What trends will emerge for SMEs this 2022?

Digitalisation remains king for businesses to grow this year.

After almost two years under lockdown, small and medium enterprises (SME) are now seen to leverage on digitalisation for growth in 2022, following the accelerated shift to online to keep their businesses afloat at the start of the health crisis.

Kevin Fitzgerald, managing director of online accounting software Xero Asia, said that amongst the trends that may arise for the SME sector is the “shift to growth mode with a focus on digitalisation.”

Some businesses will rely on digital tools to expand their customer base and engage with them amidst the evolving regulatory environment, whilst some will look into technology to enhance innovation and development of new products and services.

Many small businesses are also seen to focus on technology to improve their operational processes, he said.

SMEs will now also use data to “solve customer pain points.”

“This will most certainly change, with affordable and scalable cloud tools empowering businesses to double down on their data strategies in 2022,” he said.

Having available performance data will help businesses adjust their sales and attendance campaigns to meet their targets amidst changing “circuit breaker” measures, Fitzgerald said, adding that having data on cash flow and financial health allows SMEs to manage their budget and investments wisely.

He cited a study by the Singapore Institute of Technology, RSM Singapore and the Institute of Singapore Chartered Accountants in October 2020 which found that 69% of SMEs in 2020 have yet to adopt data analytics.

Fitzgerald also stated that increased spending on technology will help SMEs to stay afloat.

“Technology budgets will increase as more small businesses embark on digital transformation projects to accelerate their post-crisis recovery,” he said.

He also cited data from IDC which said that at least 20% of business worldwide will close by 2025 if they do not speed up digitisation.