About 43% of businesses in APAC recognise danger of not digitally transforming

Approximately 43% of small and medium businesses (SMBs) said they are digitalising as they recognise the real danger of being left behind if they do not transform. Driven by improved internet access and growing smartphone ownership, a study by Cisco and International Data Corporation (IDC) said the APAC region is digitalising rapidly. By 2021, 60% of APAC's GDP will be digitalised driven by digitally enhanced offerings, operations, and customer relationships across all industries. Currently, 60% of small and medium businesses (SMBs) in Asia Pacific have started to embrace digitalisation, while an alarming 39% do not have digital efforts in place. The rise of the digital economy has created “born in the cloud” companies, those based entirely on a digital business model, the report said. These new companies entering the markets are redefining customer experience and expectations, disrupting sectors and in some cases creating entire new ones, while capturing investment and funding opportunities. With that, another key driver to digitalisation is customer demand. Increased smartphone ownership, coupled with the advent of consumer apps, has created an environment where customers now expect they can get what they want, when they want and where they want it, all at their fingertips. Customers are also demanding the same level of service from SMBs as well. Recognising this, those surveyed said being digital will enable them to become more agile as they bring new products and services to market, and keep them relevant to their customers amid growing competition. As part of the research, firms were assessed on digital maturity in four areas. These include technology adoption and application, digital transformation strategy and organisation, processes and governance as well as talent. Singapore ranks the first in Cisco's digital maturity ranking, ahead of peers in countries such as Japan, Australia, and New Zealand. About 52.9% of SMBs in Singapore are aware of government support towards digitalisation but have not taken part in initiatives. Meanwhile Malaysia came in tenth, with 20% citing lack of talent and 14% saying lack of robust IT platforms as challenges. However, Malaysia did not fare much lower in awareness of government support, with 46% aware but not taken part in initiatives. Compared to the APAC average of 37%, Malaysian SMBs are on track to digital transformation. On the other hand Indonesia falls close behind Malaysia, taking the 13th spot. According to the study, 27% of SMBs in Indonesia are aware but have not taken part in initiatives. However, more than half (66%) are aware of government support and said to have benefited from them. The report also highlighted that in the digital transformation dimension, Malaysia, Thailand, Philippines, Indonesia and Vietnam fall under "Digital Indifferent". Meanwhile the rest of the markets involved in the survey (Singapore, China, Hong Kong, India, Australia, Japan, New Zealand, South Korea and Taiwan) are at the second stage of digital maturity - digital observer. According to the study, one of the advantages of technology is that it helps small businesses scale quickly without requiring huge upfront investment in IT infrastructure. As SMBs become more digital, and as its applications and data are stored in the cloud, keeping them secure has become increasingly important. SMBs recognise this as cybersecurity is among the top technologies they are investing in, and as SMBs are often part of supply chains of large global companies, who are increasingly demanding their partners and suppliers have the right cybersecurity protocols in place. The study said that for a successful digital transformation, companies need the right IT infrastructure in place – both hardware and software. As such, SMBs are investing in upgrading their IT infrastructure to meet their evolving needs, including hardware updates such as networking, storage and servers. The research surveyed on 1,340 SMBs across the 14 economies in Asia Pacific such as Singapore, Malaysia, Indonesia, Thailand, Vietnam, China, Hong Kong, India, Australia, Japan, New Zealand, Philippines, South Korea and Taiwan.