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Experts say more should be done to make ICT solutions sustainable for SMEs

Initiatives announced in last week's Budget will put more force behind efforts to help SMEs adopt infocomm technology (ICT) solutions. Experts said that more must be done to make such solutions sustainable for these smaller businesses.

SINGAPORE: Initiatives announced in last week's Budget will put more force behind efforts to help SMEs adopt infocomm technology (ICT) solutions.

Experts said that while it is inevitable that SMEs will use technology to raise productivity, more must be done to make such solutions sustainable for these smaller businesses.

Businessman Howard Lo is no stranger to leveraging technology.

Mr Lo said he is open to technological solutions that will make his business more efficient and high-speed connectivity will allow him to do so.

At one of his eateries, Shinkansen, diners can customise their order.

With iPads, it takes staff only seconds to process and send orders to the kitchen.

He said: "So much of work is dependent on internet now. More and more, that bandwidth is very important to have."

Mr Lo could benefit from the government's subsidy of the cost of a fibre subscription plan of at least 100 megabits per second, which aims to help SMEs take advantage of newer technologies like cloud computing and data analytics solutions.

This will be capped at S$120 per month for up to 24 months, or S$2,880 per SME.

Mr Lo said he plans to take up a fibre subscription plan as soon as Ocean Financial Centre - where Shinkansen is located - is infrastructurally ready to support the high-speed network.

The government will also support the implementation of Wireless@SG at their business premises.

But not all are convinced that more wireless hotspots will suit their business models.

Mr Lo said: "At Raffles Place, you have about an hour and a half during lunchtime to do all your business. If you offer wireless internet here, then someone might take a long time to eat their lunch, it means you've lost out on sales during that period, because that one person has just been sitting there checking Facebook."

Enabling high-speed connectivity for these SMEs, however, is just one part of a S$500-million programme called the ICT for Productivity and Growth programme (IPG) to get SMEs up to speed with information and communications technology.

It is likely to benefit other SMEs in the retail, F&B, and hospitality industries.

To ensure more buildings have the facilities to bring fibre broadband to their business tenants, the government will subsidise 80 percent of the one-time infrastructure enhancement costs of up to S$200,000 per qualifying building.

There are also two other initiatives under the IPG.

The first is a 70 percent subsidy of the costs of adopting proven ICT products and services.

To help SMEs better manage their cash flow, they will only need to pay the remaining 30 percent of the costs of ICT products and services.

The rest of the cost will be paid directly to the pre-qualified vendors by IDA.

The second initiative seeks to encourage SMEs to pilot innovative technology solutions that are new to Singapore.

80 percent of the qualifying costs for firms, capped at S$1 million per participating firm, will be funded by the government over the next three years.

Experts said that while the initiatives are a push in the right direction for SMEs, the subsidies to put in place technological solutions are just the first step.

What could discourage SMEs however, are the follow-up costs.

Lennon Lee, partner of entrepreneurial and private clients at PwC Singapore, said: "Obviously the subscriptions are taken care of, the one-time equipment purchase is taken care of. But the maintenance will need someone with IT experience.

“And as with technology, it will keep changing all the time, and you will need to continue to upgrade, and that itself is an unknown factor for a lot of SMEs if they want to embark on a wireless platform."

Mr Lee added that while technology will drum up more business in the long term, SMEs must be prepared for the short downtime that comes with re-training workers.

"Given tight labour conditions, taking one or two workers away for training would also mean that business itself will suffer, at least in the initial phase," he said. 

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