MDEC Debunks “Digitalisation is High Investment, Big Effort” Myth

Image courtesy of Mr Muhundhan Kamarapullai, MDEC

It is never too late to start, and to sustain, this digital journey. Again, first-mover advantage will stand your business in good stead in the changed business landscape brought about by the Covid-19 pandemic and the Movement Control Order (MCO).

At a webinar on Tuesday (April 28), K. Muhundhan, Director, Business Digital Adoption of MDEC, shared MDEC’s approaches to help SMEs going forward as well as look into ways to start and sustain their digital journey.

He said MDEC is embarking on many efforts to help SMEs adopt digital tools like remote working, ecommerce, payment operations and such. This is MDEC’s immediate help.

There’s also a platform for SMEs to promote their services online to increase visibility and ability to operate online and digitally.

To raise awareness, it’s also organising hands-on programmes on digitalisation and debunking the myth that digitalisation is a high investment and big effort journey.

Additionally, MDEC is assisting SMEs invest in digitalisation by connecting them to capable technology service providers and funds, thereby also increasing awareness of funds available.

On kick-starting the Malaysian economy post-MCO in terms of business digitalisation, Muhundhan noted the GDP decline will have a direct impact on business sustainability and continuity, citing a World Bank report.

He also noted an IDC report on the main challenges for business at present, such as cash flow issues due to reduced consumer demand while maintaining operational and resources costs, sales issues arising from cancelled/delayed orders/work/projects, and customer engagement problems because disruption in supply chain leads to inability to service clients.

He also cited an SMECorp Survey which showed 41% SMEs in the country responded that business sustainability is of one month only. This is a drop of 7.5% from the first survey (19-26 March 2020).

Meanwhile, Muhundhan said that while some sectors thrive such as ecommerce, media and communications, many are still unable to cope, especially in loss of jobs. These include agriculture (fisheries), services (F&B) and industry (construction), according to DOS Survey Data.

So how can businesses adapt to the new normal such as changed consumer behaviour and changed business landscape?

On changed consumer behaviour, Muhundhan observed that more customers are getting used to online activities like ordering and purchasing of goods and services during MCO/Covid-19.

He said increased customer demand will drive more SMEs to look for effective (faster, cheaper, better) engagements with customers and vendors.

As for the changed business landscape, those fastest to adopt digital will thrive with better reach and understanding (analytics) of their business and “steal” other SMEs’ customers.

To build a conducive ecosystem for businesses to accelerate their digital adoption journey, while fully embracing the Fourth Industrial Revolution

Muhundhan expects digital services to get cheaper as more digital players from different services come on board and increase competition.

He said mid-term challenges for SMEs will be adapting to the new normal such as access to digital skills/resource (which could possibly be short term too) as well as talent retention and reskilling.

As for talent and digital skills, among MDEC’s assistance is to provide a platform for SMEs to find digital talent including options to work with the gig economy.

The goal is to ensure availability of the right talent and resource to help SMEs in their digital adoption journey.

There will also be continuous engagement with industry associations and stakeholders to identify digital skills required.

While one focus area of MDEC is the sectoral focus that targets those heavily disrupted and need digitalisation such as logistics, F&B and retail, it will also help prepare other sectors, including education and healthcare, in shifting their focus to digital adoption.

Moving forward, Muhundhan said the ultimate aim is to drive a policy to have digital adoption as essential. For example, all businesses should have business continuity plan (BCP) in place with digital capabilities.

Since its 1996 establishment, MDEC has been driving significant digital transformation and adoption across the public and private sectors in Malaysia.

And with the world now into the Fourth IR, Muhundhan said MDEC is leading the country’s digital economy forward by boosting digitally-skilled Malaysians, digitally-powered businesses and digital investments.

For businesses, he said digital adoption benefits are streamlined workforce, reduced costs, automated business processes, improved revenue and increased customer or employee satisfaction.

He noted the Covid-19 situation has heavily impacted traditional SMEs. Coupled with the MCO, many business activities have been halted as there’s no way to operate.

Faced with financial crunch, store closures, reduced number of walk-in customers and even to continue operating post Covid-19, there’s a high probability of bankruptcy and loss of jobs.

Some key concerns of SMEs are reduced sales (cancelled work/projects), cash flow (reduced consumer demand…) and access to current and future customers (disruption in supply chain).

MCO and social distancing policies have created significant changes in customer behaviours, social norms (remote work and education), consumption (ecommerce and online services) and media (TV, OTT and digital), Muhundhan went on.

But he also believes that “Difficulties mastered are opportunities won.”

He shared that digitalisation areas which can help as quick wins for businesses are remote working and communications; digital marketing; ecommerce; e-Pos and digital payment; and HR/payroll.

And these are SME digital quick wins: Support SMEs continue operating during Covid-19, connect SMEs with relevant and easily deployable digital solutions, free and discounted digital solutions, and collaborations with associations to disseminate information quickly.

Meanwhile, there’s this SME Business Digitalisation Grant to help SMEs adopt digitalisation measures for business operations.

There’s also the Go-eCommerce Platform for reskilling and upskilling opportunities, ebusiness support and business compliance needs, he added.

Muhundhan Kamarapullai

Director, Business Digital Adoption, MDEC

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