Mr Lo: SMEs have to view infocomm as a strategic tool to step up and differentiate their business.

Then and now
In the earlier days of SMEs infocomm adoption efforts (1997 to mid-2000), the issues and initiatives were different. Back then, there were fewer off-the-shelf solutions. Before the SMEs decided on a customised solution, they would engage a consultant to do feasibility studies. This is why the government had the Local Enterprise Computerisation Programme (LECP) under the Local Enterprise Technical Assistance Scheme (LETAS),
to help SMEs defray part of the cost
of consultancy.

However, if you look at infocomm offerings today, there are many more solutions that are available off-the-shelf. Infocomm is becoming more commoditised, and a one-stop service makes sense in helping SMEs make use of packaged solutions. That's where initiatives like the SME Infocomm Package (SIP) and the SME Resource Centre (SIRC) at the Singapore Polytechnic come into the picture.

The SIP provides a one-stop service for SMEs to find entry-level packages
and items such as laptop, printer, broadband connectivity, web development, and accounting software at affordable prices. It also offers sector-specific applications such as Point-of-Sales systems for the retail sector and Reservation systems for the food and beverage sector. All these come with a one-stop helpdesk. SMEs which do not have a web site and intend to engage a web development service can enjoy an incentive capped at $1,000
per company.

The SIRC showcases technology and helps SMEs to install or configure commonly used software such as operating systems, anti-virus and IP telephony applications. The centre also helps SMEs pilot innovative solutions before embarking on full-scale implementation.

Another difference between now and the late 1990s is that back then, companies were setting up their e-commerce web sites and using infocomm as an end in itself. Today, the focus is on using infocomm to achieve business goals. We are looking at driving business transformation and innovation, because SMEs have to compete and find ways to provide value added services. In line with this, we are working with SPRING Singapore on the Technology Innovation Programme (TIP) to help SMEs grow their businesses through innovative use of infocomm technologies. TIP supports SMEs in infocomm innovation projects and helps defray up to 50 per cent of the qualifying cost.

Sectoral focus
When TIP first started, we were looking mainly at the enterprise level but going forward, we would like to seed more industry-wide initiatives. SMEs
need to be able to leverage the economies of scale, and to learn best practices from each other. For example, in the retail sector, a Point Of Sales (POS) and Inventory Control system can play a strategic role in inventory control while reducing stock levels in the fast moving consumer goods business. In construction, infocomm systems can help in materials planning and help them to optimise resources. We are really looking at systems to support best practices.

Overcoming the resistance
Despite all these infocomm adoption efforts, some SMEs are still reluctant and we found there are a variety of reasons. One is that they think technologies are complicated. We need to address this through education and through one-stop solutions that will help reduce complexity and ease that concern. Another reason is cost. That is why we have programmes such as SIP, SIRC and TIP to get them started.

But a very fundamental factor is whether they perceive any threat to their survival. A lot of people do not want to change, but they will if they have
no choice such as when their livelihood is threatened or when they are
very hungry.

The strategy
Change can be brought about in a few ways. Tying infocomm incentives to policies or to certain business requirements for a sector are a start. In construction, a lot of work dependency is needed if a project is to be completed on time. The developer needs to have a good overview of the project, which means having a system that can support information flow from the contractors, subcontractors and other parties involved.

One way to get SMEs in this sector to adopt technology will be to work with developers to include an infocomm component in their bid specifications. Of course, there will be different mechanisms for different sectors. There is no one-size-fits-all solution.

What we need to do is to increase the multiplier effect of these initiatives and effect a sectoral transformation. We will have to work with different government agencies and industries such as the Building and Construction Authority for the construction industry, or with SPRING Singapore for the retail sector. Each of them will have different levers to pull, and there will be synergies in working together.

The SME differentiator
Ultimately, for SMEs it is a matter of "Big eat Small" and "Fast beat Slow". Large enterprises have the luxury of deep pockets and the ability to invest. For SMEs, the differentiator is the ability to move fast which can be used to capture certain segments of the market.

We have two main messages for SMEs. Firstly, they need to move fast because that is really their competitive advantage. Secondly, SMEs have to view infocomm as a strategic tool to step up and differentiate their business. They have to see how they can reach out to new markets through the web or analyse their customers and personalise their offerings through a Customer Relationship Management (CRM) solution. They must also be able to see the value of these initiatives, leverage them, and move fast. What we can do is to show them what other companies have done; to show them what is possible.