Tech awareness of family businesses may boost power of SMEs

Business executives join the huddle during the launch of the SAP Leonardo Centre in Singapore. Contributed photo

With the growing awareness of Southeast Asian family businesses on the rapid technological and market change in various industries, SAP—a market leader in enterprise application software—foresees the potential of small and medium enterprises (SMEs) to disrupt industries and drive economic growth across the region now more than ever.

According to a new study by the Economist Intelligence Unit (EIU), sponsored by SAP, Southeast Asian family businesses ranked the pace of change of technology to be the topmost area of concern that may present the most significant threat to their organization’s growth over the next three years.

The study, which specifically assessed the landscape of small and medium sized family-owned businesses, highlighted that with the significance of family connections and customer loyalty diminishing, executives should acknowledge the pressing need to change their ways of doing business, digitize and modernize.

“Executives in South-east Asia show less confidence in their abilities to meet future challenges than their peers in South Asia,” said Michael Gold, EIU editor in charge of the research.

“In order for family businesses in this fast-changing region to keep up, they will need to adapt to new technological developments and modernize their way of thinking to bring their businesses into the 21st century. Otherwise, the next generation may not throw in their chips with their parents’ companies,” he added.

But the study also showed that despite feeling the pressure from the emergence of new technologies, respondents are strongly confident of their organization’s readiness to utilize new technologies such as data analytics (67%), machine learning (62.3%), automation (65.7%) and cloud computing (63.7%).

“The landscape and dynamics of family businesses in Southeast Asia is unique, with many of them still being in the first or second generation. Given their small or medium sizes, these businesses have the competitive advantage of being agile and nimble, which put them in a better position to adapt to the rapid pace of change in the market,” said Claus Andresen, President and Managing Director of SAP Southeast Asia, while speaking at the launch of the SAP Leonardo Centre in Singapore on Tuesday.

READ: SAP Leonardo Center Singapore: Expanding purpose-driven innovation in APJ

Andresen stressed that with SMEs being 95 to 99 percent of establishments across ASEAN and its massive contribution to the GDP, may put them in the prime position to drive disruptions across industries and economic growth across the region.

“But to do this, these organizations should first and foremost embrace digital innovations and integrate digital technologies into their overall strategy,” he pointed out.

Flexible partner-packaged solutions to give SME customers better value

To support SME customer needs for flexibility in their solution purchases and deployment, SAP announced an extended access for partners to the SAP® software portfolio to provide small and midsize enterprises (SMEs) with fixed-scope packaged solutions at predictable prices.

SAP-qualified partner-packaged solutions will be built and delivered by SAP partners and are structured to provide customers with a fast return on investment at high-quality standards.

The SAP-qualified partner-packaged solutions represent a packaging strategy with three important pillars:

• Packages based on SAP software together with a partner’s services and intellectual property – creating a unique and highly targeted value proposition based on a fixed scope and a fixed price offering ;
• A rigorous qualification process, securing full alignment on the value proposition and validation of the partners’ ability to deliver;
• Exposure on SAP.com to give customers direct access to partner-packaged solutions and joint go- to-market activities with partners active in the SME segment.

SAP said SME customers who are interested in these offerings can contact the SAP channel partners directly to explore co-innovations with SAP Leonardo.

At an interview with Southeast Asian delegates during the SAP Leonardo Center launch, Andresen has stressed that the company’s confidence in its capability to disrupt industries would lie on its customers’ confidence on the technology’s capability, accessibility, affordability and scalability.

“Needless to say, it’s not about my confidence level, it’s about our customers’ confidence that they wanted to make us part of their technological improvement, that technology is there and they have readiness to take the next step,” he said.

“My confidence level is that we have technologies to back them. The technology is there, it’s accessible, scalable and affordable,” he continued.

But what sets SAP apart from just acknowledging the need to adapt to new technologies faster than ever, is its serious focus on “doing good business” and “purpose-led innovation,” Scott Russell, president of SAP Asia-Pacific and Japan (APJ) said.

Russell also stressed how most start-up businesses fail because they forget to innovate with purpose.

“Doing good is good business,” he added.

SAP, he said, is also primarily interested in identifying a company’s problem and helping it solve either through SAP’s existing technologies or through co-innovation.

With issues hounding the industry of technology especially with the recent scandal involving Facebook and Cambridge Analytica, Russell assured that SAP data security has always been among their topmost priorities for their customers.

He likewise underscored that with 80 percent of their customers composed of SMEs, SAP has assured that their services and products would be worth the investment. /jpv