A survey by United Overseas Bank (UOB) has found that two in five or 41% of SMEs that implemented digitalisation initiatives in 2020 experienced stronger revenue growth than non-adopters.
The UOB SME Outlook 2021 Study, which surveyed 782 local SMEs with revenue less than $100 million, was conducted between late November to early December 2020 to understand the state of digital adoption among SMEs in Singapore and the support they desire for their digitalisation needs.
The study found that SMEs that had digitalised their entire business or multiple areas reported better revenue growth than those that digitalised only one area. In contrast, six in 10 SMEs that did not adopt any digital tools saw a decline in their 2020 net revenue as compared with 2019.
The study also found that SMEs that have digitalised are also more optimistic about their 2021 outlook. Three in five or 58% of SMEs who have digitalised said they are expecting revenue to grow this year, compared with just 32%of SMEs among non-digital adopters.
Seven in 10 SMEs that have adopted digital tools also feel more prepared for a post-COVID-19 business recovery, compared with four in 10 SMEs among those who have not yet digitalised their business.
Lawrence Loh, head of group business banking at UOB says that digitalisation offers businesses opportunities that have a direct impact on their revenue.
SEE:Only 30% of SMEs flagging cash flow concerns, compared to over 70% in February, according to DBS survey
“The UOB SME Outlook 2021 Study demonstrates that close to one in two SMEs who proactively took steps to adopt digital tools last year are already seeing benefits such as greater productivity and efficiency gains, improved customer experience and higher revenue, even in a volatile business environment,” he says.
The study saw productivity and efficiency gains emerge as the most significant benefit of digitalistion. SMEs in business services, manufacturing and engineering, community and personal services, technology, media and telecoms as well as consumer goods sectors saw the highest percentage increase in productivity gains y-o-y.
72% of SMEs that have yet to adopt digitalisation are smaller businesses that cite expensive cost, cybersecurity concerns and lack of digital skillsets among their top reasons.
Looking ahead, marketing and inventory management are the two top digitalisation priorities for SMEs, followed by payroll, accounting and sales. In contrast, last year saw electronic payments and electronic invoicing rank as top priorities.
