The Impact of Cloud on Small Businesses in Singapore
Small to medium enterprises (SMEs), also known as the pillars to the nation’s economy, comprise a large part of Singapore’s business landscape. According to data from Statistics Singapore in 2014, there were approximately 187,700 SMEs in Singapore, forming close to 99 percent of the island state’s total number of enterprises and contributing to nearly half (48 percent) of the country’s gross domestic product (GDP). As such, though SMEs are generally regarded as “the new kids on the block” or “not one of the big boys,” they can collectively pack a punch, both in terms of employment opportunities and economic contribution.
Yet, there is a pervading factor amongst most SMEs. Due to the fact that they do not share the economies of scale as their larger, transnational corporation counterparts, they need to be, and are, extremely careful in their expenditure. In 2015, the Asia Cloud Computing Association (ACCA) released a report on SMEs that stated that the average expenditure on IT for a local SME was only around 2.5 percent of its budget.It is therefore for this reason that cloud-based business functions, particularly Software-as-a Service (SaaS), will have a massive positive impact on local businesses.
Singapore is on track to becoming the world’s first Smart Nation, which among other things involves encouraging businesses to adopt emerging technology such as cloud-based business platforms. To this end, the Singapore government has put extensive efforts in promoting infocomm tools and next-generation infrastructure and services for SMEs to benefit from. It has implemented various incentives, training and support programmes to help push SMEs along the growth trajectory. More recently, it has also announced a new national budget of $19 billion to encourage SMEs to focus on implementing technology and drive innovation as part of the Research, Innovation and Enterprise (RIE) 2020 plan representing Singapore as a knowledge based, innovation-driven economy.
Singapore is one of the biggest adopters of cloud-based technology in Asia Pacific, with businesses of all sizes seen embracing cloud-based business solutions and deploying business applications on smartphones to enhance business agility and efficiency. Prime drivers for this growth are the emergence of smart devices, the BYOD (bring your own device) trend, affordable and quick connectivity traffic, availability of services and applications, easy of accessibility and adoption of new technology. Based on the ACCA SME 2015 report, Singapore has a mobile penetration rate of 156 percent, and a broadband and wireless penetration of 211 percent and 185 percent respectively. As such, the Singapore workforce is accustomed to using mobile and web technology in their personal and professional lives, and can therefore adapt to cloud-based functions fairly easily.
Furthermore, according to IDC, the cloud computing market in Singapore is forecasted to grow at US$1 billion (S$1.4 billion) by 2017. This shows, then, that businesses of all sizes are realising the benefits of cloud technology and how it improves the efficiency, productivity and functionality of business operations. However, given the highly competitive business climate and structural changes currently taking place in the economy, many SMEs might find it harder to stay competitive and grow if they do not innovative.
There are several notable things that make the cloud so advantageous to SMEs:
1. Cloud is changing business functions;driving increase in sales force for companies
A recent study by Oxford Economics and SAP showed that cloud computing is instrumental in developing new products and services, new lines of businesses and entering new markets. Small businesses, particularly SMEs, lay more emphasis on sales to drive business and establish themselves. It is for such sales driven teams that cloud-based business solutions can prove to be a boon. The fact that business functions, such as emails, documents or business contacts can now be accessed anywhere with a smart device is much more convenient and in effect allows for more business opportunities to be forged. In particular, SaaS platforms like ours offer global accessibility with the download of an app. Cloud-based business card management solutions offer sales teams the potential to increase business productivity, together with business opportunities, via the sharing of business connections within the company.
2. Cloud provides cost- and time-effective solutions
This leads to the next point – that cloud computing is able to save a business both time and money. Digitizing information can help cut costs by up to 90 percent, because it allows businesses to store data on the cloud and thereby reduce the need to invest in bulky infrastructure. In a very real sense, cloud-based business solutions are able to streamline a company’s efficiency by providing access to data as simple but important as business cards when needed at the right time.
3. Cloud provides business opportunities opens doors to new business opportunities
Finally, another important way in which cloud-based functions help businesses is through the unearthing of new business leads which can be used to a company’s advantage. More enterprises are adopting emerging technologies to empower customers and improve their own business functions. Local companies are driving this trend with the adoption of modern CRM systems implementing enterprise-style technology. Riding this wave of innovation are SaaS companies like Sansan that help SMEs and large business enterprises realize their business potential by digitizing business cards, storing them on cloud to be shared across teams and leverage in generating new business leads, get customers, close deals faster and service smarter. The ability to seamlessly sync contacts across social platforms and to manage an entire contact database on one platform also saves time and makes information more readily available, which benefits companies. Cloud computing is no longer the focus of the IT department, but has become one of the top level discussion subjects with management and C-level leaders in organisations that are focused on driving transformation for their companies by enabling innovation to seize greater business potential from all that cloud has to offer. Though cloud benefits all manner of companies with its obvious advantages, SMEs will reap the most benefits as taking the lead with innovative thinking and capability enhancement puts them on par with larger firms, in effect levelling the playing field and allowing them to thrive. In this competitive market it is important for SMEs to innovate and embrace cloud-based business solutions to boost their potentials or risk being left behind.
- Chika Terada, Founder and CEO, Sansan Inc -