#1: SMEs will shift into growth mode with a strong focus on digitalisation
In 2021, small businesses accelerated their digital investments to survive prolonged COVID-19 pandemic restrictions. In 2022, they will take a more focused approach to digital adoption.
Some will look to digital tools to expand their customer base and facilitate relationships in the face of an evolving regulatory environment. Others will seek out technology that enhances innovation and supports the development of new products and services. Many small businesses will focus on technology that improves operational processes.
For example, Xero customer Zairyo, an online Japanese gourmet grocer, quickly and seamlessly scaled operations when demand grew by 400% during the circuit breaker, crediting in large part cloud accounting technology supporting Zairyo’s e-commerce platform.
#2: SMEs will tap into data to solve customer pain points
Recent studies show that Singapore SMEs have yet to tap into the power of data to help inform and, or validate their business plans and strategies. This will most certainly change, with affordable and scalable cloud tools empowering businesses to double down on their data strategies in 2022. Yoga studio chain Yoga Movement is building strong data fundamentals with Xero. With performance data available to the team anytime, anywhere, the business is able to adjust sales and attendance campaigns to meet its targets – which is ever changing given the nation’s evolving ‘circuit breaker’ measures. Having a bird’s eye view of its cash flow and financial health allows the business to allocate its budget and investments effectively, as well as plan for upcoming international expansion.
#3: Increased tech spend helps SMEs stay afloat
Technology budgets will increase as more small businesses embark on digital transformation projects to accelerate their post-crisis recovery. According to IDC, at least 20 percent of small businesses globally will cease operations by 2025 if they don’t digitise fast enough.
Xero customer Chua Ee Chien, owner of Jekyll & Hyde cocktail bar cites access to real-time visibility as invaluable in managing and understanding cash flow, to make informed plans for the new year which includes scaling into new food and beverage (F&B) concepts. Xero’s integration with Stripe also allows for automatic recording and bank reconciliation, freeing up invaluable time for him, which is particularly beneficial when short-staffed.
Technology providers who can advise, educate and support customers through their digitalisation journeys will be the beneficiaries of the growing appetite for small business tech adoption.