How SBF Helps Prepare Businesses For A Digital Economy
Preparing Businesses for a Digital Economy
In an increasingly volatile and uncertain economic landscape, many Singapore businesses have to deepen their digitalisation efforts to remain resilient and relevant.
Based on the Singapore Business Federation’s (SBF) National Business Survey 2022/2023 of 931 companies, businesses continue to benefit from digital transformation, citing increased productivity (54%), operational optimisation (48%), and reduction in operational costs (44%) as the core benefits.
Businesses that prioritise and embrace digitalisation as an integral part of their strategy can take advantage of the digital economy and maintain their competitive edge.
Tapping Technology for Transformation
With small and medium-sized enterprises (SMEs) accounting for 99% of enterprises and contributing almost half of Singapore’s GDP, it is pivotal for them to identify, access, and optimise digitalisation resources to speed up their transformation journey as we shift towards a digital economy.
While many of these SMEs acknowledge the pressing need to embark on digitalisation efforts, some remain sceptical or have given it less of a priority as they cope with other bread-and-butter issues. This reluctance to digitalise is understandable as they are uncertain about how to begin their journey and require support to kickstart their transformation.
To help these SMEs, the Infocomm Media Development Authority (IMDA) launched the CTO-as-a-Service (CTOaaS) initiative in 2021 to provide SMEs with access to a shared pool of experienced digital consultants for in-depth advisories and project management services. Through this initiative, businesses can receive tailored recommendations and adopt suitable solutions based on their budgets and operational requirements.
Through Stone Forest, one of the CTOaaS operators, Alps Group was able to identify and connect with relevant service providers to address its technology adoption and integration concerns. This has allowed Alps Group to narrow down suitable market proven digital solutions to broaden its market reach both locally and abroad.
Similarly, for Utracon Corporation, the operator was able to provide digitalisation advice and appropriate solutions to help the company enhance real-time project monitoring and team collaboration while easing employee resistance to potential technological changes.
Growing Digital with e-Commerce
Given Singapore’s export-oriented economy and its modest domestic market, businesses would also need to venture into overseas markets to achieve greater growth.
However, some businesses are concerned with the high infrastructure, manpower costs and regulatory requirements of physically setting up shop overseas to seize these overseas opportunities. E-commerce offers them the perfect platform to testbed their products and services in these markets without the need of incurring additional expenses to set up a physical storefront.
As businesses continue to grow their e-commerce platforms and consumers become more digitally savvy, it is estimated that digital consumers in Southeast Asia will account for 88% of the population – or 402 million people – by 2027. The e-commerce gross merchandise value within this region is expected to hit S$$378 billion, with e-Commerce sales in Singapore alone reaching S$19 billion. Businesses that diversify into e-commerce early can tap this vast burgeoning market and further expand their products and services beyond Singapore.
By leveraging IMDA’s Grow Digital initiative, SMEs can connect with potential overseas clients via smart matching and optimise their listings on overseas e-marketplaces. These SMEs can further gain prompt access to financing offers and tap cross-border e-payment facilities that alleviate currency risks.
Onboarding the Nationwide e-Invoicing Network
Even as businesses tap new markets and grow their revenue streams via e-commerce, they would need to maintain steady and stable cash flow to service their existing operational expenses and reinvest for the future. By adopting e-invoicing, which involves the direct transmission of invoices in a structured digital format across different finance systems, businesses can expect faster payment cycles and improved cash flow.
While improved cash flow directly helps the bottom line of the business, the positive impact of e-invoicing extends far beyond just monetary terms. By processing invoices more efficiently and making timely payments, businesses can boost the confidence of and build trust with their trading partners. This would likely lead to better deals with more favourable terms in future transactions, and signal sound financial management of the business by avoiding interest charges from delayed payments.
Since the launch of the nationwide e-invoicing network – InvoiceNow – in 2019, some 55,000 Singapore businesses have adopted the initiative, including Fujifilm Business Innovation Singapore. The company was manually processing an average of 32,500 invoices each month, making billing and tracking tedious and time consuming. By adopting e-invoicing, the company was able to achieve strategic invoicing goals such as cost reduction, increased invoice visibility, and improved cash flow management.
With InvoiceNow becoming more pervasive, companies in the hospitality industry have also hopped aboard the bandwagon. Pan Pacific Hotels Group embraced InvoiceNow and gained stronger partnerships with their suppliers, and are now able to efficiently streamline their invoicing processes by making it smoother and quicker.
As the network continues to rapidly expand, the government has introduced incentives to accelerate the adoption of InvoiceNow so that businesses can receive even more benefits. These include the InvoiceNow Transaction Bonus where businesses can receive S$200 when they send 10 e-invoices within a year, as well as the LEAD Connect and Transact Grant of up to S$70,000 for businesses that connect their systems to and transact on InvoiceNow.
Advancing Towards a Digital-Ready Economy
The push for digitalisation was emphasised by the Senior Minister of State (SMS) for the Ministry of Communications and Information Tan Kiat How in Parliament on 28 February. During the Parliament session, SMS Tan noted that enterprises should not take a pause on digitalisation and that the government will provide support by putting in place an enabling digital ecosystem. This includes the scaling up of adoption of digital utilities like PayNow and InvoiceNow at the national level, and refreshing Industry Digital Plans at the sectoral level.
Furthermore, Senior Minister of State for Finance and Transport Chee Hong Tat also announced on 24 February that the government will be using InvoiceNow for all its vendors in the next few years to accelerate the adoption of e-invoice and e-payments when transacting with the government. At present, about 80% of government contracts are awarded to SMEs annually, which help these businesses build solid track records and develop capabilities to tap new growth areas.
SBF, together with a comprehensive suite of solution providers, will continue to support all businesses in their digitalisation efforts to increase operational efficiencies, explore new markets, and catalyse growth by embracing the digital economy.
Empowering Your Business for the Digital Future
SBF is the appointed Programme Manager by IMDA for CTOaaS, SMEs Grow Digital, and InvoiceNow.
As part of our continuous efforts to empower businesses for the digital future with these initiatives, we have specially curated a series of workshops that best meet your business needs and aspirations.
During these workshops, you can learn about available government grants, glean valuable insights from businesses that have successfully adopted the initiatives, and discuss your specific requirements with a full suite of solution providers and industry experts.
You can now register for any of the complimentary workshops here. For more information on the initiatives, you can also email us at AskADT@SBF.org.sg.