SMBs need to re-tool to deal with new and emerging business models-and reap new levels of growth
According to the latest report announced in January 2015 by the DP Information Group (DP Info), which provides annual audits and rankings of the performance of the Singapore's corporate sector, the top 1000 SMBs in Singapore have generated S$28.3 billion in sales, a decrease of 8.7 per cent compared to the 2014 rankings. Their combined profit was also down by 0.8 per cent to S$3.4 billion.
The above numbers is indicative of the mounting challenges faced by SMBs in Singapore today, citing rising business costs, primarily manpower and rental costs, as a key barrier of growth. Among the SMBs polled, 44.7 per cent of the survey respondents said that their operational costs have increased by 11 to 20 per cent in 2014 over the previous year, compared to 34.7 per cent in 2013. Meanwhile, the number of loss-making SMBs grew from 114 in 2014 to 130 in the latest rankings.
Contrast that with the performance of Singapore’s top 1000 companies, which have added an additional $1.23 trillion in sales in the last five years – and that puts the spotlight on the need to give SMBs some “major push” and support to help them be more productive and scale up their businesses.
Some bright spots
SMBs account for 99 percent of enterprises in Singapore, undoubtedly playing a significant role in the country’s economy. Hence, as one of the ways to help SMBs, the government announced in 2014, hand outs amounting to S$500 million over three years to help them increase their ICT (infocomm technology) adoption. These initiatives include helping them try out emerging technology for them to respond to new consumer demands, and implement new business models to drive new levels of growth.
Today’s new and emerging business models are more “customer- and data-driven” unlike in the past, which were focused mainly on “cost efficiencies” (volume-driven). The former require the ability to scale to new customer demands across entirely new selling channels (such as across mobile devices) – and provide much better customer experience in the process. This ‘new normal’ is enabled by Cloud ERP, and something SMBs should be looking to consider, especially in view of the mounting challenges they’re faced with.
Cloud + mobility convergence
Cloud provides ubiquitous, on-demand, elastic, self-configurable, cost effective computing. Mobile devices are accessible, and convenient gadgets that now have the capability to access diverse and scalable cloud computing resources, allowing them to receive unlimited mobile application services.
The cloud and mobility convergence is driving today’s Cloud ERP Revolution, ushering in a whole new world of “Involve everyone, everywhere, on any device” that benefit all types and sizes of businesses, especially budget-conscious SMBs because it doesn’t require them to make huge investment in hardware and infrastructure.
The Cloud ERP involves everyone in the organization, harnessing the benefit of having real-time data at their fingertips – from sales and marketing people in the field, to logistics in the warehouse, to delivery on the road, to billing in the office, to after-sales support back in the field, and more – making entire business processes tightly connected and run more efficiently than even before – while leaving happy and satisfied customers. Some of the SMB early adapters of cloud ERP, such as KFC in Singapore and Tan Hiep Phat Beverage Group (THP) in Vietnam, one of the country’s biggest and fastest-growing companies, have been benefiting from it, and never looked back.
Cloud ERP or business management in the cloud allows for seamless implementation of tactical and strategic campaigns, as well as flexibility in implementing pricing strategies on the move. It has also democratized the use of business tools that were previously only limited to management. Unlike before, it allows everyone in the organization to create and access relevant data that enable them to do their work better. For instance, sales and marketing staff are more empowered by using such data as business intelligence for more informed and speedy decision-making while in the field.
Indeed, mobility has become a key catalyst for new and emerging business models. According to a recent study by KPMG, “enabling mobile workforces” nearly tripled from 15% in 2012 to 42% today. The study also finds that one of the top priorities of CIOs planning to use cloud computing in 2015 is to “better enable” their mobile workforce.
Are you ready for the Cloud ERP Revolution that will set new directions to scale up your company without the need for a hefty investment?
To learn more about how you can harness cloud and mobility, Acumatica is having a road show in Singapore on Wednesday, 11 March, at the Westin Singapore. Sign up here to reserve your seat: www.bmi-asia.com/acumatica