Digitalization is recognised as the initial stage in enhancing productivity, growth, and decision-making. Those that fail to digitalize will face increased business risk as their competitors become more nimble and secure in the post-COVID-19 environment. According to the UOB SME Outlook 2021 Study, 40% of SMEs who embraced digitization initiatives in 2020 reported a rise in income. The survey, which was conducted with 782 local SMEs with less than $100 million in revenue, also revealed that enterprises that have digitalized their entire business or more than one aspect of their business performed better than those that had only digitalized one area.
Despite the obvious advantages of digitization, the digital objectives of SME respondents may not align with their perceived level of digital maturity. Over half of Singapore’s small and medium-sized enterprises (55.4%) are in the early stages of digital maturity, with digitalization projects mostly misaligned with the enterprise’s overall strategy and many efforts running concurrently across business functions. The majority of SMEs (44.6 percent) are at stage 2 of digital maturity, where digital transformation projects have some alignment with the organization’s enterprise strategy and are begun at the functional or line of business level, with numerous strategies implemented in parallel. Less than one-fifth (10.8) of respondents are still in stage 1 of digital transformation, where activities are mostly informal, tactical, and distinct from the organization’s larger business strategy. Only 3.1% of Singapore’s small and medium-sized enterprises (SMEs) have reached stage 5 of digital maturity, where they have a single digital platform to scale technical advances and consider themselves digital natives.
Take inspiration from typical local SME which is CLP – The 73-year-old company was created at a time when the term “digital transformation” did not exist; nonetheless, they are still in the early phases of adopting digital transformation and have yet to maximise the value they may take from the cloud. Only recently lockdowns and social distancing have forced them to completely rethink how they do business, with implementing smart working solutions quickly in order to remain in business and overcome supply chain disruptions. They began their digital transformation journey by migrating their manual logistics system to a cloud-based system for enterprise resource planning and fleet management.
Therefore, despite ranking first on the maturity index, it is evident that many Singaporean businesses, especially small and medium-sized enterprises, are still in the earliest stages of digital transformation. In the case of SMEs like CLP, this indicates that many processes are still not automated and that organisations are focused on fixing inefficiencies with very limited use of analytics, on the use of reporting tools, and are just beginning to develop a digital plan. This paper investigates the case of CLP, an SME with typical characteristics of a local SME in Singapore, which started operating in the manufacturing sector many years ago but is just getting to start the digital transformation process. This allows us to examine all of the processes required for a SME to adopt digital transformation within their firm.
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