The first SOBA LAB webinar explores how SMEs can build resilience via new technology, partnerships and effective cash management.
KUALA LUMPUR: The first Star Outstanding Business Awards (SOBA) 2022 LAB kicked off with the pertinent question on how to build business resilience via new technology, partnerships and effective cash management.
Moderated by the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) small and medium enterprises (SMEs) committee national treasurer and chairman Koong Lin Loong with panel speakers like PKT Logistics Group Sdn Bhd chief financial officer Pang Kong Chek, RHB Bank Bhd and SME Engagement head Sim Ee Chiew and Credit Guarantee Corp Malaysia Bhd’s (CGC) Branch Sales Management vice-president Sharifah Attashah Syed Ali.
Koong opened the discussion with the observation that after two and a half years since Covid-19 the business community gears up for a recovery, the transition has been a rocky path, as the world faces headwinds from the Ukraine-Russia War, inflationary pressure, supply chain disruptions and issues with the labour market.
He also said that according to ACCCIM’s survey, business communities are still facing cash flow-related issues such as the decrease in the profit, rising costs and more and questions the role of cash flow in ensuring business continuity.
Pang agreed that cash flow is important for the survival of businesses.
He said that the control on cash collections or cash conversion for both receivables and inventory should be kept within control or be improved upon.
He mentioned that receivables are tied to credit control depends on a good credit control policy to manage or reduce the risk of defaulting.
For inventories he said an ideal level of inventory keeping should be monitored to ensure the business operates at an optimum level.
Sim pointed out that SMEs may also find it difficult to optimise their inventory level due to the volatility of raw material prices and fluctuating currency.
He said banks offer many facilities including SMEs loans to enable them to stock up and cater to their increasing business activity post-recovery.
Sharifah stressed that it is important for businesses – big and small – to ensure they have a healthy cash flow and that business owners need to prepare a cash flow statement and conduct regular cash flow analysis.
She noted that the biggest issue that business owners face is in tackling late payments and she suggested offering lead payment bonuses or incentives.
She also brought up invoice financing, which can get some cash flowing in by getting advances on unpaid invoices as well as cash flow forecasting to help entrepreneurs make plans in advance.
On digital transformation, Koong highlighted the necessity of digital transformation for building business resilience and more importantly how to start the journey.
Sim said bank customers now can perform transactions remotely, and even provide business solutions that improve operation efficiency, reduce costs and create the capacity for business owners to achieve the focus to grow their businesses, such as the accounting software or HR solution and also electronic point-of-sales solutions.
He said banks are one-stop centres that offer a wide range of services to customers.
Pang related that PKT Logistics had also adopted digitalisation and automation in some of its business processes, as well as robotics.
However, he shared that digitalisation can start with a small step, such as to utilising and managing costs using an accounting software or with others, which a software vendor can help out.
He mentioned that SME can tap into the SME Digitalisation Grant, which offers a maximum of RM5,000 or the Smart Automation Grant, at a maximum of RM1mil.
Pang advised working with an IT expert who understands the requirements and who can develop, deploy and test the installation in the working environment.
According to Sharifah, CGC holds advisory workshops though its partners to guide its customers on how to expand their business via digital transformation.
“SMEs need to switch from the traditional business environment to more hybrid business models now,” stressed Sharifah. “Equally important is the shift to accepting digital payments as well as QR payments.”
She also brought up the importance of investing in cybersecurity as digital transformation has also resulted in an increase of scams and digital crimes.
Sim shared that banks also offer similar solutions that will help SMEs run their business operations more efficiently and cost-efficiently.
“Banks have integrated a system that is able to provide customer solutions relating to payment and collections, but also other forms of support, to help customers operate more efficiently,” he said.
Koong then pointed out that when an organisation experiences digital transformation, there will be changes that affect human capital and the need to re-skill or look for external talent as their current workforce.
Sharifah stated that changes in the business environment itself may require the talent to be upskilled.
That is to teach the employee an advanced skill set that is relevant to the job or specific duties.
She said re-scaling prepares employees for an entirely new position which is not related to their current job.
“SMEs should know what industry and the knowledge their companies need to grow in order to invest in the right up-scaling or re-scaling programme,” she said.
Pang mentioned that PKT has an education arm which offers courses on logistics.
A short-term course of three months is targeted at school leavers to trains them with the skills needed to work in a logistics environment.
Doing so allows the company to also redefine the importance of a job role in order to attract and retain the talent within the organisation.
“It is the organisational culture that lets us shape individual positions internally so that we are able to employ and retain them.”
From the perspective of banks, Sim said it is important not only to see SME businesses grow but to ensure that they enjoy a continuous well-being beyond banking.
“We brought in business partners to help educate customers and their employees in the areas such as in operations management, human resource and accounting in order for them to do their jobs more efficiently,” he said.
With regards to partnership, Sharifah said that CGC engages with financial institutions to provide financing to its customers as well as engage with all financial institutions, peer-to-peer services and the capacity-building agency to provide financing, alternative financing or advise to the customers through online.
CGC also pairs the SME customers with a bigger or international business player in order to leverage the reach of the larger entity to promote their products.
“Partnership gives great benefit to SMEs by opening up new perspectives, expertise and knowledge, as well as cost-saving in marketing.”
Those interested can watch the full video on the StarBiz Facebook page at https://fb.watch/ey0TgCJWqx/The next SOBA LAB webinar, titled “Future of work: Reinventing the digital workspace” will be on Aug 18, at 3pm.
SOBA 2022 is organised by SMG with CGC, Digi, PKT Logistics Group and RHB Bank Bhd as main sponsors, TalentCorp Malaysia as co-sponsor and Matrade as official trade promotion partner.
Supported by Bursa Malaysia, it is audited by BDO with 988 and Suria as official media partners.
For more information on SOBA 2022, call SMG Events at 017-231 1789 or visit www.soba.com.my.
