Almost 70 per cent of small and medium-sized enterprises (SMEs) have yet to adopt data analytics, with many of them familiar only with spreadsheets and databases, suggesting a lack of awareness and understanding of advanced data analytics.
That is according to a study by the Singapore Institute of Technology, RSM Singapore and the Institute of Singapore Chartered Accountants, released on Oct 15. They surveyed 575 SMEs - from sectors including commercial and professional services, engineering and real estate - between November 2018 and April this year. About 65 per cent of those surveyed have an annual turnover of less than $25 million.
The study found that of the SMEs yet to adopt data analytics, about half have no intention to do so in the future. These respondents' top concerns included data protection and privacy, limited financial resources and the lack of information systems infrastructure support.
In addition, such respondents are familiar with only Google Sheets and Microsoft Excel. Their knowledge of data analytics comes largely from the Internet and word of mouth.
"Sharing of success stories and providing real-life examples on how potential monetary benefits can be achieved with data analytics adoption can be considered," the study suggested.
"As success stories spread among the SMEs, more of them may be encouraged to consider embracing data analytics as part of their business model."
The other companies that had yet to adopt data analytics indicated that they may do so in future and cited government support as the chief driving factor. Other key drivers were to do with the ease of implementation and performance expectations.
The report noted that although government support via grants is widely available, some SMEs face difficulty tapping them. This is because some financial assistance schemes may require the firms to first provide upfront funds to implement digitalisation transformation.
For this group of firms, their knowledge of data analytics comes largely from the Internet and seminars or workshops.
"As these SMEs are open to learning about how data analytics can benefit their organisations, having a shared services platform that these SMEs can tap could be very useful in keeping costs down," the report also suggested.
Such a platform could be set up with consultants to provide different levels of data analytics capabilities, from the basic to the advanced.
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1 in 2 Proportion of the 70 per cent of small and medium-sized enterprises surveyed that have yet to adopt data analytics which report having no intention to do so in the future.
THE BUSINESS TIMES
