15 October 2020 – A study jointly undertaken by Singapore Institute of Technology (SIT), RSM Singapore and the Institute of Singapore Chartered Accountants (ISCA) found that 69% of small and medium-sized enterprises (SMEs) have yet to adopt data analytics, despite various support schemes from the Singapore government to help SMEs transform their business model into a digital one.
A total of 575 SMEs, from businesses spanning commercial & professional services, engineering services, and food & beverage services, took part in the survey conducted between November 2018 and April 2020.
Data Analytics Adoption by SMEs
The study sought to understand the adoption of data analytics among Singapore SMEs by examining their readiness and technological capability of adopting data analytics, the extent of analytics tasks embraced, the perceived “usefulness” of data analytics, and their reasons for adopting or rejecting data analytics.
To remain relevant, businesses have been encouraged to embrace digitalisation and transform their business models to utilise technological advancements. Among these innovations are data and analytics, which have become the heart of technological advancement applications. Digitalisation transforms the scale, quality and processing of data. The Singapore government has also put in place various supportive measures, such as the SMEs Go Digital programme, to help SMEs access global markets to transform themselves digitally.
SMEs are a vital part of the economy, contributing to about half of Singapore’s GDP and two-thirds of employment. With digitalisation, it is critical for businesses to implement data analytics to place themselves in a stronger position in the market,” said Associate Professor Koh Sze Kee, Deputy Cluster Director (Applied Research), Design and Specialised Businesses, SIT. “This transformation will produce vast quantities of data that businesses can use to conduct decision-making analyses. Companies need to understand data generated and know ways to utilise advanced technologies in order to convert data into powerful business strategies.”
Key Results of Survey
The survey, conducted through questionnaire, revealed that 34.6% of the SMEs have not adopted any data analytics in their organisations and have no intention to do so in the future. These SMEs were sceptical that data analytics would generate real monetary savings for their organisations. They also reported the lack of IT infrastructure support, limited financial resources, and concern over data protection and privacy, as top potential deterrents for their organisations to adopt data analytics. Many of them were familiar with only spreadsheet and database as tools of data analytics, suggesting a lack of understanding and awareness of more advanced data analytics tools.
35.1% of the SMEs surveyed have not adopted any data analytics in their organisations, but are likely to embrace it in the future. Performance expectations, effort expectancies, management support and government support were the factors that would increase their intention to implement data analytics.
30.3% of respondents have already embraced data analytics in their businesses, using varied tools from basic software such as MS Excel, to more sophisticated software such as SAS and Tableau. These SMEs saw business value in adopting data analytics to reduce their operating costs, enhance staff productivity, and to provide better customer service.
In terms of data analytics capability, 72.0% of the SMEs surveyed did not have designated full-time staff to perform data analysis. More than 50% of the respondents reported to have outsourced this function to meet their organisations’ IT needs. Close to half (45%) of the respondents did not have the intention to send staff for data analytics training, due to cost and time required for such training.
“To realise business value brought about by data analytics, having a supporting platform to help SMEs design a data framework to ensure seamless analyses flow is necessary,” said Associate Professor Koh. “To encourage more SMEs to implement data analytics, more needs to be done, such as sharing real-life examples on how data analytics can result in business success,” he added.
The full report for Data Analytics Adoption in Singapore SMEs can be found here.
SIT Research Team
Associate Professor Koh Sze Kee, Deputy Cluster Director (Applied Research), Design and Specialised Businesses (Primary Investigator)
Assistant Professor Arif Perdana, Design and Specialised Businesses
Assistant Professor Desi Arisandi, Design and Specialised Businesses
Assistant Professor Lee Hwee Hoon, Centre for Communication Skills
The research team from SIT for the Data Analytics Adoption in Singapore SMEs study: A/Prof Koh Sze Kee, Asst Prof Desi Arisandi, Asst Prof Lee Hwee Hoon, Asst Prof Arif Perdana.
