Since the emergence of the Covid-19 pandemic, many businesses in particularly those small and medium enterprises (SMEs) have come to a complete stand-still. According to the SME Association of Malaysia, up to one-quarter of Malaysia’s SMEs are at risk of closure over the next few months because of the spread of Covid-19 pandemic.
Many SMEs have started to face the possibility of being wound-up. Since SMES play an important role to the growth of the country’s GDP and being the hardest hit by the disease, it must show great resilience and agility to remain adoptable and relevant to this adverse condition.
SMEs will have to develop several simulations on the strategy. Digitalization. have proven to be beneficial to SMEs as it can assists in avoiding a complete economic halt to the business during the Covid-19 crisis.
Reducing Operation Costs
Research has shown that there is a clear connection between digital transformation and revenue growth. By leveraging modern technologies such as big data, cloud, AI, and data analytic, SMEs will be able to reduce operation costs, optimize the manufacturing process, provide better customer services, and unlock their maximum potential.
In general, SMEs lag behind large firms on digitalization, due to the cost of revamping the IT and digital infrastructure, because SMEs tend to lean heavily on a small number of suppliers and customers and do not have the cash reserves and funding support large companies do. Therefore The Malaysian government has introduced various initiatives to encourage SME digitalization.
Insure Business Sustainability
While the public and private sector have proven their importance in digitalization and adoption of digital tools for SMEs, SMEs need to rethink their business with a focus on how to leverage social media, data analytic, cloud computing, mobile connectivity,and incorporate these tools in their business model.
The digital transformation of SMEs must be integrated into all areas of the business in order to deliver value to customers and to ensure business continuity. It is a continuous process of challenging the current statues as technologies keep evolving and in order for SMEs to survive, they need to incorporate this process to grow and thrive.
Conclusion
Realizing the importance of digital transformation, The Malaysian government has introduced various initiatives to encourage SME digitalization. The Malaysia government through the Ministry of Finance (MOF) is working together with Bank Simpanan Nasional, SME Bank and Malaysia Digital Economy Corporation (MDEC) in managing the grant to eligible Small & Medium Enterprises (SMEs) to adopt digitalisation in daily operations.
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