AS small businesses grapple with the shift to digital, there is an increasing need to build stronger collaborative communities among SMEs.
UOB Malaysia country head of channels & digitalisation Yap Kok Tee notes that most SMEs face the same pain points across different sectors and countries and there is much they can learn from each other’s experiences.
“Digital is here to stay. The earlier we get all our key stakeholders, customers and ecosystem partners together, the better it is for us to build a robust and disciplined approach in the way we run businesses in the future, ” says Yap.
As part of its efforts to help businesses transform digitally and scale up, UOB’s accelerator arm, FinLab, recently completed its first round of the Jom Transform Programme in Malaysia. The three-month programme connected its 16 participants with various relevant tech solution providers to help them digitalise their operations and drive productivity and revenue growth.
According to Yap, more than two-thirds of the bank’s SME customers are made up of the second- and third-generations, who will be driving the business using digital technologies.
“If they are doing well, naturally, we will do well. If we can help them grow regionally, this will be very relevant to our overall strategy as a bank, ” he says.
When Finlab launched the programme here in June, some 900 companies expressed an interest in taking part in the programme. This, says FinLab co-head Pauline Sim, shows that SMEs are generally keen to look into ways to digitise their businesses.
However, most don’t know where to start.
“So they look at their business models and prioritise areas to digitalise. Then we source and shortlist tools for them to consider, match them with the tech partners and help them pilot the solution. This will help them start and equip them with the mindset to continuously innovate and have access to the tech ecosystem.
“We wanted to help SMEs who are not born digital to become digital, ” she explains.
Among the companies in the first cohort are Jaya Nets Sdn Bhd and Asahi Suspension Parts Corp Sdn Bhd.
For these manufacturing outfits, one of their main pain points was in inventory management.
“We have a huge warehouse, about 80,000 sq ft and we are still doing manual stockeeping, so there is a lot of room for error and it is not efficient. We wanted a new ERP with good inventory module that can help us resolve this, ” shares Jaya Nets sales manager Lewis Chew.
Although Jaya Nets is already the largest local manufacturer of fishing nets and ropes, Chew, 31, notes that there is still a lot of room for the company to grow with better efficiency and productivity.
The company is also looking into solutions that will help boost its digital marketing to increase exports.
Similarly, automotive parts manufacturer Asahi has been shopping around for a suitable solution for its inventory management.
Head of engineering department Darren Wong, 32, says it needs a system that enables its salesforce to get real-time information about its inventory. Asahi will also be digitising its human resource system.
“There are a lot of solutions out there but there are also a lot that seems ‘scam-ish’. We’ve talked to so many people and they gave us really high quotations. Those are very scary decisions to be made because we don’t want these tech solutions to end up as white elephants.
“We need to manage our capex very efficiently. Technology is like a machine, in terms of investments, ” says Wong.
Chew and Wong are hoping to reduce their cost of production with technology to have a better competitive advantage in the markets that they are in.
“A lot of businesses face this problem. They want to digitalise but don’t know where to start and don’t know what solutions are out there and what’s appropriate for your business.
“There’s so many things and possibilities to approach. We still need to take baby steps in adopting these technologies. At the same time, we don’t want to adopt too many things to minimise our risk, ” adds Chew.
The programme has enabled Chew and Wong to not only meet relevant solutions provider, it has also enabled them to connect with businesses in other industries.
“Our pain points are the same across industries, even though
the solutions may be different. But we could collaborate or something like that. So this type of programmes expand our network and insights into the industry. There’s a lot to learn from each other, ” says Wong.
Yap says the organisers are looking at ways to push for a FinLab community in the future to bring together like-minded people to further catalyse the industry’s digital transformation while also helping them to understand the process.
“It will be good if they, and more, can use this platform so that we can expand the knowledge sharing. We must continue to hold them together and create a community of like-minded people, ” he emphasises.
“We felt it would be good to build on this next year, where all the parties that have already come and converge, can combine their resources and benefit more SMEs next year. The vision is to reach more companies.
“For tech startups, they start out being very collaborative and they recognise that there is benefit in tapping on each other’s expertise.
“For SMEs, (this is something new). Through this programme, there is some level of co-creation with the tech startups and they can see these solutions come to fruition. That needs to be unlocked, for them to see that this is the age of collaboration and co-opetition. The whole value is built when everyone comes together, ” concludes Sim.