Digitalisation - Foundation Office Japan / Regional Economic Programme Asia (SOPAS)
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The welcome remarks were given by Ms Cristita Marie Perez, Senior Programme Manager for KAS Japan SOPAS. She introduced the KAS-Woomentum research project on the impact of digitalisation on WSMEs. The first set of country studies was conducted last year and focused on Cambodia, Indonesia, Malaysia, and Myanmar. These comparative case studies showed how WSMEs use and take advantage of new technologies to grow their businesses. The research also outlined WSMEs’ challenges when it comes to access to financing, mentoring, improving business processes, and COVID-19 mitigation and management. This year, the research was expanded to include three additional countries: Singapore, South Korea, and Vietnam. A common theme emerged from the research: The pandemic accelerated WSME’s digitalisation, but these processes are adapted ad hoc and without a clear digitalisation roadmap as a foundational guide. WSMEs have benefited tremendously from digitalisation but most want a systematic set of processes to initiate these changes and sustain these gains.
The welcome remarks were followed by a panel discussion moderated by Mr Huynh Cong Thang of Innolab Asia. The panel was composed of Ms Dieu Hang Nguyen, CEO Business Startup Support Center (Expert Speaker, Vietnam), Ms La Hieu Hue, Managing Director of Van Dat Co., Ltd (Entrepreneur Speaker, Vietnam), and Mr Duke Lee, Managing Director at OTRA (Expert Speaker, South Korea).
The highlights of the panel discussion include the following:
Most research participants mentioned that it can be overwhelming and time-consuming to try and understand all the options in the market and figure out what is suitable for the business. This is especially a challenge when business owners and teams are not as confident of their technological skills. The panel discussed what approaches business owners can take to identify which digital tools are right for their business transformation. Key factors to consider include (1) specifying and making transparent the objectives of the digital transformation to key stakeholders (i.e., top management, employees, key teams) and (2) evaluating the time and costs involved.
While there are many affordable digital tools available in the market for SMEs, upfront costs can still be a major barrier once integration and adoption of more compressive digital solutions become necessary as the business grows. Business owners must decide whether the benefits of digitalising certain business processes outweigh the cost. Evaluating the perceived benefit of digitalisation from a long-term perspective is an important criterion in assessing the cost-benefit structure of a particular digital tool. As such, businesses should possess clear digitalisation objectives. There are several ways of dealing with the cost structure of a particular digital tool: some businesses prefer to pay large upfront costs, while others opt for a “pay-as-you-go” setting. Others self-finance the costs while some turn to credit. All are viable means of dealing with the costs. The important thing is to negotiate the terms and solutions with the service provider.
WSME participants in the study cited team adoption as their number one challenge to implementing digital tools in their business. Resistance from employees can be dealt with by identifying the early adopters and leveraging their influence to encourage those who are still reluctant to adopt new technologies. Other incentives include verbal praise and monetary benefits as well. It is also important that upper management is involved and committed to the digital transformation so that they can be the example for the rest of the business to follow. In terms of finding the right people for digital transformation to happen, the panel suggested that SMEs can play a role in encouraging the development of new digital talents within their companies by creating a supportive environment for their employees. This might be more effective than finding these talents outside as every company has its own digitalisation goals and paths to achieve them.
Questions from the audience mainly focused on how to balance the time and opportunity costs demanded by the digitalisation process. The panel advised that clear goals and objectives are necessary at the start of the digitalisation process and that these should be complemented by commitment and consistency during the implementation process. Breaking up the implementation process into phases will also help in making the transformation more manageable and cost-effective. The choice of which digital tool to adopt is based on the needs and the priorities of the business; there is no “one-size-fits-all” solution. Finally, all panellists unanimously identified people or human resources as the most difficult factors to manage in the digital transformation process due to the various aspects to tackle in influencing people as well as the greater importance of human resources as the “bones” of the business. A common ground needs to be established at the beginning of the change management process and small changes can be a good start for the process.
Ms Mouna Aouri gave the closing remarks of the webinar and invited everyone to join the next series and the publication launch (of “The Path to Success Volume II”) in December 2021.