH) arrangement, before COVID-19, 37 per cent of SMEs and microenterprises said they did not allow their employees to work from home, while 43 per cent had previously only allowed their employees to work from home on exception.
The respondents also had to go through a steep learning curve, as the Circuit Breaker announcement was made on April 3 and only gave them four days to prepare their employees. More companies found the transition easier as the weeks passed, with 49 per cent saying they found the transition easy in the third week, compared to only 26 per cent in the first week.
Since having to implement WFH arrangements, 79 per cent of companies say they have become more knowledgeable about technology tools.
In terms of technology adoption, remote collaboration software and meeting tools were ranked by 53 per cent of respondents as their highest priority purchase, followed by 50 per cent for laptops and tablet computers and 36 per cent 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 per cent 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 per cent said they could only perform 20 per cent of their work or less remotely even if all tools and resources are available. In comparison, only 22 per cent said that they are able to perform more than 80 per cent of the work remotely.
Other challenges cited include the requirement for physical documents and wet ink 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 Mr 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 Mr Chang.
Since the onset of COVID-19, 88 per cent reported that they have experienced a slowdown and saw revenues drop, compared to 4 per cent who saw revenue increasing. A similar high proportion of 80 per cent say their business models have been adversely impacted. The majority, ranging from 71 per cent to 90 per cent, have placed priorities on tightening operational costs and keeping the business afloat.
A total of 42 per cent of companies polled said they are considering diversifying or pivoting their business as their highest priority, while 35 per cent reported that they plan to seek help or business advice as their top concern.
1 In this survey, SGTech classifies Microenterprises as companies with annual sales below $1 million, and SMEs as comprising both small and medium enterprises with annual sales ranging from $1 million to $100 million
SGTech is the premier association for the tech industry in Singapore. Within a rapidly evolving technology landscape, SGTech strives to create an ecosystem that anticipates trends and develops sustainable initiatives to strengthen the community and help the industry grow.
SGTech’s close to 1,000 members range from innovative start-ups, vibrant small and medium-sized enterprises to top multinational corporations that leverage technology as a core driver of their business.