SMEs need to be more aggressive in their digitalisation journey while adhering to all the necessary regulations which could help them grow the business.
During the SME CEO Forum 2024 – organised by Small and Medium Enterprise Association (SAMENTA) on 24 October 2024 – SME Corp chief executive officer Rizal Nainy said that in a survey conducted by SME Corp, it was found that only 60-70% of Malaysian SMEs adopted digitalisation for their backend operations.
These operations include point-of-sale (POS) systems, customer relationship management (CRM) systems, accounting and human resource (HR) systems, which are all crucial for SME to improve and grow their businesses.
On that note, Ministry of Investment, Trade and Industry (MITI) deputy secretary general (industry), Datuk Hanafi Sakri advised companies to go through a readiness assessment as part of their Industry4WRD journey and engage with solutions providers to further improve their automation efforts.
“After that, businesses can move towards establishing interconnectivity throughout all the equipment in their operations or facilities,” Hanafi said.
Adding to this, Malaysia Productivity Corporation (MPC) deputy director general, Dr Norjayadi Tamam noted that some of the most notable trends among SMEs in recent times include the utilisation of technologies related to artificial intelligence (AI), Internet of Things (IoT) and big data analytics.
“While these trends are prevalent recently, SMEs would need to have the capability to assess and analyse the data gathered to further improve their business processes, especially when it comes to their industrial transformation journey,” Norjayadi opined.
However, Rizal believes that simply utilising AI technology is not sufficient, as companies would also need to place a special focus on environmental, social and governance (ESG) practices.
“With ESG, SMEs can be part of the global value chain by exporting their products and services to more developed countries in the world,” Rizal added.
Elevating Products of SME businesses
According to Rizal, almost 70% of SMEs in Malaysia are micro, 28.5% are small and 1.8% are medium-sized. In order to transform the micro and small enterprises to a higher level, there needs to be a system that will enable the businesses to gain access to proper assistance, especially within the manufacturing sector.
“Assistance from the government and other private sectors usually comes ‘slowly but surely’, but we believe that with the (assistances from) Budget 2025, there will be a lot of options being made available for SMEs expand their businesses abroad,” Rizal said.
On this, Machang Member of Parliament (MP) Wan Ahmad Fayshal said that there should be a blueprint that governs the SMEs’ development trajectory in order to ensure that the companies will efficiently utilise government assistance and achieve business sustainability.
“If they are not following the blueprint (accordingly) within a certain length of time, that shows that the business is not sustainable and should be dropped from the list of government assistance. That’s just how the free market works.
“Those that survive are the fittest and most functioning SMEs (to contribute) to the country. Those that unfortunately did not survive must go back to the drawing board and reevaluate their business plans moving forward,” he said after concluding the panel session titled ‘No Holds Barred – Policymakers vs SMEs‘.
Meanwhile, fellow panelists Williams Business Consultancy Sdn Bhd economist, founder and director, Prof Dr Geoffrey Williams and Kluang MP along with TalentCorp chairman, Wong Shu Qi advised business owners to carefully assess their cashflow before deciding on which government assistance would be most suitable for the company, be it in the form of matching grants or loan assistance.
“I believe that businesses – whether they are small, medium or big – must acknowledge that the government assistance is not forever. It is meant to be temporary or for a short period of time. No one should take advantage of the matching grants and loans forever.
“So, within that period, businesses should utilise those funds in the best possible way by exploring the market and stretch the revenue to the maximum extent.
“You also need to have a plan ready to work out how the company can continue to survive and ‘berdikari’ without any help from the government. Otherwise, the business will never last. From the government’s side, we do hope more Malaysian SMEs will be able to explore international markets,” Wong commented.
Additionally, when asked about government policies involving SMEs, Geoffrey advised the current government to come up with more innovative policies to better cater to the needs of the SMEs.
“I think the policies of the current government are still far too reliant on the legacy policies of the previous government. The policies that we see now are basically just the same policies that we have seen before.
“I believe the Unity Government needs to take the opportunity to innovate. Ask SMEs what exactly do they need, what they want, how much of it do they want, when do they want it and how they can get access to it. That’s the type of (innovative policies) that we need to see.
“However, that would require a structural reform of the approach to SMEs, which is much more engaged with what SMEs are trying to achieve and how they want to achieve it,” he ended.
