The recent report published by SME Corp and Huawei Technologies (M) Sdn.Bhd. that looked into the state of digitalisation in the SME sector found that most have barely scratched the surface of utilising technology as a growth driver. Although in the study it was found that almost 50% of the 2,033 companies surveyed had an ICT mindset, about 30% invested to be more efficient, the balance of 20% were cautious about investing while the balance are laggards.
This phenomenon is not new as the drive to deploy the most basic of ERP systems among Malaysian SMEs have been ongoing for the past 25 years. After more than 25 years, many don’t move beyond basic computing. In the survey, it was revealed that 54% was using some form of business analytics but 67% of these were using spreadsheets. This means they are not tapping on information to drive business growth as they should be doing.
Although eCommerce is prevalent in the business environment today, only 44% are involved in such activities. Even fewer companies have leveraged software solutions to improve their business operations.
Most SME business owners have not develop any digital strategy as a catalyst of business growth. The sense of belief is not within their business culture unlike those in the developed countries where many industries are being disrupted. Digital disruption is the norm moving forward but many of us are still trapped in a time warp. Take for example the taxi industry that is being disrupted by ride hailing apps. Malaysian taxi drivers are still trapped in their own world where technology are making their business practice obsolete.
Sticking with mere computerisation with use of computers without changing business processes and harnessing the full potential of innovation of new technology platforms leaves organization at risk of going out of business altogether. The Malaysian SME sector really need to invest in digital technologies in order to enhance their productivity. Many companies in the manufacturing sector needs to transform their manufacturing processes with digital technologies. The study data showed that SMEs using an ERP system are reporting a 60% gain in their productivity.
Re-engineering business processes is not an easy task but Malaysian SMEs needs to formulate some strategies to look into digital technologies as an enabler. There are many simple options to consider – digital data capture across all supply chain and manufacturing processes; mobile sales force automation and business analytics just to name a few. However, the most basic starting point is the deployment of an ERP solution as the backbone towards improving productivity.