5- star Advice From Parminder Singh
Star Advisor Parminder Singh, Chief Commercial and Digital Officer at Mediacorp shares his thoughts on how SMEs can deal with technological disruption.
Few businesses today have been left untouched by the digital revolution sweeping across a wide range of industries. While many SMEs are aware of the need to prepare for such disruption, few know how to go about doing it.
As the Chief Commercial and Digital Officer at Mediacorp, Parminder Singh has been at the forefront of adapting to a shifting landscape brought about by digital disruption. He shares his insights on how SMEs can thrive in the fast-expanding digital economy.
In what ways are SMEs being disrupted by technology?
I think the effects of technological disruption on businesses are best encapsulated in Peter Diamandis’ concept of the six Ds of exponential technologies: digitised; deceptive; disruptive; dematerialised; demonetised; democratised. In particular I would like to highlight the latter three, which are more pertinent to SMEs.
Firstly, technological advancement can lead to dematerialisation. This occurs when there is a significant reduction in the use of material, physical hardware in goods or products. For example, the rapid development of smart phones has led to it replacing and even removing the need for many other standalone devices such as cameras, paper diaries and alarm clocks. So an SME dealing exclusively in the sale of camera equipment would face the risk of seeing a decline in demand for its products.
Secondly, demonetisation. With technology, many resources have become a lot cheaper, even to the point of being free. For example, things like maps, calendars and diaries used to be things you needed to buy. But with the numerous apps that one can download to access these very same functions – the majority of which are available for free – vendors of these physical items will inevitably be affected.
Lastly, democratisation. Let’s take music as an example. In the past, most people had to buy vinyl records, cassette tapes and CDs in order to enjoy music on-demand. Today, music has become such a democratised commodity that virtually any song is readily available in digitised formats, which means more people can easily access their favourite songs via streaming or online platforms – and almost always for free. Little wonder that CD shops are now firmly a thing of the past.
Can you explain how businesses can use the ACE model to prepare for disruption?
Businesses can mitigate the effects of disruption by understanding algorithms, communities and engagement – also known as ACE – and their possible effects on one’s business.
Algorithms: Otherwise known as Artificial Intelligence, algorithms have an impact on most businesses either tangentially or directly in this digital age. For instance, algorithms determine how ads are programmed to target specific audiences based on user behavioural data collected through digital touchpoints. It is therefore important to understand how algorithms are playing out in your space and how they can potentially impact your business model.
Communities: Never underestimate the power of communities. When organised and mobilised properly, the people around us can be great resources to tap on, even if they are not employed by your company. I believe that non-ownership is the key to owning the future. So leverage the time and talents of communities to co-create new possibilities and solutions that can help improve your business.
Engagement: Technology is constantly opening new avenues and enabling new engagement models with your audiences. Whether it is through assembling a network of social media influencers or enhancing the interactivity of your website, be sure to always stay on top of the fastest, most effective and optimum ways to reach out to your clients.
Why do you think some SMEs are still hesitant to embrace digital technology?
Very often, SMEs are reluctant to embark on digitalisation because of a lack of appreciation of technology’s potential impact on their businesses (in both positive and negative ways). By the time they realise that their businesses are being disrupted, it is usually too late.
Cost is another major factor. Going the digital route requires varying degrees of investment in the right technologies. For SMEs that have cash flow issues or operate on thin profit margins, keeping the business afloat is an ever-pressing concern. Expenditure on day-to-day working capital takes priority over investing in technology, which typically requires a sizeable cash outlay and a period of time to yield results and generate returns.
What are the risks for SMEs if they fail to embark on digital transformation?
They risk being left behind in the digital economy and potentially missing out on opportunities for growth, especially in industries which are fiercely competitive. Over time, their business models may become outdated and they stand to lose customers, particularly the digital natives who are more at home with transacting using digital mediums.
Conversely what are the benefits of doing so, and how can SMEs better engage their audiences and grow their businesses?
Embracing digitalisation is a vital step to future-proofing one’s business, regardless of whether it is an SME or a large organisation.
And when it comes to customer engagement, one particular aspect which I strongly advocate is to adopt an omni-channel approach; in other words, to have in place multiple communication touchpoints and interfaces with your customers. This is a key pillar of our distribution model here at Mediacorp, where our content is designed around the lives of our consumers. By going omni-channel, we ensure that our content “follows” our audiences and is easily accessible to them on a variety of platforms – such as TV, radio, and digital – anytime, and anywhere.
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