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This article is the second in our three-part blog series on how Filipino MSMEs can harness technology for growth and resilience.
In the Philippines, Micro, Small, and Medium-sized Enterprises (MSMEs) make up 99.59% of all business establishments1 and are crucial to the nation’s GDP. Despite their significance, MSMEs face considerable hurdles that hinder their growth. They are particularly vulnerable during natural disasters and man-made hazards.
Moreover, MSMEs face several challenges, such as inefficient tracking of customer sales cycles, poor inventory management, and inadequate insights into market trends, limiting their ability to thrive effectively.
According to the Department of Trade and Industry (DTI),2 only 6% of MSMEs use business email, website, and data analytics, while 23% have yet to adopt any digital tools. There is significant potential for MSMEs to enhance operations through digital technology.
In Part One of this blog series, we explored the different technologies changing the business landscape and how Intelligent Organization Solutions can help businesses stay competitive.
In this second part on intelligent organization solutions, we will explore how MSMEs can level up their technology adoption and embrace the digital-first approach.
The Next Tech Adoptions for MSMEs
As the world becomes increasingly digital, MSMEs must adapt to the evolving business landscape. These technologies can help them stay competitive and ahead of the trends.
1. Cloud Computing
Cloud computing adoption is on the rise among businesses in the Philippines, as 85% of local enterprises3 plan to complete migration within two years.
Meanwhile, DTI has partnered with Amazon Web Services (AWS)4 to leverage its cloud capabilities to accelerate MSMEs adoption of Artificial Intelligence (AI) and Machine Learning (ML), Internet of Things (IoT), and other Industry 4.0 technologies.
MSMEs can experience significant savings via the “pay-as-you-go” model, increased scalability, reduced maintenance, and better security by migrating to the cloud.
2. Artificial Intelligence (AI) Integration
AI is now essential for businesses to automate tasks and make data-driven decisions. This leads to an optimized supply chain, improved product design, better quality control, and actionable insights into consumer behavior.
However, gaps like access to local data and high-speed infrastructure still need addressing to build a strong AI ecosystem in the Philippines. The DTI AI roadmap proposes various initiatives to bridge these gaps and boost AI development and adoption across industries, including MSMEs.
- National Data Center (NDC): Support MSMEs' research and development efforts by providing access to many datasets, such as public, government, and private datasets.
- National Research Cloud (NRC): Provides AI computing resources to MSMEs.
- National Center for AI Research (NCAIR): Help MSMEs leverage Data Science, Analytics, and AI tools to enhance efficiency and productivity.
3. Big Data Implementation
Even small enterprises possess significant customer data sets—from sales figures to web browsing logs—which can be utilized to extract valuable insights into customer behavior, market trends, and competitive landscapes.
Having the right tools and approach to handling Big Data enables MSMEs to boost efficiency and revenue by improving business aspects.
- Customer Service: MSMEs can offer personalized experiences, predict customer needs, resolve issues proactively, create tailored solutions, and adjust strategies based on customer feedback using insights from their databases.
- Business Operation: Big data tools offer MSMEs a 360-degree view of their operations, covering inventory management, supply chain optimization, production planning, and predictive maintenance.
- Marketing Strategy: With Big Data, MSMEs can segment their target market, analyze the effectiveness of marketing campaigns, identify new opportunities for growth and innovation, and optimize pricing strategies.
4. Employee Monitoring
According to SEEK Asia,5 52% of Filipino workers worked remotely before the pandemic. As remote and hybrid work arrangements become more commonplace, MSMEs can benefit from implementing employee monitoring software. This technology allows businesses to track productivity and improve remote team communication and collaboration.
5. Omnichannel Customer Engagement
A 2023 McKinsey Philippines consumer sentiment survey6 found that 80% of respondents regularly use online and omnichannel platforms to buy footwear, toys, baby supplies, apparel, and accessories. In response, businesses can utilize omnichannel innovations that create a seamless and personalized customer experience across all touchpoints, be it social media, websites, mobile apps, or physical stores.
How MSMEs Can Leverage These Technologies
Here are some ways MSMEs are leveraging automation, data analytics, and AI to streamline operations and drive growth.
Automation
Automation and AI can enhance the operations of MSMEs by offering 24/7 customer support, facilitating order placements, streamlining payment transactions, and optimizing inventory management.
According to ASEAN,7 digitalized MSMEs can be categorized into three levels: Basic, Intermediate, and Advanced. These levels represent the degree of automation in a business.
- Basic: MSMEs at this level use basic technology, such as email and office applications. These tools mostly facilitate communication and operations.
- Intermediate: These businesses use e-commerce platforms for online sales and have adopted digital tools like accounting software and CRM for sales and customer management.
- Advanced: These businesses have digitalization applied in various aspects of their operations.
Data and Analytics
Cloud computing can boost data analytics by providing strong access to data storage, processing, and visualization services. For example, cloud-based databases allow for the storage of large amounts of data with high availability, reliability, and security.
This is particularly helpful to various sectors that are employing data analytics in their business decision-making.
- Healthcare: Data analytics enables providers to gather vital insights from patient data, improve treatment plans, and enhance patient care.
- Retail: Using data analytics, retailers can grasp customer behavior and improve product offerings, store layouts, and marketing strategies.
- Manufacturing: Manufacturers use data analytics to manage supply chains, spot and fix bottlenecks, boost productivity, and make their processes smoother.
Artificial Intelligence
When AI and Big Data are combined, they unlock valuable insights and enable smarter decisions. Traditional methods fall short due to Big Data's vastness and complexity. However, AI, through machine learning, efficiently processes and analyzes Big Data, uncovering patterns and insights that would otherwise remain hidden. This is crucial for various service industries dealing with Big Data.
- Education: Educators can use AI in many ways, such as giving students personalized feedback, automating admin tasks, and pinpointing areas where students require extra assistance.
- Healthcare: AI can analyze medical data to identify patterns and assist in diagnoses, treatment recommendations, and drug development.
- E-Commerce: AI can personalize customer experiences and streamline supply chain management, making it an essential tool for online retailers.
- Information and Communication (InfoComm): AI helps collect and analyze data from different sources to make decisions quickly. This is useful for advertising, public relations, media, and telecommunications.
What Does This Mean for MSMEs?
Given the rapid pace of technological advancements reshaping business operations and the government's drive towards digitalization, MSMEs must embrace digital innovations to maintain a competitive edge. Embracing a digital-first and data-driven strategy can help MSMEs take advantage of the opportunities presented by Industry 4.0.
At Globe Business, we understand the unique challenges and opportunities MSMEs face. By aligning our expertise and resources with their goals, we can help unlock new avenues for innovation, efficiency, and growth, ensuring they are prepared for their next tech adoption.
Ready to take the next step? Contact your Globe Business Account Manager today.
Sources:
1https://www.dti.gov.ph/resources/msme-statistics/
2https://www.dti.gov.ph/archives/news-archives/dti-to-launch-an-online-self-assessment-toolkit-msme-digitalization/
3https://technology.inquirer.net/126558/alibaba-cloud-small-business-cloud
4https://www.dti.gov.ph/archives/dti-collaborates-with-amazon-web-services-to-boost-the-digital-capacities-of-philippine-industries/
5https://web-assets.bcg.com/74/33/14077446434fa8685891ba0e2e69/bcg-decoding-global-ways-of-working-mar-2021.pdf
6https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/survey-filipino-consumer-sentiment-during-the-coronavirus-crisis
7https://connectivity.asean.org/wp-content/uploads/2018/11/Study-on-MSME-Participation-in-the-Digital-Economy-in-ASEAN.pdf
