Digitalisation in Singapore – 76% of businesses are now operating virtually since COVID-19

Published on 26/01/2021 by Sonia Navarrete

Small and medium business in Singapore are embracing digital tools as a means to cope during the pandemic, but there is also a need for a long-term plan for business continuity.

In Singapore, the coronavirus crisis has accelerated digitalisation and digital transformation in many aspects of our lives, from our lifestyle and hobbies to work. However, the pandemic had a much bigger impact on how businesses leverage technology to ensure continuity – from the way businesses connect with employees and customers to running administrative tasks and internal processes.

In March last year, the Infocomm Media Development Authority (IMDA) rolled out a “Stay Healthy, Go Digital” initiative to help small and medium enterprises (SMEs) implement safe distancing and business continuity measures by building their digital capabilities such as collaboration tools, online meeting software tools, queue management systems and temperature screening solutions. The initiative helped businesses adapt and become more resilient to economic disruptions.

The state of digitalisation in Singapore small and medium businesses

As we enter 2021, businesses need to shift from using digital tools for disaster recovery to a more strategic use of technology that will drive better business outcomes in a post-pandemic world. Hence, we’ve asked over 500 local SMEs in Singapore about their digital transformation initiatives to date to better understand how they can ensure their technology deployments are delivering business value.

While the survey findings reveal that organisations have shown great adoption of digital tools, they will also need to focus on planning for the long-term and working with technology partners that can help them achieve their business goals.

93% businesses are seeing increase in traffic from Singapore and overseas

In Singapore, many organisations (76%) have seen a boost in digital engagements from customers and prospects since the COVID-19 outbreak last March. 32% report a major rise in traffic to websites, while 44% have experienced minor increases.

Furthermore, 92% of businesses are seeing heavier traffic originating from regions or countries where they had not previously operated in:

website traffic from new regions due to digitalisation

Apart from increased digital customer and prospect engagements, most companies in Singapore (76%) state that they have been conducting the bulk of their business virtually since the start of the pandemic:

surge in digitalisation of singapore organisations

73% of respondents reported that they are using their online channels to drive promotions and sales of their products and services. Businesses are also communicating with customers on product reviews, providing updates and addressing queries – all of which suggests reactive and short-term usage of online channels.

use of digital networks for engagement

While Singapore has been able to successfully transition to Phase 3 of COVID-19 reopening in December last year, it is clear that digital will continue to play a significant role in facilitating businesses in 2021.

Globally, we saw organisations from various industries rapidly accelerating their digital transformation to survive. Today, the way we used to do business has changed for good and businesses’ competitive advantage is now based on how well they adopt these digital tools.

While businesses have been able to engage customers digitally, challenges of digitalisation remain

A successful digitalisation plan starts with understanding the business objectives. For many of our survey respondents, across both the first financial quarter and 2021 as a whole, they’ve identified these priorities: retaining existing customers, shifting business operations digitally/remotely, cutting costs and increasing cash flow.

Businesses are also thinking ahead, where finding new customers and improving brand image ranked high in priority for respondents in the long run.

business priorities 2021

According to the findings, 29% ‘very successful’ and 55% ‘somewhat successful’ of the business leaders surveyed believe they were successful at engaging customers in digital environments, including company websites and social media accounts. But their success may not last forever as they are continuously facing challenges that could affect their business performance in an increasingly digitalised economy.

Over a third (35%) of organisations are finding several key areas of digitalisation considerably challenging, such as the process of enabling online checkout and payments and the shift to socially distanced operational processes, such as contactless delivery.

Challenges of digitalisation

Furthermore, organisations are also encountering issues trying to digitalise internal procedures. Most of the business leaders surveyed experienced moderate or considerable challenges in maintaining team and cross-team collaboration (76%), shifting business processes online (80%), and training employees to use new software (78%).

The key to optimising an organisation’s digitalisation strategy is the need to improve software acquisition and implementation. More than a third (34% and 32% respectively) reported that they are facing considerable challenges in both areas.

40% of businesses will need social media marketing skills in the next six months

For a holistic digital transformation, organisations also need to upskill their workers and equip them with digital skills to gain competitive edge and remain relevant in the digital landscape.

The survey respondents reported they would need these digital skills the most in the next six months: social media marketing, cybersecurity, business intelligence/data analytics and website and app development.

challenges of digital transformation

Seeing that hybrid work formats and digital business models are likely here to stay, one of the findings that was quite concerning revealed that a significant number of companies are deploying new technologies on a temporary basis only.

We asked respondents whether COVID-19 had led them to consider shifting marketing efforts online, 40% reported that they had implemented or planned to implement temporarily. Likewise, when it came to expanding the use of digital selling platforms (e.g. Facebook Shops, Qoo10, Carousell, Shopee, Lazada) 36% were also doing so temporarily.

These temporary solutions could be attributed to how businesses are leveraging their digital environments for short-term goals on sales, promotion, updates and addressing queries. This suggests great potential for businesses to maximise their digital channels to build long-term engagement, reputation, affinity and loyalty.

To survive and thrive in today’s digital age, businesses need to adopt a long-term view on their digital investments from choosing the right tools to deploying them. With over a third (34% “finding the right software” and 32% “software implementation”) of the respondents finding these areas challenging, it is even more crucial to work with the right technology partner.

Business leaders must ensure their choice of vendors and service providers are adept at helping them create a cohesive digital strategy that addresses today’s roadblocks, while anticipating and mitigating future challenges. Partners who can also train and upskill employees are also worth the long-term investment to help businesses derive maximum value from their technology.

Looking to optimise your digital transformation strategy? Check out our catalogue.

Survey methodology

Data for this digitalisation study was collected in December 2020 from an online survey of 538 respondents that live in Singapore.

To participate on the survey, respondents had to be:

  • Employed full-time in one of the following roles:
    • Owner, founder or other head of an organisation
    • C-Suite executive e.g. CEO, CIO
    • President of Vice-president
    • Director
    • Manager
  • Working for a company of up to 250 people
  • Working at the organisation during the COVID-19 pandemic

This article may refer to products, programs or services that are not available in your country, or that may be restricted under the laws or regulations of your country. We suggest that you consult the software provider directly for information regarding product availability and compliance with local laws.


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