The benefits of digitalizing are significant for businesses. But did you know that only close to half of the Association of Southeast Asian Nations (ASEAN) small to medium-sized businesses (SMBs), estimated to be about 70 million, have digitalized a few functions across their businesses? This represents a huge boon for technology solutions providers who can help them through their transformation journeys.
ASEAN SMBs plan to increase their investment in technology
According to TDCX’s recent report, ASEAN SMBs plan to increase their investment in technology by close to 70 percent, with an expected spending of USD 130 billion over the next three years. They are ready to take their businesses to the next level by improving their data analytics and innovation capabilities.
The ASEAN SMBs are focused on transforming their traditional business model to an e-commerce-enabled one. Digitalizing operations such as sales and marketing and customer relationship management in the next two years is also one of their key priorities.
Where are the Consumer Goods, Retail, and F&B Sectors?
For SMBs, companies in the consumer goods, retail, and F&B sectors lag behind their peers in their digitalization journey, with only 16 percent of the companies in this sector indicating that they have digitalized many departments. This presents an opportunity for tech providers to step up and help set SMBs up for success by providing the tools and resources these businesses need to overcome their challenges.
The International Monetary Fund (IMF)
The International Monetary Fund (IMF) forecasts Southeast Asia to grow by 2.7 percent in 2023, substantially faster than the global average. By 2030, the region’s economy is predicted to eclipse Japan’s and be the world’s fourth-largest single market after Europe, the United States (US), and China. This marks the region as a bright spot for US and global tech solutions providers seeking to tap into high-growth markets in Asia outside of China.
Southeast Asian SMBs are Hungry for Tech
TDCX’s report found that 84 percent of SMBs want tech providers to help in their digitalization efforts. Some common reasons are the lack of talent and capabilities to keep up with digitalization. They are looking to tech providers such as cloud providers, system integrators, cybersecurity specialists, as well as digital platforms for the expertise they require as they grow their businesses.
To support their digitalization push, SMBs are looking to work with tech providers that have:
- Strong technical skills (76 percent)
- Industry knowledge (69 per cent)
- Speedy response times (65 percent)
Initiate Digitalization Journeys
The long-term viability of many smaller, entrepreneur-led organizations and even startups will be hinged on their digital capabilities. However, many digital tools and solutions are designed and priced to the needs of larger organizations, according to the World Economic Forum.
In the case of small businesses, tech providers can offer support by helping them identify their risk appetite and the opportunities in their industry that could benefit from greater tech adoption. Additionally, they can promote knowledge sharing and learning on making the most of the digital journey by providing guidance and resources, particularly if they want to scale beyond shores.
The Digitalization Journeys — Challenging
As SMBs mature in their digitalization journeys, things can become increasingly complex and more challenging. Hence, tech providers that offer in-market knowledge and tailored solutions to streamline their business activities can emerge as winners.
Customer Support is Key
The need for better customer support was highlighted by the SMBs surveyed. Customer experience-related issues were the top two reasons behind their dissatisfaction with their existing tech provider. Specifically, these were the speed of responding to customers (74 percent) and the availability of human interaction as part of customer experience (64 percent).
Support, Followed by Customer Engagement Efforts
Such insights point to the need for customer experience to be a key part of the customer engagement strategy. SMBs want external partners that function almost as extensions of themselves, stepping in to help them resolve issues once they occur, and those who are willing to go that extra mile will find a receptive audience among SMBs.
Tech to Enhance Operations and Be Adaptable
Today, besides actively seeking tech providers to enhance their operations, SMBs are also open to switching to a different tech provider. The factors driving this readiness to shift partners are the hunger for more advanced technology (71 percent) and the quest for more responsive customer care (68 percent) and better price (45 percent).
Hence, tech providers that are attuned to the needs of SMBs and empathize with their challenges are likely to create a stronger and more successful relationship. SMBs have limited resources and have a tough job balancing their tech priorities with other organizational goals.
Tech providers, therefore, must be adaptable and capable of understanding each company’s specific requirements at every stage while offering secure integration support and ensuring data privacy.
Small Businesses are More Forward-Thinking Yet Less Standardized Systems
Unlike more prominent companies, SMBs often have less standardized systems, making it even more challenging for tech providers to integrate their solutions smoothly and to service their needs. Their uneven demands and growth trajectories also add to the challenge. Hence, tech providers that deeply understand specific market dynamics and design solutions accordingly are more likely to build long-term relationships with SMBs.
Collaboration is Crucial in Networks and Local Markets
One way of overcoming these challenges is through collaborations with local experts, as they have the local market knowledge, network, and connections to navigate processes effectively and, ultimately, provide new market entrants with a leg up. This will set tech providers apart from their competition.
With solid customer service backed by the support of knowledgeable local experts, tech providers can strengthen their ability to meet the needs of SMBs and more adroitly address the challenges that these SMBs face in their diverse markets.
Given ASEAN’s non-homogeneity, partnering with a digital customer experience outsourcing provider could create more value for tech providers. With the right strategy, solution providers can cultivate partnerships with SMEs and unlock fresh opportunities for growth in the ever-evolving digital economy.
Featured Image Credit: Mikael Blomkvist; Pexels; Thank you!