PETALING JAYA: Over 40% of both large companies as well as micro, small and medium enterprises (MSMEs) are expecting business recovery from 2022 to 2023, according to a recent EY business pulse survey of over 500 companies.
Almost half of the large companies (46%) and one-third of MSMEs (33%) indicated they had adapted well (positive to very positive) to the Covid-19 pandemic.
However, 25% of Malaysian companies had been adversely impacted (negative to very negative).
The EY survey also noted that the majority of Malaysian businesses were prepared to live with Covid-19 (86%) and were prioritising technology adoption in the immediate term (77%) as they fast-tracked their adaptation to the new normal.
“Despite two years of challenging conditions, businesses have remained focused on building their resilience, but they must continuously evolve to capture the opportunities ahead,” said Datuk Abdul Rauf Rashid, Malaysia managing partner, Ernst & Young PLT, in a statement.
Both the large companies (48%) and MSMEs (37%) indicated that technology had the most positive impact on their business during the pandemic.
The movement restrictions in the wake of the pandemic had accelerated the companies’ adoption of technology and their transition to a digitally-enabled work environment.
In contrast, the respondents experienced more negative impact in the financial (44% of large companies; 63% of MSMEs) and supply chain (54% of large companies; 44% of MSMEs) areas.
“While the large companies have better access to technology and talent, challenging circumstances call for organisational agility to navigate disruptions, address current gaps and accelerate measures to build resilience –it is about the survival of the fittest,” said Chow Sang Hoe, EY Asean consulting leader and Malaysia consulting managing partner, Ernst & Young Consulting Sdn Bhd.
In the short term, 85% of the respondents were prioritising the improvement of employee safety and the implementation of standard operating procedures (SOPs) including flexible work arrangements, while 77% were focused on enhancing digitalisation to facilitate contactless information technology or IT infrastructure.
Moving forward, the key business priorities will be on reskilling people (74%) and adopting digitalisation (74%).
At the same time, a higher proportion of MSMEs were paying greater attention to readapting the business size, changing the business model or entering new business ventures (58%) and improving their financial position (48%).
Also, the survey respondents indicated that they required further support in upgrading digital technology (51%), adapting the business to be more resilient (47%), accessing resources for business recovery (42%) and redesigning physical premises (40%), to help them better prepare to live with Covid-19.
Beyond the recovery and improvement phase, the respondents indicated that they needed guidance in finding new markets (58%), forging new partnerships (54%), accessing digital skillsets and talent (53%) and developing new business models, products and services (53%).
“With the evolving market disruptions and changing consumer preferences amplified by the Covid-19 pandemic, businesses need to prioritise capability development as they seek to transform their operating models for the future. Speed and agility are of the essence,” said Chow.