The Covid-19 pandemic has been a huge wake-up call for businesses worldwide. It has forced them to re-evaluate their operations and find ways to become more agile and adaptable.
In Singapore, innovation and digital transformation were already key priorities for businesses even before the Covid-19 pandemic.
Suffice it to say that the government has been very supportive in this journey, and now it’s time businesses did their part.
So, how can businesses go about digital transformation and innovation in Singapore?
We promise to get to that, but after we’ve answered the question – what is digital transformation?
What is digital transformation?
In its simplest form, digital transformation is the process of using digital technologies to create new or improved business processes, experiences, and products.
In other words, digital transformation is the adoption of digital technologies in:
- The vision and mindset of the company’s leadership
- The way products and services are designed and delivered
- Customer relations and experiences
- The way employees work
- The way business partners collaborate
- The way the company is governed
However, it’s important to note that digital transformation is not just about technology. It’s also about people and culture.
And since no two businesses or companies are the same, digital transformation will always mean something different for each organisation.
Here’re a few examples of what digital transformation may mean to some businesses:
- The increasing use of artificial intelligence (AI) and machine learning
- The need for organisations to be data-driven
- The importance of having a strong online presence
- The rise of the digital customer
- The increasing use of cloud-based solutions
- The need for organisations to be agile and adaptable
- The importance of cybersecurity
- The rise of the digital workplace
- The need for reskilling and upskilling employees
- The importance of having a strong partnership ecosystem
So, Why Does Digital Transformation and Innovation Matter for Businesses in Singapore?
What are some of the benefits of digital transformation?
- Improved competitiveness: In today’s digital age, it’s no longer enough to be good at what you do — you need to be the best. Digital transformation can help you stay ahead of the competition by making you more efficient and innovative. You’ll reach a wider audience, launch new business models and be able to scale quickly.
- Increased revenue and profitability: By improving operational efficiency and creating new revenue streams, digital transformation can help businesses grow their bottom line. Gartner surveyed 388 CEOs and senior business leaders across industries, where 56% of respondents said their company’s digital transformation initiative led to revenue increases.
- Improved employee productivity: Digital transformation can help businesses enhance employee productivity by automating tasks, providing employees with the tools they need to do their job, and freeing them to focus on more strategic tasks.
- Enhanced decision-making: By leveraging data and analytics, businesses can make more informed decisions about their products, services, and customers.
- Increased Efficiency: You can use digital solutions to automate business processes and tasks. This will free up time and resources that can be used elsewhere.
- Drives Innovation: Digital transformation can help businesses drive innovation by creating new products, services, and business models.
- Reduced costs: Businesses can significantly reduce their operation costs by automating some of their business processes and tasks.
- Business Continuity Planning: In the event of an unforeseen disruption, digital transformation can help businesses quickly recover and continue operating with minimal disruption.
That’s the lesson we drew from the just-concluded COVID-19 pandemic. Digital transformation is no longer nice-to-have – it’s a necessity.
The pandemic has forced businesses to re-evaluate their operations and find new ways to remain competitive.
Why is Digital Transformation So Important Now in Singapore?
What makes “digital transformation” so important right now in Singapore — and not something you can defer to at a later time?
More Customers are Transacting Online
The pandemic has driven more customers online. E-commerce is now the preferred shopping method for most consumers in Singapore.
A study by Visa found that 74% of consumers in Singapore now shop online frequently and that the pandemic has accelerated the shift to e-commerce.
Combat Rising Labour Cost
The costs of doing business in Singapore are rising. Businesses are under pressure to increase productivity and find ways to do more with less.
One way to combat rising labour costs is to invest in digital technologies that can automate tasks and improve efficiency.
A Resurgence in Manufacturing
The pandemic has spurred a resurgence in manufacturing as businesses look to build resilience in their supply chains.
According to a Singapore Economic Development Board (EDB) survey, “the COVID-19 pandemic has heightened awareness among Singaporean manufacturers of the importance of having a robust and agile domestic supply chain.”
As businesses look to strengthen their supply chains, they must adopt digital technologies to remain competitive.
A New Mindset
Businesses need to adopt a new mindset to succeed in the digital age. They have to experiment and embrace change.
As Singapore’s Minister for Trade and Industry, Chan Chun Sing, said in a recent interview, “Companies that are afraid to experiment, to test new business models will find it hard to survive, let alone thrive in the new digital economy.”
The time to invest in digital transformation is now. It’s the only way businesses can improve their competitiveness, drive growth and build resilience in their operations.
The Singaporean Government is Advocating Digital Transformation
The Singaporean government is a strong advocate of digital transformation. It has been investing heavily in digital technologies and initiatives to drive the country’s digital transformation.
- the Smart Nation initiative, which aims to harness technology and make Singapore a more liveable and sustainable city;
- the Industry Transformation Programme, which is helping businesses in key sectors such as manufacturing, retail, and healthcare adopt digital technologies;
- the Digital Economy Framework for Action, to help enterprises digitise their operations;
- the Infocomm Media Development Authority, which is promoting the use of Infocomm media technology in Singapore
- the SMEs’ GoDigital Programme, is helping small and medium enterprises (SMEs) digitise their businesses.
In 2020, Singapore allocated more than SG$500 million (US$363 million) to support local businesses in their digital transformation journey.
This shows the government’s commitment to driving digital transformation in Singapore.
Digital Transformation is not about Technology; It’s About Business
Digital transformation is not just about technology. It’s about business. It’s about using technology to create new value for businesses and customers.
To succeed in digital transformation, businesses need to start with a clear understanding of their customers and what they need or want.
They need to define their business goals and objectives and then identify the technology solutions to help them achieve those goals.
Digital transformation is a journey, not a destination. Digital transformation is a journey, not a destination. You have to start small and gradually scale up.
Don’t try to do everything at once. Focus on one or two areas and then expand from there.
Is Digital Transformation Going to Stop with the Pandemic?
The pandemic has been a major catalyst for digital transformation. It has accelerated the adoption of digital technologies and forced businesses to rethink their operations.
However, digital transformation is not going to stop with the pandemic. It’s the future or where business is headed.
Businesses that have not started their digital transformation journey need to do so now.
The pandemic has shown us that the future is digital, and businesses need to be ready for it.
Are there Government Grants for Digital Transformation?
Yes, and not just one or two, but many.
In 2020, the Singaporean government allocated more than SG$500 million (US$363 million) to support businesses in their digital transformation journey.
Some of the government grants available include:
- Productivity Solutions Grant (PSG): PSG supports businesses in adopting pre-scoped IT solutions and equipment to improve productivity.
Eligible businesses can receive up to 70% of the cost of the solution, capped at SGD$30,000 per company.
- Enterprise Development Grant (EDG): The EDG supports businesses’ transformation and internationalisation journey.
The grant has no cap.
- Advanced Digital Solutions by IMDA (ADS): The ADS grant helps businesses develop and implement innovative digital solutions.
The grant covers up to 80% of the costs, capped at SGD$200 million per company.
- Startup SG Tech: The Startup SG Tech grant supports start-ups in their journey to develop and commercialise innovative technology solutions.
Companies can receive early-stage funding to commercialise their proprietary technology, provided the qualifying solution is viable.
5 Different Areas a Business Should Focus on for Digital Transformation
- Customer Relationship: Use digital transformation and innovation to improve customer relations, honing and redefining the path to purchase, all while simplifying and streamlining their buying experience.
- Business Processes: Transform and digitalize business processes for greater efficiency, effectiveness, and agility. For instance, you can create a digital workflow or use RPA bots to automate some manual processes.
- Data and Analytics: Use data and analytics to drive decision-making, improve operations, and understand customers better.
- Employee Experience: Improve employee experience with better tools, communication, and working conditions. For example, provide employees with the ability to work from anywhere or give them access to better communication and collaboration tools.
- Unique Experiences and Value Propositions: You have to offer something different or unique that others don’t have. That could be in the form of a better customer experience, a more personalized service, or a faster and easier way to purchase your product or service.
Simple: just figure out how to use digital transformation to improve your customers’ experiences or make their lives easier.
Real-time Examples of Digital Transformation & Innovation in Singapore
It doesn’t have to be complicated or expensive.
Digital transformation can be as simple as moving from paper records to excel spreadsheets or using an online booking system instead of a physical one.
Some examples of digital transformation and innovation in Singapore are:
The coffee chain was one of the first to roll out digital ordering and payment in Singapore. Customers can order and pay for their coffee using the Starbucks app.
Their digital transformation journey began in 2009 when they launched Starbucks Digital Ventures. The Starbucks mobile app provides an integrated user-friendly digital loyalty program, mobile payment, and in-store navigation to enhance customer experience.
At the time of writing this, the app has been downloaded more than 19 million times in the US alone.
IKEA has been consistently ranked as one of the most innovative companies globally.
In 2009, before Facebook competition rules were implemented, IKEA introduced gamification on the platform, which allowed customers to win items in their showrooms by tagging themselves in item photos.
IKEA has also been an early adopter of AR technology, using it to create prototypes and personalized products for customers.
They even partnered with Apple to co-create IKEA place, an AR app that allows users to virtually place IKEA furniture in their homes and see how it would look.
JetBlue has been around since 1998, but it has stayed relevant by constantly innovating. In 2013, they became the first US airline to offer free in-flight Wi-Fi and live TV.
They have also introduced many other digital services such as paperless boarding passes, real-time flight updates, and inflight purchases payable via Apple pay.
Netflix is an excellent example of a company that has disrupted the traditional TV and movie industry with digital innovation.
It began its journey in 1997 as a DVD rental service but has since become a global streaming giant. Some of their game-changing innovations include developing their own content, personalization recommendations, and no commercials or ads.
These are just some examples of digital transformation and innovation in Singapore. As you can see, it doesn’t have to be complicated or expensive to make a difference. Sometimes, it can be as simple as using technology to improve the customer experience or make their lives easier.
How to Get Started on your Digital Transformation Journey
The key to successful digital transformation is to start small and scale up as you go. Focus on one or two areas that you want to improve and work on those first.
As you start to see results, you can begin to roll out more initiatives and eventually transform your entire business.
Here’s a step-by-step guide on how to get started:
Assess your current situation:
Take a look at your business and see where you’re at in terms of digital maturity. Are you still using paper records, or are you already using cloud-based software?
Before you embark on your digital transformation journey, it’s important to understand where you’re coming from. Check to see if there are any weaknesses in your existing business processes that technology can address.
What inefficiencies do you want to fix? Are there bottlenecks in your workflows?
And is there a way technology can help you automate or streamline some of the processes?
Define your goals:
Once you’ve assessed your current situation, you need to define what you want to achieve with digital transformation.
Are you looking to improve customer experience? Do you want to increase operational efficiency and reduce costs?
Or are you looking to create new revenue streams and enter new markets?
You have to make sure you have a clear idea of what you want to achieve before going ahead and investing in technology.
Define Your New Business Processes:
Once you’ve defined your goals, the next thing to do would be to define your new business processes.
Note that the technology set you choose all depends on the scope of your digital transformation project.
You might even be forced to overhaul your entire business operations and IT infrastructure if you start from scratch.
For small transformations, you may be required to adopt new software solutions or applications. But for more radical changes, you might need to consider investing in new hardware, like cloud-based servers or IoT devices.
For complete overhauling of business processes, it’s recommended that you hire strategists and researchers to game out different future scenarios for your company.
Identify What Tools and Technologies You Need:
Once you’ve defined your business processes, the next step is to identify what technology tools and platforms you need to support those processes.
Do you need a new CRM system? Or do you need a mobile app to improve customer engagement?
Since your company won’t need all the latest technology innovations and tools, you just have to identify a few that you think will benefit your business the most.
You can start by surveying your employees to see what tools they’re using and what they think would help them be more productive. You can also look at your competitors to see what technology they’re using.
Determine KPIs and Metrics:
Key Performance Indicators (KPIs) are the helpful metrics you’ll want to track to gauge whether or not your digital transformation has long-term viability.
Determine what KPIs and metrics you’ll need to track to assess your digital transformation’s success. This might include customer satisfaction, operational efficiency, user lifetime value, hours saved, business sustainability, customer experience, or employee productivity.
Don’t just set goals for your organization as a whole. Instead, set goals for your employees, department, and processes before tying them all back to your company’s overarching objectives.
By setting achievable business goals, along with reasonable timelines, you should be able to tell if your digital transformation is working or not.
Implement Your Changes:
Once you’ve planned everything out, it’s time to implement the changes.
This is where you’ll need to allocate resources, train employees on new processes and tools, and set up the necessary IT infrastructure.
You might need to hire outside help to manage the transition, especially if you’re overhauling your entire business operation.
Here’s what you should keep in mind when implementing changes:
- Start small, with low-risk projects, or a selected subset of customers
- Start with a small team or selected departments
- Build on habit, rather than trying to change everything at once
- Communicate and get buy-in from employees, customers, and other stakeholders
Evaluate and Adjust Your Transformation:
After implementing your changes, the next thing you would want to do is evaluate how well they’re working.
Are your new processes and tools helping you achieve your goals? Are employees using them as intended? Are customers happy with the changes?
If not, don’t be afraid to adjust your transformation.
Constantly assess and adapt your plans to ensure that you’re on the right track.
Digital transformation is not a one-time event. It’s an ongoing journey that should be constantly reviewed and updated to ensure everything aligns with your overarching company goals.
Make sure to document your successes and lessons learned so that you can share them with other departments or business units.
Common Digital Transformation Challenges and How to Overcome Them
Digital transformation can be a daunting task, especially for large organizations. Here are some common challenges you might face during your transformation and some ideas on how to overcome them.
Lack of Senior Management Buy-In:
One of the biggest challenges you might face is getting buy-in from senior management.
This is because digital transformation can be a huge undertaking that requires a lot of time, money, and resources.
To overcome this challenge, you have to begin by clearly communicating the benefits of digital transformation to your senior management staff. Show them how the initiative will improve operational efficiency, customer satisfaction, and employee productivity.
Getting Your Employees Digitally Ready:
Employees are often the biggest hurdle in digital transformation.
They might be resistant to change or unfamiliar with new technology.
To overcome this challenge, you need to provide employees with the necessary training and support. Help them understand why the changes are being made and how they can benefit from them.
Lack of Budget
Another common challenge is the lack of budget. Digital transformation can be a costly endeavour, and you might not have the necessary funds to make all the changes you want.
You can overcome this challenge by creating a detailed business case for digital transformation. This will help you get the necessary funding from senior management.
You also want to take advantage of the numerous government grants and subsidies available for businesses in Singapore.
Security and Compliance:
With digital transformation comes increased security and compliance risks.
This is because you’re dealing with more data and sensitive information.
To overcome this challenge, you need to put in place the necessary security measures. This includes things like data encryption, two-factor authentication, and access control.
It will also help to have a solid plan in place for managing and responding to security breaches.
Pay attention to the latest security and compliance regulations, such as the Personal Data Protection Act (PDPA).
Another common challenge is implementation issues. This can happen when you’re trying to roll out too many changes at once.
To overcome this challenge, you need to take a phased approach. Start with low-risk projects or selected business units.
This will help you iron out any kinks in your process before moving on to more complex projects.
Data quality is a common issue in digital transformation. That’s because you’re dealing with a larger volume of data.
To overcome this challenge, you need to put in place the necessary processes and tools for managing data. That includes things like data cleansing, data deduplication, and data archiving.
Resistance to Change:
Change can be difficult for people that might resist it.
To overcome this challenge, you need to communicate the benefits of digital transformation to employees. Help them understand how the changes will improve their work lives.
You should also provide employees with training and support to help them adjust to the new way of working.
10 Important KPIs to Help You Track Your Digital Transformation Progress
As your company begins to develop and implement tech solutions, you must ensure that you are tracking the right KPIs. Doing so will help you track your progress, identify areas of improvement, and make necessary changes along the way.
Some of the most important KPIs to track during digital transformation include:
A Combination of Internal and External Success Metrics:
To get a complete picture of your digital transformation progress, you need to track both internal and external success metrics.
Internal success metrics include things like operational efficiency and employee productivity.
External success metrics include things like customer satisfaction and website traffic.
User Lifetime Value (LTV):
LTV is a metric that measures the total value a customer brings to your company during their relationship with you.
The longer a customer remains a paying customer, the higher their LTV.
To calculate LTV, you need to track three things:
- The revenue a customer generates
- The costs associated with acquiring and servicing that customer
- The length of the customer’s relationship with your company
To track your company’s operational efficiency, you need to track the hours saved.
This can be done by tracking how much time employees spend on tasks before and after implementing new tech solutions.
Revenue growth will help you see if your digital transformation efforts are paying off.
To calculate revenue growth, you need to track two things:
- The total revenue generated by your company
- The total revenue generated by your company in the same period the previous year
Employee productivity is a metric that measures how much work employees can accomplish in a given period.
You can track employee productivity by monitoring the number of tasks completed or time spent on each task.
Employee satisfaction is a metric that measures how happy and engaged employees are with their work.
You can track employee satisfaction by conducting surveys or using engagement tracking software.
Customer Acquisition Costs:
Customer acquisition costs (CAC) is a metric that measures how much it costs to acquire new customers.
To calculate CAC, you need to track two things:
- The total costs associated with acquiring new customers
- The number of new customers acquired
Business sustainability is a metric that measures how long your company can continue to operate without additional funding.
To calculate business sustainability, you need to track two things:
- The total revenue generated by your company
- The total costs associated with running your company
Outbound Marketing Performance:
Companies are pumping a lot of money into advertising and marketing to reach a wide audience.
To see if your outbound marketing efforts are paying off, you need to track two things:
- The total number of leads generated
- The total number of sales made
You can start by listing all the business processes running on the new software. For each business process, ask yourself how the new software has helped to improve it.
Processes that have been made faster, easier, or more accurate are operational improvements. To track operational improvement, you need to compare two things:
- The old way of doing things
- The new way of doing things (with the new software)
This will give you some insights into the overall level of adoption and usability. You can then use this information to simplify processes, introduce automation, and make other necessary improvements.
The customer experience is the most important metric to track in your digital transformation journey.
You need to track two things to measure customer experience:
- Customer satisfaction
- Net Promoter Score (NPS)
How well are your customers satisfied with your products and services? Are they happy with the overall experience? Would they recommend your company to others?
How easy is it to understand your business processes? Do they know what actions are expected of them at each stage?
Team morale is a metric that measures how engaged and motivated employees are.
You can track team morale by conducting surveys or using engagement tracking software.
Rate of Innovation:
Successful digital transformation requires a constant flow of new ideas. The rate of innovation measures how quickly your company can bring new products and services to market.
You can track the rate of innovation by monitoring the number of new products and services launched in a given period.
Core Value Metrics:
Every company has different core values. These values should be reflected in the metrics you track.
Some examples of core value metrics are:
- Employee satisfaction
- Customer satisfaction
- Net Promoter Score (NPS)
- Revenue growth
- Employee productivity
- Rate of innovation
As you implement sophisticated technology solutions such as machine learning and artificial intelligence, you will want to hone in on your core value metrics, not just the bottom line.