Entrepreneur Vanessa Ong founded Gernise Global in 2014, a B2B company specialising in distributing polycarbonate and plastic raw material. In 2016, she also founded MamaShop, a B2C e-commerce platform specialising in environmentally-friendly products including lifestyle products and eco-friendly straws.

During the pandemic, like many other businesses, her ventures were pushed towards digitalisation out of necessity. Though the process was challenging, they received help through a partnership with The FinLab, an innovation accelerator powered by United Overseas Bank. The results have shown how digitalisation not only allows for survival, but opens up new avenues for long term growth and performance.

SMEhorizon spoke with Vanessa Ong, Managing Director and Founder of Gernise Global and Mamashop, and Pauline Sim, Head, The FinLab, on Gernise Global and Mamashop’s digital journey, the current momentum for digitalisation, and how SMEs can best leverage digital transformation for long term success.

A momentum for digitalisation

Sim shared how The FinLab, which has supported Fintechs, SMEs and start-ups across Malaysia, Singapore and Thailand on their digitalisation journey for five years, is now seeing more businesses prioritise and accelerate their digitalisation efforts, sometimes out of necessity rather than choice, as a result of COVID-19 restrictions.

“We have also seen more consumers going online more frequently to buy goods and services. We believe that this shift in consumer behaviour to digital services is permanent, and businesses must follow suit to continue to grow their customer base and revenue streams.

“Not surprisingly, a recent UOB survey of ASEAN SMEs found that SMEs in the region now see digitalisation as their top priority (60 per cent) following the pandemic, an area that was ranked fourth (49 per cent) prior to the outbreak.”

Echoing her statements, Ong shared how the current pandemic was a decisive factor in recognising the importance of digitalisation. “During the circuit breaker, we had to re-evaluate our customer acquisition strategy because our retail partners could not operate and corporate orders were put on hold. We needed to strengthen our digital capabilities for both Gernise Global and Mamashop.

Crafting a digitalisation strategy

Despite the various forms of assistance now available to companies seeking to digitalise, it can still appear as an uphill task. Ong shared that “ “in the early stages, it was daunting because there were so many options to look at and we were unsure of where to begin.”

Sim point out that for digitalisation to be a success, it is essential to get the fundamentals right. “SMEs must balance their business needs with a long-term digital transformation strategy to build a sustainable business. 

“We have found that as businesses implement digital solutions to solve pain points, they may fall into the trap of easing symptoms rather than taking the opportunity to transform their businesses holistically for the future.

“For example, a McKinsey report found that success rates for the growing number of organisations that have begun their digital transformation journey remain alarmingly low. Only 14 per cent of companies have seen sustained improvements in their performance, while an even lower three per cent of companies reported success at sustaining change.

As such, she concludes, “companies must not approach digitalisation as an expense to solve a short-term pain, but an investment to secure their business’ success longer-term.”

To this end, The FinLab guides startups through a holistic evaluation of their businesses’ key challenges and needs. “This is important as it provides companies with clarity on the root causes of their business challenges and how their digital transformation strategy can address these issues and enable them to grow in the long term,” said Sim.

Taking the initial steps

According to Sim, once the clear strategy and roadmap is in place, it is also easier to determine the right technology and digital solutions which they can adopt to fulfil their goal. “We have found that without this first step, many SMEs are often lost as to which technology to adopt amid the many digital solutions that are available in the market,” she shared. As such, the FinLab’s efforts include matching SMEs with relevant technology solutions and guiding them as they implement these solutions.

Initially, Ong regarded digitalisation was only effective in digital marketing and e-commerce, areas where she works with external parties due to lack of manpower. In her partnership with the FinLab, she came to have a better appreciation of the long term potential in digitalisation, beyond weathering the immediate challenges of the pandemic.

“To begin, we reviewed our business operations internally to see where we needed to optimise,” she shared. “ In this case, we began with something as fundamental as our HR functions, which had been limiting my team’s productivity.

“In my experience, it’s important to start small through pilots that experiment and test innovative technologies and find the ones that work best for the businesses.”

A worthwhile investment

Like many SMEs, manpower was an issue. “As a small team of five, time and resource management is very crucial for us. While we outsource many of our functions such as marketing and accounting, we spend quite a bit of time on administrative issues like monthly payrolls and consolidation of invoices,” said Ong.

While the effort to digitalise may seem like an additional task, the long term effects make it worth the investment. Working with The Finlab “helped us understand and identify how digitalising these areas can improve our operations in the long term,” said Ong.

“By automating these time-consuming internal processes, our productivity greatly improved, leaving us with more time to prioritise tasks that are valuable and profitable to the business.”

Long term, sustainable growth

Encouraged by the results, Ong hopes to move beyond addressing immediate pain points. “We also recognise the importance of developing a digitalisation strategy for the long term and a sustainable business model,” she shared.

“By using digitalisation to transform our businesses holistically, we can strengthen our resilience. Therefore, the next steps for us will be to enhance our digital marketing and social media efforts.”

Other plans that Ong has include leveraging on schemes provided by Enterprise Singapore for Mamashop. “In the next five years, we hope to expand Mamashop worldwide by ramping up our local design and production capabilities, and this includes opening a factory to create more job opportunities for locals.”

Digitalisation capabilities go beyond merely weathering the current pandemic and economic downturn. “Digitalisation enables companies to stay nimble and to seize opportunities as they arise. In going digital, they are also able to tap global markets instead of just their local market. This sharpens their competitive edge for sustainable future growth,” concluded Sim.

Source: SME Horizon