Every year, an SME Development Survey is conducted in Singapore to understand the business outlook of the country, especially among SMEs. This year, the survey found that a majority of SMEs in Singapore do not expect growth in revenue. To turn this around, the survey showed that companies are increasingly using automation and information technology to increase their productivity.
To get some insights on some of the common challenges faced by SMEs in Singapore, we spoke to Henrik Petersen, Director of sales and marketing at Deskera. As part of Henrik’s job, he meets with SMEs around the world to understand their business needs and help optimise their business processes, such as accounting, payroll, customer relationship management and human resources using integrated business applications.
According to Henrik, some of the common challenges faced by SMEs include cash flow management and rising manpower cost. “Customer billing and payment collection are still very manual and messy processes for many SMEs that I have met; this can pose a serious problem, especially when a firm is looking for funding to support their growth,” Henrik shared with Vulcan Post.
Another common challenge faced by SMEs — especially the ones that are growing fast — is that they are in need of improving their productivity. This happens when business processes and systems are not able to support their growing workload and increased head count. “What usually happens is that firms end up hiring more people to tackle the increasing workload, instead of re-looking at processes and supporting business systems.
“SMEs oftentimes have multiple disparate systems to manage their business. This includes accounting software, payroll, HR, sales, inventory and a huge number of Excel reports. This creates data silos and more people are needed to keep all the systems updated. Plus, this will turn into a waiting game where everyone is waiting for the other department to update inventory, customer and sales data. This result in low productivity and existing business applications are unable to provide timely business insights to make decisions,” Henrik shared.
Perhaps more importantly, one of the biggest problems on the front line that SMEs can face, and which can be detrimental to the business, is that customer service representatives or sales representatives might not be able to answer customer questions accurately or provide appropriate assistance due to inaccurate or old data.
So for most SMEs, in order to grow and stay afloat, the focus should be to look for productivity improvements and better business insights to grow their business revenue. Sales processes and sales teams have to be managed more effectively to deliver more consistent and predictable revenue growth from existing and new customers.
To achieve this, Henrik shared that a lot of SMEs are increasingly looking for productivity improvements and better business insights.
“This includes automating processes to reduce the dependency on manpower and finding more effective ways to do business. Many SMEs struggle with disparate software application and data silos. Employees spend too much time on manually entering and moving data between software applications. SMEs are looking for an integrated business application that can support accounting, sales, procurement, inventory, HR, payroll and project management without having to go through large-scale consulting projects usually associated with ERP implementations,” Henrik added.
Speaking of automating processes, Henrik highlighted some of the benefits of implementing integrated business applications. Other than requiring less manual work to input and update business data, companies will also have better business insights. They will have updated and accurate business data and information available to help make timely decisions. Another benefit is that companies will have improved compliance with the built-in GST, CPF and statutory reporting.
In the past, integrated business applications and ERP software required large upfront investments in software licenses, hardware, and consultation; that is no longer the case with cloud-based solutions like Deskera. Today, businesses can start with accounting and later add more modules for CRM, HR and payroll, and still benefit from having an integrated business application, since all modules are based on the same platform.
SMEs will benefit from starting with the right business platform instead of buying separate applications, like small business accounting software and payroll solutions. For those interested to find out more, Deskera recently published a free eBook about how SME’s can effectively manage business growth.