On 28 June 2018, I was one of the panelists at a discussion at Echelon Asia Summit 2018 by e27. The discussion was about “SME digitization: How SMEs can rethink the way they use technology for productivity enhancements and revenue growth”. With Nidhi Gupta (CEO and co-founder of Portcast) as a moderator, it was a pleasure to speak along side with Kevin Fitzgerald (Regional Director at Xero Asia), and Felix Tan (Managing Director at The FinLab).
I personally think that it was an interesting discussion, and I’d like to highlight some questions and answers that I feel many SMEs could relate to.
What are some of the challenges or stories that you want to share in this new economy? Platform businesses, consumers becoming more digitized themselves, etc. What do you usually hear?
Every SME will tell you that above everything else, good talent is critical. That’s something that’s largely globalized now. The most critical one is that SME must figure out what’s their niche, so that can whittle down your organisation from 200 employees down to a core team of 40–50 people that really takes care of the critical functions and automate the rest of the menial, transactional tasks they handle.
What are the key two to three technologies that SMEs should focus on for either productivity enhancement or increasing revenue?
I think that the most critical systems that need to go in first is really anything that collects data. So yes, account systems, inventory systems, CRMs, so on and so forth. Start with data, overlay productivity, automation system and do your business strategy on top. Everything else is an add-on!
How difficult is it when you engage with SMEs to talk about these technologies, when the simple things of productivity is not taken care of?
I think chatbots are one of the few things that falls into the bleeding edge for some organisations. Everyone who has watched Channel News Asia, it talks about how AI will kill all our jobs. The most prominent AI product, the forefront touchpoint that most people see and talk about, would be chatbots. A lot of SME owners will then go home, look up the fastest way on creating chatbots and find a free service that is able to do so and is able to answer up to 200 questions for example. They then put it up on their website and then later feel like the bot fails and pass it off as something that doesn’t work. Yet when we handhold our customers, results happen. For eg. We worked with an SME selling luxury bags, they dumped their e-commerce side the moment chat came about. Why? They realised that with chat, the customers get their 1:1 experience. Of course we do a hybrid of chatbot and human so that problems can be escalated promptly. This actually increased their revenue significantly, so much so that they always come back asking “Hong Ting, what is the next innovation that we can adopt? Can we do some deep learning on our data? We already have integrated Xero, can we analyse if we spend more money in marketing in Cambodia, would it increase our sales?” A lot of it is hand-holding, a process of really understanding what tech can do within the business and architecting solutions that help them.
These kind of challenges that we are talking about — both mindsets and customising the technology to their needs. Do we see them specifically for SMEs or corporates? Do you hear the same challenges for both or is there any difference?
What is an SME now and MNC now? When WhatsApp sold off to Facebook, they had 55 employees. Greatest 19 billion dollar SME. Lines are very blurred. Innovation within the enterprise is about having the will to push through the innovation. There are big companies that innovate and fail despite throwing millions into it. The edge an SME has is that it can take the exact same idea and push through.
For people in the audience who’s starting a company, to reach SMEs, one concrete advice from each of you in terms of how best to engage SME — it could be the sales channel, marketing approach or pricing strategy. Basically, one concrete suggestion on how startups can engage with SMEs better?
Get mentors. Other than that, you need an SME that is willing to walk the journey with you, do design thinking, user discovery, etc. So that your product is really catered for the market, and not what we think they need in front of the computer. Having an organisation that can mentor and co-create that product with you is absolutely critical.
In terms of different SMEs across regions, are they really different across regions?
I’m part of a global organisation, called the Entrepreneurs’ Organisation. It consists of 4,000 SMEs from 150 different countries. We come together and we talk about business. Within the region, we meet 3 times a year and we talk about business. Of course, the biggest problem is always about cash flow. That is why a lot of them are talking about how to raise funds through crypto. Largely speaking, all of the organisations that want to grow are dealing with the same problem — globalisation causes to be disruptive by a bunch of different things. How do you adopt those, how do you get your older employees to remain relevant, and how do you do that while trying to do that while tackling the business’s day to day issues? And there are still your competitors that you need to contend with. I think that it’s important for owners to plug yourself into a group, such as the Entrepreneurs’ Organization where you can share such learnings about how you’re is doing on innovation and you can grow together with your support network.
Is there a minimum size before digitization start making sense for SMEs?
My first startup, we took a while before we started to digitize, because it’s counter intuitive. But yes, we learnt it the hard way. So please, if you’re a starting a company, architect it properly, collect all your data and digitize from day one. Makes your life that much easier!
Many things around SME digitization topics were yet to be covered in the panel discussion. However, feel free to reach out to me if you have any question — I’d be happy to share my experiences with you.
Reposted from Hong Ting’s LinkedIn Article
