Digitalize your business in phases, but keep the big picture in mind. Photo credit: Pexels
Since the pandemic struck, the need for digitalization has become more crucial than ever. With employees working from home, most companies have taken their operations online out of sheer necessity as hybrid work becomes the norm.
Yet not all SMEs take to digitalization like a fish to water. Some have no idea how to start their digitalization journey.
Mr KH Koh, the Director and Process Consultant of Highnix, which offers cloud-based software and accounting systems for SMEs, says the first thing that SME owners should do is understand what “digitalization” means.
“Digitalization means to improve one’s workflow, work processes and productivity. SME owners must first understand their work process versus the digitalization process,” explains Mr Koh.
For example, for a simple sales quotation, an employee usually has to manually record it in a book with the necessary information such as the amount and name of the customer. Next, she has to open a spreadsheet and save the information under another file name.
When the goods are ready, they are delivered. The employee then checks the invoice, records the transaction and bills the customer. If payment is not made, she has to follow up with the customer repeatedly.
“The entire process — from quotation to billing — can take 20 steps. But with a digitized system, the steps in the work process can be reduced by 30% to 70%. The system should be able to monitor the order status through various stages such as ‘delivery’ to ‘invoice’. Some systems also allow the customer to scan and pay via a QR code,” he says.
So what is the right way for SME owners to kickstart the digitalization process? SMEs should plan for the long term, but launch the digitalization in phases, says Mr Koh.
According to him, companies should not try to do everything at once, a “sure-fail” approach. Instead, he recommends they take the all-important first step. After a year of implementation, go on to the second phase, and so on.
“Your employees need time to learn the processes, and get used to the new systems. So have a long-term plan in mind and an idea of where you want your company to go.”
So how will SME owners know if they have succeeded?
“In general, if the success rate of implementation is high, your costs will be lower,” he shares.
He cites another mistake that business owners tend to make — failing to ensure the integration of their human resource management system (HRMS) with other systems.
He stresses the importance of using systems that are capable of integration. Such integration cannot be done without a data exchange module.
Using a “half-cloud” solution will only cause data integration problems in the future, explains Mr Koh.
“Such systems may not have web services, which are essential to make sure web-based applications are able to exchange relevant data.”
The seamless exchange of data is the crux of any cloud-based system.
Such data exchange is done through Application Programming Interfaces (APIs), which enable a seamless exchange of information between, for example, a HRMS that processes salaries and leave, with other interfaces that are hosted on a cloud-based system.
This is the shortened version of an article that was first published in Lendingpot’s April 2021 newsletter.
Belinda loves thinking about random stuff, and collecting useless bits of facts and trivia. She often roots for the underdog, and believes the world needs more happy endings.
