According to one cloud accounting solutions firm, digitally-pivoted SMEs that have survived the pandemic this far can head into “growth mode”
After two years of business disruption from the COVID-19 pandemic, followed by period of rushed pivoting. Intense cyberattack activity and hurried governmental interventions to spur digital transformation (DX), what can small- and medium- sized enterprises (SMEs) in the Asia Pacific region expect this year?
What headwinds are being coming our way, and what proactive strategies can SMEs develop as we tread into the first weeks of 2022?
One cloud-based accounting software firm has offered three insights gleaned from its business over the turbulent pandemic. According to Kevin Fitzgerald, Managing Director, Xero Asia, SMEs in the region will be in a better position if they keep transforming digitally with smart tech investments, tap data intelligence to provide customers with extraordinary service.
SMEs will shift into growth mode with a strong focus on DX
In 2021, small businesses accelerated their digital investments to survive prolonged pandemic restrictions. In 2022, they will take a more focused approach to digital adoption.
Some will look to digital tools to expand their customer base and facilitate relationships in the face of an evolving regulatory environment. Others will seek out technology that enhances innovation and supports the development of new products and services. Many small businesses will focus on technology that improves operational processes.
For example, during a severe lockdown in Singapore, an online Japanese gourmet grocer saw demand grow by 400%. Through quick and seamless pivoting of its e-commerce platform and accounting function, the grocer was able to meet demand and reap benefits from its digital agility.
SMEs will tap into data to solve customer pain points
Recent studies show that even SMEs in technologically agile countries in the region have yet to tap into the power of data to help inform and, or validate business plans and strategies.
With affordable and scalable cloud tools empowering businesses to double down on their data strategies now at hand, this will be year where more SMEs will tap data in more versatile ways.
With business performance data available anytime, anywhere, SMEs will be able to adjust sales and campaigns to meet the ever-changing targets necessary in the region’s sometimes unpredictable pandemic measures.
Having a bird’s eye view of cash flow and financial health allows SMES to allocate budgets and investments effectively, and even support planning for international expansion to diversify business interests and reduce risk.
Increased tech spend will help SMEs stay afloat
As more small businesses embark on digital transformation projects to accelerate their post-crisis recovery, technology budgets are expected to increase. According to IDC estimate, at least 20% of small businesses globally will cease operations by 2025 if they do not digitalize fast enough.
For example, bars have been badly hit by pandemic restrictions due to the nature of customer activities in such premises. However, one cocktail bar’s quick digital transformation allowed it to pivot to new food and beverage activities instead of choosing to wait out the pandemic uncertainties. The bar also cited access to real-time data visibility as invaluable in managing and understanding cash flow, to support informed plans for its new business in the new year. Its business system’s integration with Stripe has also allowed for automatic recording and bank reconciliation, freeing up invaluable time—particularly beneficial when short-staffed amid work-from-home mandates.