Singapore Business Federation’s (SBF) National Business Survey (NBS) 2024 found that 94% of Singapore businesses recognise the importance of digitalisation.
Businesses have increasingly recognised the importance of digital transformation, focusing their efforts on deploying digital solutions to improve operational efficiencies (77%), upgrading their IT systems (71%), ahead of improving their products and services (65%) or customer service (65%).
The survey was released on Sept 26 and surveyed 529 business across all key industries including wholesale trading, IT and professional services, manufacturing and bank and insurance, among others. Among the companies surveyed, 82% were small and medium-sized enterprises (SMEs) and 18% were large companies.
According to the survey, businesses that have embarked on their digital transformation journey said that they have seen an improvement in business performance in terms of optimising operations (67%), reducing operation costs (58%) and enhancing employee collaboration and remote work channels (49%).
The survey reported that a growing number of companies are citing high costs, 73% in 2024 as opposed to 64% in 2023, and expensive licensing payments, 47% as opposed to 31% in 2023, as key challenges. Additionally, 47% of businesses surveyed cited upskilling of staff as an obstacle to technology adoption, an increase from 29% last year.
While SMEs faced greater challenges with licensing payments (47%) than upskilling of staff (44%), the converse was true for large companies. More than half of the large companies surveyed (57%) cited upskilling as a bigger challenge than licensing payments (45%).
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Further to the survey, it was reported that 94% of large business expressed confidence in their cybersecurity measures compared to 75% of SMEs. Key challenges to implementing cybersecurity measures included the high cost of implementation and maintenance (56%), risks from third-party service providers and suppliers (50%) and employees’ lack of awareness on cybersecurity (39%).
The survey found that businesses devote about 11% of their annual budget to digitalisation. Cloud (69%), e-payment (62%) and cybersecurity (60%) have been identified as the top three pervasive technologies currently adopted by companies.
To address the digitalisation challenges, businesses prefer having financial support for digital advisory and project implementation services tailored to their company’s specific needs (69%), a central reference for up-to-date information (57%) and both online and offline platforms to learn about to learn about new technology and best practices (52%). The businesses surveyed identified the productivity solutions grant (67%), enterprise development grant (64%) and start digital (54%) as the three most beneficial governmental initiatives.
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Looking ahead, businesses have ranked emerging technologies including artificial intelligence (AI) (70%), cybersecurity (68%) and automation (51%) as the top trends that will likely impact their businesses in the next 12 months. Additionally, 60% of large companies were also conscious of reducing their carbon footprint using sustainability technology.
With regards to AI, the top three areas where businesses have implemented AI are in operational process automation (45%), cybersecurity defence (45%) and analysis of customer data or transaction data (44%).
The top challenges to AI adoption were high costs (66%) and lack of knowledge and expertise (61%). Large companies also cited data privacy and security as a challenge (61%).
