CEO Conference 2019: SMEs are not that far behind in digital adoption

• In order to survive, SMEs need to go digital

• Sometimes it does not matter the number of resources you have available

Malaysia Digital Economy Corporation (MDEC) projected that the digital economy in Malaysia is set to contribute as much as 20% to the country’s Gross Domestic Product come 2020. That is a significant portion of the economy that will require Small and Medium Enterprises (SMEs) to up their game by going digital.

MDEC vice president for enterprise development Gopi Ganesalingam said that in order for SMEs to survive in today’s world they need to go digital. He spoke during a panel session during DNA and Leaderonomic’s CEO Conference 2019 in Kuala Lumpur

But often times SMEs are unsure where to begin in their transformation process. What is required and what are the potential digital revenues or areas in their process that can be digitised?

To this end, he outlined how MDEC’s efforts to help traditional brick-and-mortar SMEs to transform themselves digitally through the Digital Transformation Acceleration Program (DTAP) that aim to directly address those questions.

Having seen many SMEs undergo this process, Gopi noted that the first and most important thing is to have a leader that is brave, have the foresight and genuinely wants to change as it all starts with the leader.

DNA’s founder Karamjit Singh couldn’t agree more with Gopi’s point of leadership. He cited how DNA as a tech content company has partnered with Leaderonomics to organise the CEO Conference 2019 to help convince SME leaders to take on digital adoption. After all, no two elements can move forward without the other.

Sometimes it is not about the resources that you have, as even large companies are taking baby steps in their digital transformation journey, so for smaller SMEs they need not worry because they are not that far behind.

A tale of two SMEs and their digital transformation journey

In fact, on the panel were two entrepreneurs who initially started as traditional SMEs that used manual processes but have since transformed their businesses by leaps and bounds thanks to successful digital transformation strategies.

The first was Kat Technologies founder Khairol Annuar bin Mohamad Tawi, an entrepreneur with 25 years of experience having founded his company in 1994. In the early days, Khairol’s business sold prepaid cards for the three major telcos of the time: Maxis, Digi and Celcom.

However, as his business grew to 14 branches nationwide, he found it challenging to reconcile sales from the different branches and ensure that those sales were banked into the company account.

“It was because of this problem that we built our own solution as the other pre-existing solutions in the market were just too expensive for an SME like ourselves,” said the executive chairman for the KAT Group of Companies.

What began as a humble solution built on Excel and programmed using Microsoft Visual Basic grew to an enterprise scale solution using Microsoft SQL and .NET.

In fact, Kat Technologies’ solution was successful enough that it was spun off as another business. They are even working to develop a lighter version of the system to cater for smaller enterprises.

Khairol added that the platform, which runs on a mobile app, they have today is also transforming their dealers.

Karamjit commended Kat Technologies’ approach of taking their own solution and turning it into a product that would help their supply chain.

In a similar vein, Human Resource (HR) solution provider iTalent Management Sdn Bhd started out with manual processes during the first three years of its life. Founder and chief executive officer Victor Phang recalled his company faced budget constraints and was not able to scale up to cater to increasing demands.

Realising that they could not sit idly by, the company built its own solution and with the help of MDEC they were able to gain exposure around Southeast Asia and are now present in six countries.

Phang shared that a successful digital transformation journey comes down to four things: people, policy, process and infrastructure.

Based on his experience, people are the most crucial part of the equation as it very much depends on their readiness to accept change. Sure, there are those who are resistant to change due to fears over their job security but it all comes down to training them and up-skilling them.

Policies are something that SMEs tend not to follow closely as it changes constantly, Phang notes. But in order to automate processes there needs to be a consistent policy otherwise no system can work. That falls in line very closely with processes, which need to be communicated clearly.

To round things up, Phang said to be a high tech company you need the right digital tools and companies need to be prepared to provide these tools to their staff should they require it.

CEO Conference: Malaysia Living Dangerously is sponsored by Telekom Malaysia Bhd as Telecommunications Partner, Malaysian Digital Economy Corporation (MDEC) and Pos Malaysia Bhd as Sponsors. The Malaysian SME Association endorsed the conference.