Three steps for SMEs to improve productivity

Productivity on tap as SMEs look to the cloud

Singapore is in the middle of an ambitious ten year journey of economic restructuring. Key to both global competitiveness and national prosperity is business productivity, facilitated by investment in and adoption of tools and technologies that deliver efficiencies and cost savings.

Small and medium-sized enterprises (SMEs), 99 per cent of all companies in Singapore, employ nearly three quarters of the workforce and contribute close to half of gross domestic product (SPRING Singapore). SMEs are the economy. But in 2014, productivity growth declined by 0.8%, after rising by only 0.3% in 2013; and the nation’s gross domestic product (GDP) contracted a sharp 4.6 percent in Q2 2015, weeks before the country turns fifty.

Resource constrained SMEs must take action; but how do they make the right tech evaluations, decisions and implementations to boost their competitiveness? Here we offer three steps to improve SME productivity with cloud technology – understand, implement, assess.

1. Cloudy, with a chance of productivity gains

Cloud technology has permeated more and more business functions – content, communications, collaboration tools, data management and analytics, to name just a few. For SMEs, there are plenty of reasons to migrate to the cloud: from a resources perspective, it frees up an already constrained organization from maintaining its own software, servers and other tech infrastructures; from a strategic management stance, it provides decision makers with access to key data; and for productivity, it fosters internal and external communications, streamlining the supply chain and increasing agility and responsiveness to stakeholders. Increased productivity and cost reductions are the most-valued cloud computing benefits, according to a recent global study of 1,000 senior IT decision-makers conducted by Tata Communications.

Despite the numerous reasons for a business to embrace cloud, SMEs must realize that technology, by itself, won’t foster productivity gains and cost savings. They need to first understand and assess their business – mapping its people, process and technology against their bottom line, and recommending technology measures to bridge this gap. This will determine what needs to be done, how to do it, what it can achieve, and what it will cost.

2. Reach for the stars, with your head in the cloud

With the assessment firmly in place, businesses can draft out their technology roadmap, and proceed to adopt the best digital technologies. In the past, technology solutions required enormous investment in large enterprise systems, supplied by even larger enterprise organisations, and a skilled team to manage the organisational complexities. Now, driven especially by cloud technology, which allows software to be selected, used and paid for over the internet, technology solutions can be implemented easily, at low cost and with little internal expertise.

Ratan Tata, chairman emeritus of Tata Sons and newly appointed special advisor at Singapore-based venture capital firm Jungle Ventures, most recently endorsed this concept of Operations as a Service (OaaS). Within OaaS, options include Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), Software-as-a-Service (SaaS) and recently Cloud integration-Platform-as-a-Service (iPaaS), on a freemium, pay-as-you-go, or a retainer basis.

3. Lead the cloud transformation

In small and medium sized businesses and enterprises, particularly in Southeast Asia, change usually derives from a CEO’s or a business owner’s mandate. With a strong digital strategy and execution framework, SMEs can continuously assess the impact of cloud technology on their bottom line, making adaptations and changes where most suitable for the business.

The traditional SME is dead. All hail the traditional SME.