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SME digitization and why it matters to all

Published on October 28, 2017

SMEs: Across nations, they make over 30% (sometimes 60%) of the GDP, employ over half to two-thirds of the population, and represent about 90% of the businesses/professionals. These numbers are staggering and significant.

Simply put, close to a billion people in the world today are employed outside of the multinational corporation (MNC) world. This segment matters to the governments and policy makers, infrastructure and other service providers, MNCs, and people at large. So, let’s try to understand this segment better.

What comes to your mind when you think of SME?

We asked people, and got some interesting answers: mom-and-pop shop, local café, hairstylist, neighbourhood grocery store, plumbers and service sector.

Yes, these are SMEs, but so are the new businesses. New start-ups are looking to disrupt the logistics, modern design, advertising and media, as well as technology providers to businesses (MNC and SME).

While it’s easy to segment all these businesses in a category (as an SME), their behaviour, DNA and capabilities vastly different.

We studied over 150 SMEs across Singapore and Southeast Asia and envisioned 3 common trends:

1.      Highly cost-conscious

2.     Technology laggards – a vast majority of the traditional SMEs, and a number of the ‘newer’ SMEs fall in this segment. There are a few reasons for this, worthy of a full follow on post (and comments debate)

3.     High attrition: They see a heavy churn of employees, and engage transient (e.g. contract) models heavily to manage their ongoing operations

At a high level, these seem obvious. But do we design and implement policies, transformation initiatives and technology solutions with these in mind?

‘Digital Transformation’: Distilling the buzz word

CRM and ERP tools, and marketing solutions are the most common products pitched to an SME. Hosted on a cloud – hence easy to procure, deploy and pay for as SaaS – these define what ‘Digital Transformation’ entails today. At least from the view of SME service providers.

These are big markets – each sized to be 20B+ market opportunity.

What’s your personal experience – either as an SME or SME service provider? What does Digital Transformation mean to your SME? Who are their preferred partners on this journey? What do they care for most? And why would they choose to implement/not implement a solution?

This is crucial to understand, as it leads to our next question – Where in the technology adoption curve is an SME, and how do you engage in the ‘Digital Transformation’ of an SME economy?

Please chime in your thoughts. We’ll cover this on our next post.

- Swami Sekar

CEO, See Chat

Linkedin: See Chat