George Town: Small and medium enterprises (SMEs) need to embrace digitalisation fast before the second wave of the Covid-19 pandemic hits the country.
Digi SME direct sales head Thew Soon Kheng said that digitalisation was no longer an alternative.
“We are no longer in a ‘new normal’ period. Despite the pandemic, SMEs must think of growth, as there are opportunities in crisis. SMEs must act fast and be agile to adapt to changes to capture these opportunities.
“Digitalisation is now a must if SMEs want to survive through this critical period. They need to embrace digitalisation before the second wave arrives and a second round of movement control order is introduced. SMEs should step up and learn how digitalisation will enhance their businesses, ” he said.
Thew was among the three panelists present at the recent SOBA LAB- themed “Road To Recovery In Restoring Business Sustainability” -held in Lexis Suites Penang.
RHB Bank Bhd SME banking head Yip How Nang and PKT Logistics Group Sdn Bhd chief marketing officer Kuan Eu Jin were the other two panelists.
The panel discussion was moderated by Persatuan Ushawaan Maju Malaysia Penang state liaison chairman Alec Ooi.
Thew said Digi was now offering three different types of bundles for SMEs to go digital.
The three are the essential, productivity, and growth bundles.
“The bundles support a company’s internal and external operations. Once the company applies to subscribe to our products, we will apply for the necessary grants and subsidies from the government for them. For the growth bundle, the SME need only to pay RM580 a month.
“The applications such as the altHR enables the employee to apply for claims and travel requests, while the Omni Hotline transfers calls for fixed lines to mobile phones, ” Thew added.
According to Thew, there are about 980,000 business establishments in the country, of which some 98.5% are SMEs.
“Our digital products are popular, but there’s also room for growth, ” he added.
Meanwhile, Yip urged SMEs to come forward to reschedule and restructure their loan repayments, especially now that the moratorium has ended.
“Their request to restructure or to reschedule their loans repayments will not reflect in their Central Credit Reference Information System report.
“Most SMEs are not coming to us because they are still hopeful that the moratorium will be extended, ” Yip said.
Yip said the federal government’s special relief facility, introduced earlier, was very popular.
“Within two months, all the funds were taken, ” he said.
He added that RHB has come out with its own special relief facility scheme to revitalise SME and help them get back on track.
“The objective of the scheme is to reduce their short-term cash flow burden. There are no guarantee fees, as these will be absorbed by RHB. The base financing rate of our scheme ranges between 4.75% and 6.7%, ” he said.
Yip also said SMEs should run their operations with flexibility.
“They should not depend on only one distribution channel. The more sale channels they have is better, ” Yip said.
Meanwhile, Kuan said SMEs should use this economic crisis created by the pandemic to prepare for the next recession.
“This is because the plans need time to be effective. In 2008, PKT Logistics made a decision to diversify into the non-automotive business segments like food and beverage, electronics, e-commerce, and fast moving consumer goods.
“We wanted 40% of our revenue to come from the non-automotive segments. It took 10 years for our diversification plans to produce results, ” he said.
Kuan said a company could also formulate short-term plans focused on generating sufficient cash to recuperate and to cover overheads.
According to Kuan, SMEs should take the opportunity to expand now, as most contractors are out of jobs.
“SMEs should take the opportunity to expand their operations, as they could save about 20% of the expansion cost.
“Contractors are willing to negotiate because they need jobs to sustain their overhead cost, ” he said.
Kuan added that PKT recently completed RM120mil The Ship Campus in Batu Kawan and a RM150mil new logistics hub in Bukit Kayu Hitam, Kedah.
“An SME needs also strong leadership that can inspire confidence in times of crisis, calm the workers’ fears, and formulate workable immediate action plans.
“These leadership qualities include calmness and ability to look at the big picture, ” he added.
In a sharing session, Credit Guarantee Corp Malaysia Bhd (CGC) Prai branch manager Wan Faizah Zakaria said: “SMEs can leverage on the restructuring and rescheduling (R&R) assistance offered by CGC post-moratorium. We are ready to serve the SMEs via our 16 branches nationwide and our 24/7 portal – http://www.imSME.com.my”.
Also present to share their success stories were past SOBA winners M Summit Group special officer to the managing director and M Summit 191 Executive Hotel Suites general manager Moh Wei Ken and Ideal Vision Integration Sdn Bhd founder Edmund Yuen.
SOBA 2020 is organised by SMG with Digi, PKT Logistics Group and RHB Bank as main sponsors, Credit Guarantee Corp as co-sponsor and the Malaysia External Trade Development Corporation as official trade promotion partner. It is endorsed by the Ministry of International Trade and Industry, supported by Bursa Malaysia and audited by BDO with dimsum, 988 and Suria as official media partners.
Submissions for SOBA are now open.
Locally incorporated enterprises not part of a multinational or listed group with foreign equity not exceeding 50%can participate by completing the application form online via http://www.soba.com.my or submitting the hard copy to the organiser at Menara Star, Petaling Jaya. The deadline for entries is Dec 4,2020.
For more information on SOBA 2020, call The Star Events Business Unit at +603 7967 1388 ext 1871(Lily)/ 1104 (Shamenei) or visit http://www.soba.com.my.