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Understanding SME Digital Needs

By Yu QingYao

· Interview,Singapore,SME,Digitalisation

Small and medium enterprises (SMEs) are at the heart of Singapore’s economy, employing two thirds of our workforce and contributing nearly half of Singapore’s Gross Domestic Product (GDP). With digital technology transforming every sector of Singapore’s economy, it is essential that we ensure our SMEs make the most of digital technologies to improve operations and generate new revenue.

Going digital means using technology for a variety of business processes ranging from sourcing, invoicing and decision-making and payment to lead generation, market growth or expansion and partner collaboration.

SourceSage aims to provide a comprehensive view of the digital needs of SMEs in Singapore and to identify the gaps that the industry faces which the government is able to fill in.

Importance of Going Digital for SME

With constantly changing business landscape, increasing market competition, shifting customer needs, companies which do not embark on the digitalisation wave, are likely to lose their competitiveness, and even see their businesses become redundant in the long run.

Today it becomes more and more pressing for SMEs in Singapore to harness the opportunity for going digital. Here are the main reasons why:

  • Ensuring cost-effectiveness
  • Building brand awareness
  • Maintaining customer relationships
  • Leveraging on government support
  • Increasing ROI

Trends, Challenges, and Opportunities of Going Digital

A crisis is a terrible thing to waste. - Paul Romer

From our secondary research, we recognised that the main challenge for SME owners to take on digitalisation is their mentalities. Company owners generally understand that digital change in coming and they need to react but they underestimate the urgency of it. They also lack transformation capacity, which is the luxury of manpower and time to kick start on the process, leaving them helpless. Despite government offering grants, the long, costly and often tedious application may have caused the solutions to become less effective or even worse when approved. There came the opportunities for government and big corporations to come in and help the situation. Government could set up campaigns to educate the public and further streamline the funding processes.

Government Support

Singapore government announced SMEs Go Digital at Budget 2017 to help SMEs build stronger digital capabilities to seize the opportunities for growth in the digital economy.

SMEs can turn to SME Digital Tech Hub to receive specialised advice, get subsidised pre-approved techonology solutions from IMDA and use foundational and competitively-priced digital solutions under the Start Digital initiative, launched by IMDA together ESG. The government has also came up with sector-specific Industry Digital Plans (IDPs) to provide SMEs with an easy-to-use, step-by-step guide on the digital solutions to adopt at each stage of their growth.

Digital Solution Provider Targeted at SME

Source: Yu QingYao from SourceSage

There does not appear to be too large a shortage of companies aiming to assist SMEs with software geared towards automating business practices or digitising otherwise manual tasks like payroll. However, there do exist a deficiency in services providing automated marketing, payment transaction platforms as well as cyber security. In addition, many SMEs are still using outdated technology (more than five years old) which leaves them vulnerable to security threats. The security of company and customer data is a prevalent concern in Singapore. Singtel and Tech Security are the in demand leaders in providing these services to SMEs but because of costs not all businesses adopt these important precautionary measures.

Non-Digital Key Stakeholders for SME

There are many big companies out there in the market that are supportive of the initiative of helping SMEs to go digital. The three local banks in Singapore; OCBC, DBS and UOB have all joined Start Digital programme and each has curated a suite of digital solutions suitable for new SMEs. Besides it, the banks have also come up with other innovative solutions to go beyond banking in order to build an ecosystem that SMEs can tap on to fulfill their growth ambitions, for eg, DBS's SME Connect and UOB's monthly digital clinics.

Telecommunication industry representatives; Singtel and Starhub have joined in the Start Digital programme as well. Southeast Asia's leading ride-hailing platforms; Grab and Gojek have both joined in the combined effort of helping SMEs to go digital. One of Grab's efforts is its newly launched SME lending and micro-insurance services. There are many other key stakeholders who have played a part in this national effort, including Fairprice, Microsoft and Carousell.

Primary Research Findings

The team has conducted interviews with a total of 19 SMEs from a wide range of industries, including e-commerce and consulting services.

Source: Yu QingYao from SourceSage

To sum it up, the commonalities and notable disagreements from the interviews are identified and listed as below:

Source: Yu QingYao from SourceSage

SMEs generally have an awareness on the importance of going digital and are on the look-out for new technologies that can help them build a more efficient and robust business. They have also found B2B platforms such as 99%SME B2B platform to be useful. However, some difficulties they faced along the way may have prevented them from going further.

  • Lack of manpower and time
  • Fear of the uncertainty when technology fail
  • Resource allocation is a problem
  • Financing is a problem
  • 'If it ain't broke, don't fix it.' mindset
  • Catching up with legal system is stressful
  • 'Try before you buy.' mindset
  • Employees resist on taking up digital processes


Source: Yu QingYao from SourceSage

  • Provide cross-border payment and logistics solutions at low cost
  • Provide logistics services that allows large orders
  • Long term contract for logistics services at low cost
  • Special arrangements for delivery men to have some knowledge of delivery content
  • Have sellers to be seen together with their competitors on 99%SME B2B platform

Source: Yu QingYao from SourceSage

  • SMEs have feedback that they face credit limits with their existing bank service, in addition, there is a fee charged for every transaction. Some also mentioned there could be more automation process in the system. 
  • Enterprise e-wallet solutions are thus welcomed and it is important to instill public confidence in it

Source: Yu QingYao from SourceSage

(with 4/14 SMEs choosing two options and the rest choosing only one option)

  • We do see that there are still gaps in the market and SMEs not having all their needs met. Digital solution providers may enter the market to fill up the gap.


Looking forward to this for a long while, my SME customers have been waiting for such system to improve productivity, traceability and reducing these cost. Thank You!! - Patrick Tan, Director of KEEPITAL

Both secondary and primary research findings agree that the main challenge faced by SME owners to take on digitalisation is their lack of manpower and time required to kick start on the process. This challenge could be eased with 99%SME B2B Marketplace which links businesses to a ready community of corporate buyers by providing an additional platform to showcase their products and services, SMEs can now market and scale their business in the B2B space. 89.4% of those interviewed expressed their interest in purchasing from 99%SME B2B Marketplace. SME owners have also feedback that logistics services out in the market are too expensive, 99%SME B2B Marketplace partners with DHL to provide reliable and affordable logistics services.

Under Digital Solution Provider Targeted at SME, we have discussed that there exists a market deficiency in services providing automated marketing, payment transaction platforms as well as cyber security. In addition, SMEs have feedback that they face credit limits with their existing bank service. Some also mentioned there could be more automation process in the banking system. With reasons of different kinds, 89.5% of those interviewed have expressed interest in enterprise e-wallet.

Having enterprise e-wallet integrated into 99%SME B2B platform, we can provide 4 out of the 5 solutions needed by SMEs in one goal.

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