2 in 3 SMEs are not digitally ready for the future
Only 30 per cent of respondents working in SMEs say that they are mostly or thoroughly digitalised compared to 86 per cent in large firms
Singapore, 28 November 2022 – Businesses are embracing digitalisation1 to support their operations and employee engagement, but this is happening at different speeds. The smaller the organisation, the less digitalised it is likely to be. This is according to a study commissioned by Prudential Singapore (“Prudential”) to assess how companies are leveraging technology to improve internal operations as well as help their employees maintain a healthy lifestyle and build financial resilience.
One in three (30 per cent) respondents working in small and medium-sized enterprises2 (SMEs) say digital technology underpins most or all its business processes and operations. This number is nearly three times higher (86 per cent) for those working in large firms.3
Mr Jeff Ang, Head of Enterprise Business Solutions, Prudential Singapore, said that while the pandemic has accelerated digitalisation efforts in businesses, more can be done to help SMEs keep pace with large firms in leveraging technology.
“SMEs are a key pillar of the Singapore economy. Engaging and supporting them in their digitalisation, whether through grants or training programmes, will be crucial in helping them stay relevant to customer needs and be more resilient as a business. When SMEs thrive, there will be a positive impact on the economy, resulting in greater growth for all,” said Mr Ang.
SMEs have invested less in advanced technologies compared to large firms
When it comes to investment in advanced technology such as Artificial Intelligence (AI), data analytics and online payments, SMEs are also lagging behind their large enterprise counterparts.
Titled “Digital for 100: Business, technology and fulfilling lives,” the research conducted by Economist Impact also found that SMEs invested less compared to large firms. For example, just 60 per cent of SMEs have invested in AI compared to 82 per cent of large firms. When it comes to analytics, it is 30 per cent for SMEs and 70 per cent for large firms. With online payments, it is 28 per cent versus 70 per cent. SMEs surveyed said that the primary reason for not digitalising to a greater degree was a lack of budget.
Acknowledging the gap in digitalisation levels between SMEs and large businesses, Mr Kurt Wee, President of the Association of Small and Medium Enterprises (ASME) shared, “that gap has narrowed considerably over the past five or six years.”4 This is due in part to strong government support, ensuring that SMEs have access to resources and advice that help them to upgrade their digital capabilities.
The silver lining is that SME respondents also indicated that their organisations plan to invest in and develop advanced capabilities such as data analytics, blockchain and product/service personalisation in the next two years.
Businesses across the board said that their organisations have already invested in 5G (73 per cent), AI (71 per cent), and mobile apps (58 per cent). They intend to invest in product or service personalisation (47 per cent) and analytics (41 per cent) in the next two years.
Using technology to boost employee engagement
Besides improving internal operations, technology can also support flexible working, improve employees’ physical health, and facilitate corporate activities. Nearly 4 in 5 (79%) respondents agree that technology, if used effectively, impacts their organisation’s ability to strengthen employee engagement.
How can companies use technology to boost employee engagement? According to respondents, the most impactful way is by encouraging and supporting digital innovation internally (47%), followed by career development in new technology-based roles (41%).
For nearly half of SMEs (48%), training employees in the use of newly-adopted digital technologies is key to driving engagement.
“Digital technologies can help people connect and grow, and create a more collaborative work culture. In any digital transformation, it is important to have everyone on the journey, and ensure they are well equipped to leverage new technologies to help them do their job better, and with greater confidence,” said Mr Ang.
Supporting SMEs in building a healthier and more productive workforce
Prudential offers health and wellness programmes (WorkPLAYce programme) to help the Singapore workforce stay healthy and productive and help its customers make holistic wellness a core part of their corporate culture. It offers a variety of activities aimed at promoting physical and mental well-being, such as fitness and meditation classes, as well as health screenings.
Prudential is also supporting SMEs in their business growth through partnerships. For example, the SME Skills Accelerator programme, a collaboration between Prudential and SkillsFuture Singapore which aims to equip SMEs with the skills and resources to grow and innovate, upskill employees to boost their career progression, and improve employee retention.5 Prudential has also established tie-ups with Ngee Ann Polytechnic and ST Engineering to boost SMEs’ digitalisation efforts and business growth. These partnerships deliver trainings and webinars on digitalisation and cyber security to help SMEs in their business transformation.6 The company also launched a mobile app, Business@Pulse, which allows Prudential’s corporate customers and their employees to view their medical and employee benefits as well as submit claims through the mobile app, at any time, and from anywhere.7
Notes to the editor:
About the study:
“Digital for 100: Business, technology and fulfilling lives” is the sixth research study from Prudential’s Ready for 100 series. It is the second of two reports that explores the role that digital tools currently play and will play in how Singapore residents manage their lives in the face of an increasing lifespan. A total of 100 Singapore-based executives were surveyed in June and July 2022 for this study. Of the respondents, 39 per cent perform general management roles, 35 per cent are human resources executives and the remainder hold strategy positions. Half of the respondents’ organisations are small and medium-sized enterprises (employ between 10 and 200 employees) while the other half are large firms (has a workforce of 201 and above). Twenty sectors are represented in the survey, with financial services, professional services and technology providing the largest numbers of respondents. A panel of subject-matter experts was also interviewed for this study. The research was commissioned by Prudential and conducted by Economist Impact.
Past reports and media announcements can be viewed as follows:
- Ready for 100 (2018)
- Healthy for 100 (2019)
- Research Report
- News Release - 1 in 2 healthcare practitioners: Singaporeans will struggle to afford rising healthcare costs of living to 100
- Skilled for 100 (2019)
- Research Report
- News Release - Prudential’s Skilled for 100 report: Businesses need to do more to tap the talent and expertise of their older employees for sustained growth
- Saving for 100 (2020)
- Re-imagining 100 (2021)
- Research Report
- News Release - Sandwich generation’s health and financial wellbeing most impacted by the COVID-19 crisis: Prudential study
- Digital for 100 (2022)
About Prudential Assurance Company Singapore (Pte) Ltd (Prudential Singapore)
Prudential Assurance Company Singapore (Pte) Ltd is one of the top life insurance companies in Singapore, serving the financial and protection needs of the country’s citizens for 91 years. The company has an AA- Financial Strength Rating from leading credit rating agency Standard & Poor’s, with S$53.3 billion funds under management as at 31 December 2021. It delivers a suite of well-rounded product offerings in Protection, Savings and Investment through multiple distribution channels including a network of more than 5,000 financial consultants.
2Companies with 10 to 200 employees.
3Companies with 201 or more employees.
4This quote can be found in the “Digital for 100: Business, technology and fulfilling lives” report. For more information, please refer to https://impact.economist.com/projects/ready-for-100.
5For more information, please refer to the media release “Skills support programme by Prudential Singapore and SkillsFuture Singapore to accelerate SMEs’ business transformation and growth” https://www.prudential.com.sg/about/newsroom/press-release/2020/skills-support-programme.
6For more information, please refer to the media release “Prudential Singapore boosts support for SMEs in their digitalisation efforts and business growth” https://www.prudential.com.sg/about/newsroom/press-release/2022/prudential-singapore-boosts-support-for-smes.
7For more information, please refer to the media release “Prudential launches mobile app to provide SME employees with easy access to medical and company benefits” https://www.prudential.com.sg/about/newsroom/press-release/2022/prudential-launches-mobile-app.