Conducted in collaboration with Oxford Economics, the study also delved into the priorities, challenges, and digital maturity of SMEs in the Americas, Europe, and APAC. A section detailing answers from 240 respondents on the impact of the COVID-19 pandemic was also added to the survey mid-fieldwork.
According to the 240 that responded to the series of COVID-19 questions, APAC SMEs are well-positioned to adapt to a remote working environment. They have taken swift actions to implement and adjust remote work arrangements for employees in response to the onset of the COVID-19 pandemic. Seventy-seven percent reported that they adjusted remote work arrangements for employees in response to COVID-19, as compared to lower numbers from Europe (75% of respondents) and the Americas (71%).
Additionally, 61% of APAC SMEs surveyed created remote work setups for employees during this period, while 69% invested in IT and collaboration solutions to support remote access and/or online learning. Interestingly, 10% of APAC SMEs reported that the pandemic has no impact on their ability to accommodate remote work and maintain employee productivity.
In Singapore, SMEs said they adjusted remote work arrangements for employees (73%) and invested in IT and collaboration solutions for remote access or/and online learning (73%) as one of the top reactions to COVID-19. They also said the ability to accommodate remote work and maintain employee productivity (55%) had a 'minimal effect' or 'moderate effect' on them. COVID-19 did not affect the remote working abilities of 14% of SMEs in Singapore.
“SMEs across the region—like their counterparts around the world—have certain advantages over larger competitors in terms of agility and closeness to the customer,” said Edward Cone, Editorial Director of Thought Leadership and Technology Practice Lead at Oxford Economics.
“Yet even before the pandemic, SMEs in APAC also faced meaningful challenges in keeping up the pace of digital transformation.”
Prior to the COVID-19 outbreak, SMEs in the region reported being optimistic about their long-term prospects. Looking ahead to the next three years, APAC SMEs are prioritising improving the customer experience (40%), growth (38%) and attracting new customers (28%). APAC SMEs believe that the key to providing high-quality customer experience lies in high-quality products and/or services (70%), fast and convenient delivery (64%) and competitive pricing (62%), with the customer-service business function bearing the most responsibility for delivering those experiences (cited by 70% of APAC respondents).
Upgrading analytics on customer data is viewed as a go-to strategy to improving customer experience: 28% already have done this across the organisation, and 52% have started to.
With technology set to play an increasingly critical role in helping APAC SMEs achieve business success in the new digital environment, the study also took a closer look at digital maturity levels of these businesses across the region.
APAC SMEs say they have made moderate progress toward digital transformation (39%), and 21% have made substantial progress or completely transformed; within three years, 19% expect to have completely transformed. Their biggest IT functions challenges as the organisation grows are 24x7 service availability (55%) and cybersecurity (51%).
In terms of technological adoption, HR/talent management software is furthest along (66%), followed by governance and cybersecurity software (63%), then finance and risk management software (59%). Respondents reported that these technologies are either in use in some applications/projects or are already in use at scale.
Mobile devices and mobile business process enablement, and business management solutions (enterprise resource planning or ERP software) share the top spot in terms of pilot implementation, and APAC SMEs are actively considering emerging technologies, artificial intelligence/machine learning (AI/ML) and the Internet of Things (IoT) as their main investment priorities.
When it comes to automation investment, the majority of SMEs are already using automation in some applications/projects (36%). The top business functions that see major or substantial investment in terms of automation and digital processes in APAC are:
- Customer service (56%)
- Enterprise management/operations (48%)
APAC SMEs further consider the top benefits of automation and digital technologies to be:
- Increasing process efficiency by reducing error, risk and cost (44%)
- Increasing productivity through transformation and intelligence process automation (43%)
However, APAC SMEs consider the inability to gain insights from data (28%) as a key internal challenge.
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| Source: SAP. Andresen. |
“With the adoption of an intelligent enterprise strategy, SMEs can establish a digital core that will power the entire organisation, embedding data-driven insights and decision-making processes across the business. This is crucial in enabling business agility, further strengthening the ability of SMEs to adapt to dynamic market conditions.”
“I am confident SMEs in the region will be able to emerge stronger, having forged closer bonds with customers and employees while developing innovative services and products that will put them on a strong growth trajectory as the world economy recovers,” he concluded.
Three tips from SAP to help SMEs thrive in the new normal are:
Organise for agility
Coordination across the business—facilitated by rapid communication and information-sharing—can help SMEs respond to challenges quickly and effectively.
Put people at the centre
Business processes, organisational structures, and digital investments should all support customer and employee engagement, whether through real-time insight into wants and needs, or innovations that improve convenience and quality.
Become data-driven
Analytics for decision-making can transform every aspect of operations, from insights that affect supply-chain sourcing to alerts that support predictive maintenance after sales.
SAP aims to help every business run as an intelligent enterprise with its enterprise application software leveraging machine learning, Internet of Things (IoT), and advanced analytics technologies. Seventy-seven percent of the world’s transaction revenue touches an SAP system.
*Oxford Economics and SAP surveyed 2,000 senior executives from small and midsize organisations across 19 countries and industries. Each respondent organisation in our survey reported annual revenues or budgets ranging from under US$10 million to US$1 billion, as well as employee headcounts below 1,000. In India, some respondents employ more than 2,000 employees.
Of the 2,000 respondents, 832 respondents were from APAC, in the following markets: Australia, China, India, Japan, New Zealand, Philippines, Singapore, and South Korea.
The survey was administered via a mix of computer-assisted telephone interviewing and online links between February 27 and April 30, 2020.
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