How SMEs can future-proof themselves to thrive beyond the pandemic

Has Southeast Asia’s appetite for online shopping burgeoned amid the Covid-19 pandemic? The numbers suggest so: In 2019, the region’s internet economy reached US$100 billion, a figure that is projected to triple by 2025.

Future-proofing a business requires more than simply establishing an online presence in the ecommerce space, though. There is a technique to reaching a wider audience, particularly for small to medium-sized enterprises (SMEs).

“The ecommerce sector has gone from seeing a steady rise to seeing a sharp jump in the last 12 months,” observes Ashley Schroder, co-founder and lead software engineer at automated accounting platform A2X. “On the flip side, this has created more competition in the market. For ecommerce businesses that are already digitalizing and automating processes, there’s room to do so much more.”

From left: Christian Antono, strategic partnerships Manager at Xero Asia;
Ashley Schroder, co-founder and lead software engineer at A2X; Namra Deka, senior market development manager of expansion at Shopify

These insights were shared at the recent “2021 and Beyond: A Digital Transformation Action Plan for SMEs” webinar, where representatives from global small businesses platform Xero, ecommerce platform Shopify, and A2X discussed some ways businesses could future-proof themselves while moving online, such as developing agile thinking amid the uncertain climate, building a good architecture of tools and software, and looking at data points for further growth.

The new age

According to Christian Antono, strategic partnerships manager for Xero’s business in Asia, standing out in the crowded online space starts with digitalization. Specifically, that means being willing to fully embrace digital tools and developing a culture of taking intelligent risks.

“It’s crucial to have that culture in place especially as you scale and you get bigger, [since] things tend to get a little bit more bureaucratic,” Antono points out. “As Xero has grown, we’ve decentralized power by breaking down our teams into smaller, more autonomous ones. You can’t afford to apply the same cookie-cutter strategy to different geographies within Southeast Asia. And sometimes to get it right, you have to fail.”

He adds that through these failures and experiments, a project can be viewed from multiple perspectives, therefore increasing the chances of landing on a successful formula. This tactic for agile thinking works in tandem with using the right digital tools, which can help businesses make better decisions.

“By integrating the right accounting system into their processes, businesses can get much more fine-grained information, such as where the money is going on certain fees or charges,” explains A2X’s Schroder. “Automation and digitalization give you better control of cash flow, margins, revenue, and profitability, which has a big knock-on effect on the business as a whole.”

Laying the groundwork

The pandemic has also amplified the need for SMEs to adopt collaborative tools and software in order to keep their everyday operations running smoothly, says Antono.

But of course, there isn’t a one-size-fits-all cloud-based solution for different types of businesses – and Namra Deka, senior market development manager of expansion at Shopify, knows this. As he points out, a brick-and-mortar business that is going digital would have different requirements from a print-on-demand business that wouldn’t need to hold any inventory.

Regardless, and in both cases, companies would require the right online architecture to help them stay versatile to thrive and survive in these uncertain times – such as the ability to capture real-time Shopify transactions and pass on the information seamlessly between different software.

Arriving at this point requires a firm foundation, and that starts from understanding consumers’ buying behavior, says Deka.

Photo credit: Headway / Unsplash

“Few SMEs have invested the time and energy to understand their consumers’ personas and biases,” he suggests.

Identifying that knowledge gap led Shopify to launch initiatives such as Shopify Compass, which offers online courses for entrepreneurs and insights from industry experts, thereby giving SME owners a better understanding of what they might be missing as they build a digital presence. That includes how to get payment licenses, as well as understanding the nuances of, and costs associated with last-mile delivery.

In addition, Shopify merchants are offered one-on-one sessions with the ecommerce platform’s ecosystem of partners – including specialists from the web development, web design, and digital marketing spaces – to guide them in making data-informed business decisions.

For SMEs embarking on their digital transformations for the first time, implementing changes such as digitizing their paper records and syncing their point of sale (POS) systems to the backend could be further simplified using Xero. Through its end-to-end approach, the cloud-based accounting software helps SMEs make better decisions.

“We advocate for data flow, rather than data entry,” shares Xero’s Antono. For instance, a transaction made on Shopify would be able to pass through to A2X, and on to Xero. This way, “business owners would have access to real-time accounting as much as possible so they can make better decisions going forward,” he adds.

Leveraging data

In addition to bridging these gaps, Antono notes that a key mission of Xero is working with partners to minimize human error by connecting an SME’s fragmented data points – all of which would allow data to seamlessly flow from source transactions through to an SME’s profit and loss statement.

Adds Antono: “This would ultimately allow SMEs undergoing digitalization to scale in real-time and promptly respond to consumer demands. In the current climate, agility and transparency are paramount.”

Merchants on Shopify, for example, can access analytics and reports to better understand their consumers’ needs, or identify ways to manage their inventory better by looking at sales trends.

“When business owners have access to such information, they can reinvest their time in other things, such as boosting their top lines of revenue, improving processes, or spending more time with their families,” Antono says.

To arrive at this point, he suggests building the right ecosystem of tools and harnessing data in the right way. These could ultimately help a business scale in the short and long term as it adds and tweaks solutions to meet business needs.

“Very seldom will you choose all of the right baseline apps when you’re first starting out,” he observes. “The most important thing is to choose a platform that will offer flexibility in terms of building an ecosystem, because this will allow you to tailor your business to your liking. And as you grow and scale, always refer back to data. These data points will reveal the most valuable outcomes of your experiments.”

Xero is a cloud-based accounting software that helps small and medium businesses digitize their accounting processes and improve business efficiency. Sign up for your complimentary 30-day Xero trial here.

This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.