How digital adoption helps SMEs transform and minimise disruptions in their day-to-day operation during the COVID-19 pandemic.
Low technology literacy has created a digital divide amongst businesses in Malaysia, with the common assumption that SMEs are less likely to access and use the internet when it is massively beneficial for them to do so. According to a report by World Bank Group in 2018, only one in three SMEs in Malaysia have implemented digital transformation strategies, while less than a quarter have a dedicated digital strategy team. Despite being the backbone of the country’s economy, SMEs in Malaysia performed rather poorly in adopting digital changes.
SMEs are also susceptible to the practice of only adopting fundamental technologies for their operation—missing out on the more extensive digital solutions that could ensure their operation to remain robust in the long run. As one of the leaders spearheading digital transformation in various industries, the experts at JurisTech notice that there is an uninformed fear of the change brought on by digitalisation. This is not only specific to SMEs, but also applicable to almost every industry; with most citing ill-suited employees, lack of funding and technology experts for guidance as the reasons they lack the initiatives to start the transformation.
Accelerating the digital transformation of SMEs
Prior to the global pandemic in 2020, there has been a lag in digital adoption in Malaysia behind the global average. The struggle is not only felt by SMEs, but also technology providers, as there is a gap of knowledge differences between both parties. SMEs are afraid to reach out for help due to the perception that the cost will eventually be too taxing for them to run their operation and digital transformation simultaneously, while technology providers find it difficult to penetrate the market with low technology literacy amongst SMEs decision-makers.
However, with the current economic climate and new regulation implemented by the government, SMEs in Malaysia are slowly acknowledging the importance of upgrading their current hardware and software infrastructure—where previously wondering how much would the transformation cost them, it is now a question of “how soon can we digitalise our existing processes?” SMEs now recognise digital adoption would enable them to continuously push through the periods of respective lockdown and semi lockdown, allowing them to remain operational and to create further stability in 2021.
The demand is also spurred on by the need to be paperless and cashless. Besides that, 2020 taught many of us the importance of interpersonal interaction. While the face-to-face interaction was greatly reduced to lessen the effect of the pandemic, it has also speared the movement to innovate existing customer service technologies. An interactive, personalised chatbot is no longer sufficient; SMEs now have to find a way to not only attract and retain customers, but also to create a seamless customer onboarding process. This will help SMEs avoid drop-offs, increase customer acquisitions, and adhere to the lockdown regulations that are in place.
The new digital transformation program rolled out by MDEC along with encouragement from our government drives the awareness for digitalisation and creates a bridge for many tech companies to offer their expertise to these businesses. SMEs now have a clearer idea of which areas of their operations are direly in need of digitalisation and can create a rising demand for it. This in turn allows technology providers to further enhance the existing features of their products to adapt to SMEs needs, just like JurisTech’s CollectXpress, an invoice-based collection recovery system and Juris Access, a digital customer onboarding platform developed with SMEs in mind.
Acknowledging the need for digital transformation
Although the lockdown restrictions have been gradually lifted to encourage the recovery of the nation’s economy, many SMEs continue to operate remotely, cutting back on physical operation cost and manual processes implementation, allowing them to redirect their resources into upskilling their talents. This signifies a good start in many industries as it accelerates the digital adoption that has not seen satisfying progress in the last few years, as previously Malaysia was behind many of its neighbours in terms of technology utilisation.
Most importantly, this indicates an increase in technology literacy amongst SMEs in Malaysia; as this shows a willingness to explore more extensive digital platforms to be included in their operation to remain relevant in whichever industry they are in. In the upcoming future, we can expect more SMEs will continue to grow alongside the ever-changing technology of today and forming active collaborations with technology providers that allow the development of more digital platforms aligned to their needs without the fear of disrupting ongoing business.
About the author
Nuralia Mazlan is part of the marketing and communications team at JurisTech, a leading Malaysian-based Fintech company, specialising in enterprise-class software solutions for banks, financial institutions, and telecommunications companies in Malaysia, Southeast Asia, and beyond. You can reach out to them at email@example.com