SINGAPORE - Small and medium enterprises (SMEs) need more help to get past the initial hurdle of embarking on digital transformation, said panellists at the "KPMG Insights from the Inside: Singapore Budget 2019" discussion on Friday (Feb 22) morning.
KPMG Singapore head of enterprise market Jonathan Ho noted a slow rate of technological adoption among SMEs, with the Automation Support Package for large-scale automation projects, for instance, having helped just 300 firms since its launch in Budget 2016. In Budget 2019, it was announced that this scheme would be extended for another two years beyond its original expiry date of March 31, 2019.
On the digital front, SMEs face three barriers to entry, he said. First, awareness among business leaders is "still not quite there". Second, a lack of in-house digital skills might cause SMEs to lack the confidence to adopt digital solutions, with no clear way of choosing among a slew of products and service providers. Third, a sense of "insecurity" about cybersecurity may make firms reluctant to take steps such as moving their operations to the cloud.
Head of technology, media and telecommunications Juvanus Tjandra noted the enduring perception that "digital equals costs". With SMEs tending to focus on the pay-off of revenue versus costs, the digitalisation movement should highlight the possibilities in using technology to improve revenue, instead of only looking at cost savings, he suggested.
One idea proposed by head of tax Tay Hong Beng was for a team of consultants who could help SMEs with an initial assessment of how their business can go digital, providing a general direction for firms to get started. Similarly, guest economist Selena Ling from OCBC Bank suggested that the government business grants portal could provide a checklist or "quiz" which SMEs can use to discover the digital opportunities that would fit their firm.
Friday's discussion also covered issues such as the opportunities for healthcare firms given the rise in healthcare spending and demand, and the shortage of "cyber-professionals" - not least because current cybersecurity efforts seem more focused on the military and home affairs rather than industry, said head of cybersecurity, management consulting Daryl Pereira.
Both the panellists and the audience of some 200 C-suite executives saw Budget 2019 as fairly underwhelming, on the whole. Ms Ling highlighted Finance Minister Heng Swee Keat's point that the Budget should not be seen in isolation but rather in conjunction with the budgets that have come before - but added that, given the large accumulated surplus of some $15 billion, "next year's expectations will probably be even higher".