From Paper to Cloud: Digital Transformation for F&B Businesses
As the landscape for the food and beverage (F&B) sector continues to shift, SMEs will need to incorporate technology into their operations to stay competitive. Digital tools can help F&B firms promote better cash flow management and enhance efficiency, resulting in sustainable business growth.
DBS BusinessClass, in collaboration with cloud-based accounting software provider Xero, recently held a workshop for SMEs titled "From Paper to Cloud – Digital Transformation for F&B Businesses." The session provided actionable insights into how SMEs can leverage digital transformation to streamline business operations, and partner with DBS and Xero to run their businesses more efficiently.
The highlight of the event was a panel discussion that delved into the digital transformation challenges and opportunities within the F&B industry. According to Andy Sim, Executive Director, DBS Group Research, the Singapore F&B sector’s total receipts are estimated to be at around $10 billion. Although the sector took a hit during the Covid pandemic, decreasing by a quarter, it has bounced back strongly and is projected to achieve near pre-pandemic levels by year-end. However, issues such as escalating costs and labour shortages still pose obstacles for SMEs.
“A few key challenges that all SMEs are facing include rising costs and labour issues. In terms of utilities, companies I spoke to say that although it is small part of costs, given the jump in utilities rates, it has become quite difficult,” said Andy.
Get creative when attracting talent
Nigel Lim, Founder of HR software provider PayBoy, highlighted the importance of talent acquisition and retention for F&B operators. He noted that rising labour costs are impacting profit margins. and emphasised that businesses should ensure that a new employee acquires the relevant skills and understands the firm’s processes within the first 100 days to increase the chances of retention.
“The moment an employee leaves the company, all that knowledge is gone and you have to retrain a new person. And that's why I think being able to digitalise is actually very important for SMEs as it helps them utilise the data and know where they can optimise their manpower needs,” he said.
S Mahenthiran, Director, Food & Beverage Holdings, advised firms to take advantage of new digital solutions to attract talent. For instance, there are systems now that allow part-time workers to bid for jobs by indicating their hourly rates.
“We are seeing very creative ways of attracting workers, especially for jobs that require them to work in shifts. SMEs that cannot to adapt to this way of attracting workers will see the value of their business go down. It's no longer just about advertising in newspapers, ,” he said.
Overcome the fear of new technology
The panellists then spoke about the challenges of switching to a cloud-based solution like Xero, which helps companies automate their streamline operations such as payroll and HR.
Mahenthiran revealed that transitioning to Xero was challenging initially for his finance team, due to their familiarity with the company’s previous software.
However, the benefits soon became apparent. For instance, the manual data entry of invoices has been eliminated, replaced by simply taking a photo of the invoice and uploading it to Xero. The reconciliation process between Xero and DBS is also remarkable, with customer payments received on DBS accounts syncing with Xero within the same day.
“We used to key in about 20,000 invoices per year, but today we key in zero invoices. When goods get delivered with the invoice, all we have to do is snap a picture and this invoice gets uploaded into Xero,” Mahenthiran explained.
For PayBoy, the role of a Xero advisor was instrumental during the firm’s six-month transition from using Excel spreadsheets to Xero. Nigel said that ensuring data accuracy when migrating to Xero was critical, and the advisor played an important role in ensuring this process went smoothly.
Introduce new concepts to stand out
Staying competitive in an era where customer loyalty is dwindling is also a pressing concern for SMEs. Constant innovation is crucial to stay ahead of the game, despite the resources involved.
“As a business owner, you don't want to be the only one running the show and coming up with new concepts. Your employees need to be very sensitive to the data that's coming into your point of sales system and accounting system and understand how to use the data to create new concepts.” Nigel added.
Support from DBS x Xero
Additionally, Pam Chuang, Partnerships Director, Xero Asia, detailed the benefits of the Xero ecosystem for the F&B sector. A range of apps from Xero, accessible via cloud from anywhere with internet, will assist SMEs in automating their processes and increase productivity.
Magdaleine Tan, Vice President of Strategic Partnerships & Business Development at DBS SME Banking, also gave an overview of the various support programs offered by DBS to F&B firms, encompassing digitalisation, skills acquisition, and sustainability.
For instance, the DBS SME Skills Booster Programme aims to help businesses acquire capabilities in areas such as digital and transformation, sustainability and finance; while the bank’s Start Digital Programme is designed to support SMEs’ digitalisation efforts in areas such as accounting, HR and marketing.
Magdaleine said: “We are always looking at new and emerging technologies to help our SME customers. For example, we partner with Xero to tap on the data that SMEs already have with Xero’s accounting software to help them with faster credit assessment and possibly higher credit limits.”
To find out how your business can benefit from DBS’ partnership with Xero, click here.
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