How to Solve Cash Flow Problems for SMEs in Singapore
Discover ways to identify and address cash flow problems in business, and learn how to improve your long-term cash flow to avoid a cash crunch.
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Digital transformation is the latest buzzword in the age of technology. Not only are players in the private sector acting on initiatives to rework their business and technological capabilities, but the same is observed in the public sector as well.
Recently, the government of Singapore announced plans to transform the city-state into a “Smart Nation”. It’s through the use of technology that the vision will be achieved.
As the Singapore government has hopped on the bandwagon of digital transformation, both short and long-term implications abound for citizens and businesses inside and outside of the city-state.
In this article, we’ll take a deep dive into the initiatives of digital transformation in Singapore, and provide insights into what you should know as a business.
Digital transformation in the narrow sense refers to the integration of technology into different aspects of a business.
It can be used to create new or modify existing workflows, processes, strategies, culture or customer experiences, transforming a business for better productivity, agility and profitability.
Broadly speaking, however, digital transformation can be applied on a city level (or higher) to remodel a region for the sake of public welfare. Copenhagen, Beijing and Seoul are some examples of leading smart cities in the world.
Inspired by the changes brought about by the Fourth Industrial Revolution, Prime Minister Lee Hsien Loong first put forward the idea of digital transformation in Singapore in 2014.
The Smart Nation Programme Office was hence established to support the vision and mission of building a smart city-state. Various strategic projects have also been launched to enable the adoption of digital technologies throughout Singapore.
“We must help our workers adapt to the digital economy. The digital transformation will be disruptive, especially for less skilled workers and those on the wrong side of the digital divide.” – Prime Minister Lee Hsien Loong
In Singapore, the Smart Nation Initiative is underpinned by three key pillars: Digital Economy, Digital Government and Digital Society. Each pillar will be explored in detail below.
Under the canvas of Digital Economy, the Singapore government strives to create a pro-business environment to foster the digitalization of businesses across the board, hence accelerating economic growth for the good of all.
To illustrate this, an e-invoicing scheme was launched in 2019.
Set up with the aim of facilitating the invoicing process, the new system completely automates the exchange and processing of payment requests between buyers and suppliers.
Instead of manually creating invoices from templates or issuing and scanning handwritten ones, these documents can now be created and sent to the recipients digitally, easily and quickly.
In terms of advantages, the e-invoicing framework will speed up transactions, reduce operating costs and minimize errors.
Adoption of the new system isn’t made mandatory yet, but widespread usage is observed for the convenience and cost savings that it brings.
"Digital Government” is another key imperative in the continuing endeavor to drive digital transformation in Singapore. The ideal is to create a government that is “digital to the core, and serves with heart”.
More specifically, the goal is to design policies and services that are accessible and easy-to-use for citizens, businesses and public officers in Singapore. Digitalization of public services is a means to achieve this.
For example, the GoBusiness portal was put to use in 2019 to facilitate the process of licensing for businesses.
Prior to the birth of this portal, owners of food & beverage (F&B) businesses had to go through a lot of red tape in order to set up a new shop or restaurant. With the new system, the number of application forms is reduced from 14 (with 800+ data fields) to only one (with 90 data fields or less).
To further speed up the application process, information will be auto-routed to relevant authorities for expedited, parallel processing. As a result, the turnaround time for licensing can be cut down to 10-14 days only.
The third pillar in the digital transformation of Singapore is called Digital Society. A key concern under this pillar is to increase digital access, literacy and participation among Singaporeans.
Zooming into the features of Digital Society, what is most noteworthy for businesses is perhaps the government’s emphasis on e-payments in Singapore. It’ll redefine the way that consumers interact with businesses, namely how they pay and transact in online and offline settings.
In fact, Singapore has made great strides in popularizing digital payments since the inception of the Smart Nation initiative.
To give an example, the FAST (Fast and Secure Transfers) payment system was launched in 2014, enabling direct, real-time transfers of funds across different banking institutions.
Building on the FAST infrastructure, another real-time payment system, PayNow, went live in 2017. Simply by entering the recipient’s mobile or unique identification number, individuals, businesses and government agencies can easily transfer money from a bank account to another instantly.
The real-time fund transfer service now has more than 80% of residents and businesses onboard, and the number continues to be on the rise.
As the government’s push for e-payments continues, citizens in Singapore will become more and more digital ready as time advances.
Consumers are increasingly used to transacting digitally and seamlessly in a cashless society, and it’s a new normal that businesses have to embrace.
An act as simple as switching from analog records to Excel can be a step towards digital transformation, but there are numerous other ways in which transformation can be achieved.
As a business, it’s imperative that you keep abreast of current trends in order to stay competitive in the dynamic environment.
We’ve therefore compiled a few examples of digital transformation in Singapore for you to gain insights and take reference from. Discover more below!
COURTS is a leading retailer of furniture and consumer electronics. It’s also one of the top e-commerce sites in Singapore.
The furniture seller, which has roots in the United Kingdom, made its foray into Singapore in 1974. Up until recent years, however, the presence of COURTS remained largely offline.
To illustrate this, COURTS has established a network of more than 10 brick-and-mortar shops in Singapore. Customers used to visit, browse and buy products in-store.
What about going digital? It was hardly a to-do item on the decades-old company’s roadmap — until customers’ shopping behavior started to change.
Driven by the local government’s digital transformation initiatives and other factors in the macro environment (e.g. Covid-19 pandemic), an increasing number of Singaporean consumers has turned to online shopping.
Between 2019-2020, for example, the online market for furniture and appliances in Singapore grew by more than 30%. In these circumstances, the furniture brand must adapt to people’s changing behavior for business survival and continuity.
Under their digital transformation framework, COURTS made the following changes to offer brand-new shopping experiences for its customers:
With the assistance of an e-commerce agency to implement the changes, COURTS’ digital pivot showed promising results. In numerical terms, the company saw 41% increase in revenue, 35% growth in transaction volume, and 11% rise in conversion rate, according to a case study.
“The COURTS Online relaunch was timed strategically around key retail events of the year such as Black Friday and Cyber Monday. Powered by the new platform, online sales for both events grew almost 100% year-on-year.” — Stan Kim, Chief Strategy Officer at COURTS Asia
Almost a hundred years ago in the 1930s, X-Inc started out as a family-owned food distribution and trading business. X-Inc is now the parent company of a group of food services and adjacent businesses, such as FoodXervices Inc, GroXers Inc and LogiXtics Inc.
When Nichol Ng, X-Inc’s third-generation owner, joined the company in 2002, she and her father made plans to digitalize and modernize the business, which was still being run with pen and paper at that time.
In more specific terms, the following changes were implemented at X-Inc:
Looking back, Ng admitted that embarking on the rebranding and digital journey was a big and risky move for the rather old-fashioned company. In hindsight, however, it turns out that the right call was made by the female mastermind.
Under the leadership of Ng, who is now X-Inc’s CEO, what was once a struggling family business has branched out and grown into a thriving empire of food and logistics companies. The group now touts more than S$60 million in annual revenue, and more is hoped to be achieved.
Dairy Farm is a leading retail group in Singapore which runs supermarkets (e.g. Jasons), convenience stores (e.g. 7-Eleven), healthy and beauty outlets (e.g. Guardian) and various other types of shops under well-known brands.
Despite having an established IT infrastructure in place, the group faced multiple technological challenges:
Owing to the complexity and outdatedness of its existing infrastructure, upgrading of the group’s IT system became a necessity. It therefore turned to a cloud-based architecture, hosting its various applications on private and public clouds.
For Dairy Farm, migration to the clouds had a number of benefits. For instance, the five-year cost of using the cloud solution was 20% lower than a full server replacement.
The upgraded infrastructure also enables the group to test and launch new services with significantly shorter lead times, and can better support the business’s innovation agenda.
According to Mr Eu Kwang Chin, IT Director of Dairy Farm Singapore, the retail group has been striving to create “best in class shopping experience” for customers, and the new infrastructure lies at the heart of it.
In the last section, we’ve looked into examples of digital transformation in Singapore companies. They’ve adopted new technologies, revamped work processes, and even instilled the digital mentality into the company culture, successfully digitalizing different facets of their businesses.
Below, we’ll explain the steps to undergo digital transformation for your business. Read, learn and apply to set your business up for digital success!
Before boarding the train of digital transformation, there’s one question you must ask yourself: “Why are you doing this?”
Think about the core reasons for implementing changes in your organization. Having a clear goal will help you plan ahead and set performance indicators to measure the effectiveness of your initiatives.
For example, the decision to go digital in COURTS, the furniture and electronics brand, was motivated by the need to improve the customer experience. For X-Inc, it was to increase efficiency of internal work processes, whereas Dairy Farm Singapore needed an upgrade to their IT infrastructure to better support their business innovation agenda.
The next step of digital transformation follows the classic “problem-solution” approach. To identify problems and corresponding solutions, you must first know how your business is doing now.
This includes reviewing procedures and systems currently in place, comparing against strategic performance objectives, and assessing how effectively they’re operating. You can then pinpoint inefficiencies to fix or opportunities to tap into.
After identifying the objective and areas for improvement in your business, a strategy is what you need.
The best practice is to create a digital transformation roadmap, with a timeline and key milestones that you hope to achieve in the transformation journey. Be sure to take into account in-house capabilities, availability of software solutions and business funding when devising your strategy.
Last but not least, staff training is essential for effective execution of a digital transformation strategy.
Employees should be taught to use the new software, applications or tools deployed in your organization. Post-training assessments should also be conducted to ensure that knowledge and skills have been transferred to your staff.
Most importantly, make sure to equip your staff with a digital mindset. It’s only with company-wide efforts that digital transformation can be effectively implemented throughout a business.
With digital transformation initiatives in full swing in Singapore, it’s high time that you join the party. After all, a strong digital backbone is pivotal to business survival, growth and success in the dynamic and competitive environment today.
If you’re looking for funding to supercharge your business’s growth trajectory, Choco Up has you covered. With our flexible funding and smart-growth analytics, we can be your trusted growth partner. Learn more from our client success stories or apply for funding today!
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