Support for employees working remotely is the top technology strategy to accomplishing operational and growth goals in 2021, according to new research from Cisco.
The research found 41% of small and medium enterprises in Asia Pacific rated it as important as online sales platforms for success and growth.
With the shift to a hybrid work environment here to stay, SMEs in the region are expected to continue to invest in technology solutions that support this trend.
According to a forecast by Analysys Mason, the cumulative spend on information and communication technology by SMEs across APAC will exceed half a trillion dollars over five years from 2020 to 2024, with China, Japan and India accounting for three quarters of this.
In terms of industry verticals, manufacturing is expected to account for over half of the ICT spending across all private sector verticals in the region.
"Our study shows that SMEs across all countries, sizes and verticals are focused on remote work support, online platforms and upgrading their existing IT solutions in the year ahead," says Bidhan Roy, managing director, head of commercial - small business, Asia Pacific, Japan, and Greater China, Cisco.
"This accelerated digital adoption will drive recovery and potentially transform industries, including manufacturing and other traditionally capital intensive sectors, to a digital-first and cloud-first model," he says.
"In the current climate, where online is a major consumption channel and dispersed workforces are the norm, our research also finds security and privacy among the chief considerations for SMEs when selecting technology solutions," adds Roy.
"It is crucial for SMEs, who may have limited resources, to work with technology partners that can help them identify secure, reliable and value-for-money technology solutions that best fit their needs, as well as provide ongoing, one-stop and customised support throughout the lifetime of the products and their digital transformation journey."
Cisco sees the following three key trends driving tech and IT transformation for SMEs in 2021:
Seamless integration of online and offline experiences to drive customer engagement, excitement, and loyalty
With lockdowns and safety restrictions forcing physical retail outlets and offices to close, finding alternative channels to sell and deliver products is a challenge that half (50%) of SMEs in APAC are currently facing, followed by improving employee productivity (44%) and boosting revenue (40%). This has transformed the digital touchpoints and overall customer experience throughout the entire customer journey. It has also prompted many SMEs to shift to online sales channels to keep their revenue streams going, with over three quarters seeing the development of an eCommerce platform as an important or very important component of their IT strategy in the year ahead.
The research further reveals that customer experience (59%) is the top priority for SMEs in APAC to digitalsze. As more SMEs move towards a contactless customer experience from targeting to engaging and onboarding their customers, businesses need to rethink how the digital experience can complement and seamlessly integrate with physical interactions to stand out from the competition. SMEs require high-capacity and secure cloud platforms to ensure a smooth online shopping experience that customers can trust. At the same time, they must have efficient systems in place to support the delivery of goods and aftersales services once the transactions have been made.
Leveraging technology including cloud solutions to reduce costs
As a result of the business disruptions caused by the pandemic in the past year, using technology to reduce cost is the top business goal for one in five (18%) SMEs across APAC in the next 12 months.
This is especially prevalent in mature APAC markets (Australia, Singapore, Japan and South Korea), where more than one-quarter (26%) of those surveyed selected it as their top goal compared to 17% in emerging markets (India, China, Indonesia and Thailand).
Enhancing efficiency through automation and hyperautomation is a way for SMEs to achieve this goal. With artificial intelligence (AI) and similar emerging technologies becoming increasingly accessible and affordable for SMEs through solutions like cloud-delivered AI, we have seen an uptick in automation over the course of 2020. The adoption of cloud-based platforms also offers the flexibility to upscale or downscale operations quickly according to business needs and helps enhance cost-effectiveness by minimising fixed costs.
The evolving role of humans from utility to driving value
The shift to remote working in APAC has brought about new challenges and priorities for SMEs. Improving employee productivity (44%) is the second largest business challenge that SMEs in APAC are facing. In mature APAC markets, employee engagement (42%) is the top priority for SMEs digitalisation efforts. In order to stay relevant and resilient in the year ahead, we can expect SMEs to increase their technology investment to address these challenges and priorities by building capabilities equivalent to that of an enterprise in the home.
In addition, the rise of automation enables people to move away from repetitive, mundane tasks and focus efforts on higher value activities instead. This shifts the role of humans from that of utility to one of creating value, which will offer employees a greater sense of achievement and opportunities to upskill and reskill, thereby contributing to wider industry transformation.