By KOH SZE KEE, ARIF PERDANA, DESI ARISANDI AND LEE HWEE HOON
HOW SINGAPORE SMES FARE
The business world is facing technology disruptions that will redefine business models and strategies. To remain relevant, businesses have been encouraged to embrace digitalisation and transform their business models to utilise technological advancements. Among these innovations are data and analytics, which have become the heart of technological advancement applications. Digitalisation transforms the scale, quality and processing of data. This transformation then produces vast quantities of data that businesses can use to implement data analytics to optimise decision-making processes. Therefore, businesses need to understand generated data and know the ways to utilise advanced technologies to convert data into powerful business strategies.
In Singapore, small and medium-sized enterprises (SMEs) are a vital part of the economy, contributing to about half of the GDP and two-thirds of employment. SMEs are also an integral part of the vibrant ecosystem of Singapore’s industries. With digitalisation transformation, SMEs in Singapore are expected to implement data analytics to gain a strong position in the market.
To support digital transformation among SMEs, the Singapore government has put in place various supportive measures, such as the SMEs Go Digital programme, to help SMEs accessing global markets to transform themselves digitally. Despite these supportive measures, SMEs still seem to lag behind the large companies in big data analytics adoption.
SMEs often encounter challenges in choosing the appropriate technology or getting their staff involved in implementation. SMEs also face certain limitations, such as a lack of understanding of data analytics, cultural barriers and intrinsic conservatism, and a lack of inhouse expertise. While SMEs support the country’s economy through stimulating economic growth, increasing employment, and expanding exports, their adoption rate of data analytics remains lower than that of the large companies.
We (Singapore Institute of Technology), together with RSM Singapore and Institute of Singapore Chartered Accountants, conducted a study to understand the adoption of data analytics among Singapore SMEs. We examined their readiness and technological capability to adopt data analytics, the extent of analytics tasks embraced, the perceived “usefulness” of data analytics, and their reasons for adopting or rejecting data analytics.
RESPONDENT DEMOGRAPHICS AND FINDINGS
A total of 575 SMEs, spanning commercial and professional services, engineering services, and food and beverage services, took part in a questionnaire survey conducted between November 2018 and April 2020. Over 60% of the respondents held senior leadership positions (for example, C-suite, director, manager, head of department, financial controller) in their respective organisations. The majority of the SMEs surveyed had less than S$25 million in annual turnover, and staff strength of fewer than 50.
Of the SMEs surveyed, 72% did not have designated full-time staff to perform data analysis. More than 50% reported having outsourced this function to meet their organisations’ IT needs, while 45% did not have the intention to send staff for data analytics training due to the cost and time required for such training (Figure 1).