How SMBs Are Embracing Digitalization For Business Resilience In the face of decreased purchasing intent, reduced productivity and limited in-store traffic, SMBs that pivoted quickly to technology demonstrated higher adaptability and resilience compared to those that did not

By Bidhan Roy

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The COVID-19 pandemic has driven home the reality that digitalization is a big business differentiator for small and medium businesses (SMBs). In the face of decreased purchasing intent, reduced productivity and limited in-store traffic, SMBs that pivoted quickly to technology demonstrated higher adaptability and resilience compared to those that did not.

As a result, SMBs are taking the "digitalize to survive' mantra to heart. According to Cisco's recent 2020 Asia Pacific SMB Digital Maturity Study, 69 percent of SMBs in the Asia-Pacific are accelerating their digitalization rates to address COVID-19 challenges. But being willing to embrace transformation is only the first hurdle; nearly 84 percent of SMBs in the study reported difficulties in executing their digitalization goals. They cited a shortage of digital skills and talent, as well as a lack of necessary technologies, as the top two obstacles in their digital transformation journey. This was followed by a lack of funds and insight into data.

It is crucial that SMBs receive the support they need to digitalize as they are the backbone of the world economy. In 2019, they contributed 52 percent – US$15.2 trillion – to the Asia-Pacific gross domestic product (GDP). Their digital transformation could potentially add 7.4 percent of additional GDP by 2024, contributing to economic recovery. Helping them navigate the evolving digital landscape should be a top priority for all sectors for shared prosperity.

Choosing best-fit technologies

SMBs can be categorized loosely into one of two stages of digital maturity: digital followers and digital leaders. Their digitalization journeys may have different focuses – followers concentrate on securing their IT systems and networks, while leaders explore enterprise applications for enhanced digitalization – but investing in cloud technology, followed by upgrading security and IT infrastructure, ranked as their top three digital transformation priorities over the next 18 months.


Companies that leveraged cloud technology during the pandemic found that cloud services were critical to facilitate remote working with web-based applications, virtual desktops and other cloud-based tools. The ability to access and maintain a centralized repository of assets and information allowed businesses to pivot quickly to working from home without a dramatic loss in productivity, which minimized the impact of remote working on business continuity.

Backing up data on the cloud greatly improves business resilience. Its distributed nature eliminates the vulnerability of maintaining physical on-site servers, and users can sync their devices to the cloud to seamlessly update their files and systems for a smoother working experience. Moreover, cloud services can be easily scaled up and down according to business needs, which makes it a highly cost-effective proposition for SMBs with limited budgets – especially in the current climate.


While digitalization unlocks more opportunities for SMBs, it also exposes them to more cybercrime. Email is the number one threat vector due to its popularity; email-based phishing attacks and malware usually gain illegal access to a company's sensitive data when unsuspecting employees click a link in an email or are convinced into providing personal information to the attacker. The resulting privacy breach or attack can carry enormous legal and financial complications, as well as a loss of customer trust.

With 80 percent of hacking-related breaches tied to compromised credentials, SMBs should prioritize training their staff on proper cybersecurity hygiene such as good password management and Internet usage practices. This can be reinforced by installing credible anti-malware programs and robust firewalls, as well as implementing two-factor authentication on work devices. Enhanced cybersecurity builds trust and opens up more business opportunities, especially with many SMBs in the Asia-Pacific now being part of global supply chains.

IT infrastructure

While almost all SMBs rely more heavily on and recognize the importance of technology as a result of COVID-19, they often find it challenging to build or upgrade their IT infrastructure. It covers a wide range of interchangeable components such as data storage, network solutions and software tools. Plus, there is no universal solution for SMBs, so they need to understand both their business needs and the tools' capabilities in addressing those needs.

Outsourcing IT services to a qualified managed service provider is one way to bridge the digital divide. Professional IT partners can help SMBs tailor digital solutions to their business needs and manage those solutions for them. SMBs benefit by improving their business agility and crisis resiliency, as well as avoiding incurring high capital expenditure as they no longer need in-house hardware and software. Choosing scalable, flexible packages to suit their budgets also allows them to scale these services up and down quickly and more cost-efficiently.

Taking the next steps

Digitalization may be unfamiliar ground for some SMBs, but it need not be laborious or intimidating. SMBs first need to develop a digital technology road map and prioritize the critical business processes to automate. After evaluating and investing in the available technologies that match their scale and needs, they can follow up with building digital talent and skills, employing a suitable technology partner, staying up-to-date with industry trends and scaling their efforts up as the business grows.

Besides saving costs and enhancing operational efficiency for SMBs, digitalization also opens up new markets and increases customer satisfaction via delivering a better experience. It has become the new business standard and SMBs must change their reactionary mindset to stay competitive. Instead of seeing digitalization as a one-off shift, SMBs should view it as a constant state of progress that emphasizes efficiency, resilience and innovation – all necessary traits to survive in the new normal.

Wavy Line
Bidhan Roy

Managing Director, Small Business, Asia Pacific, Japan and China of Cisco

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