Comment: Irish SMEs must innovate to thrive
Small and medium sized firms need to adapt to new technologies which can help them face the future with optimism and confidence
Running a small business has never been easy. Throw the pandemic and Brexit into the mix and it’s clear that small businesses have their work cut out for them if they intend on thriving.
Small and medium-sized enterprises located in Ireland, have faced challenges in navigating a post-Brexit, and indeed a post-Covid world. In some way, we are still very much unaware of the lasting impact both of these recent events will have on the daily business conducted by SMEs throughout the country.
While Irish SMEs have been navigating through this incredibly difficult period of adversity and restriction, Asian SMEs have flourished in terms of innovation. Despite being successful in generating high-growth companies, a report from the Organisation for Economic Co-Operation and Development has highlighted that Irish SMEs are still challenged with a slower pace of digitisation.
The challenge facing Irish SMEs and true innovation
From having immediate experience in this matter, it appears evident that there are several areas that Ireland has a lot of work to do before we can catch up to truly innovative countries. We’ll take small business finance and consumerism as a benchmark for the sake of this comparison.
In Asia, consumers are generally more comfortable using Quick Response, or QR payments. These payments involve consumers scanning a static or dynamic code to make an instant digital payment from their smartphones. This solution is then directly connected to business bank accounts, and payments are accepted instantly. This is not just an example of adopting a new fad technology for the sake of it. Instead it’s precisely the type of technology that benefits both consumers and small businesses with affordability, security, convenience, and an ultimate control over their cash flow.
Using this technology ensures that consumers can transfer any amount of funds without the hassle of performing traditional bank transfers. The use of this technology by businesses ensures that they are cutting out the long-established middleman fees and can instantly accept payments via mobile through a scan to pay approach.
The Asian SMEs accepting instant payments in this way are improving their business’s cash flow, reporting efforts and bank reconciliation significantly. In contrast, Irish SMEs are continuing to struggle with expensive transaction fees that accepting credit and debit card payments brings.
As a multinational organisation, we see this stark contrast between our Irish and Asian SMEs customers daily. On one hand, SMEs in countries like Singapore, Malaysia and Thailand have begun accepting QR payments, eWallets and such. And as a direct result, the competition between many providers has allowed lower fees of adoption than ever thought possible. On the other, Irish businesses have yet to fully realise the powerful effects of accepting digital payments that link to their bank.
Irish SMEs are left to shoulder transaction fees when they shouldn’t have to, which is difficult to watch when businesses in other parts of the world are adapting to innovative technologies.
Speeding up the rate of digitisation in Ireland
While there has definitely been an admirable effort to help our SMEs through the pandemic with some financial support, it is apparent that Ireland lacks foresight when it comes to putting in place strategies that will improve a business’s resilience both during and after Covid-19. As noted by the OECD, one of the most significant downfalls for Irish SMEs was the lack innovative collaborations with external partners.
In comparison, south-east Asian countries go above and beyond to empower their SMEs and to build durability within their banking and finance systems. For example, the Singapore government has continued to introduce grants, bonuses and other forms of support to help SMEs scale their businesses despite the financial uncertainty a global pandemic brings. They have put a special emphasis on front-facing businesses, those in the food and beverage industry, to help them manage their payroll, accounting, and finance and more.
We have been able to collaborate with some of Singapore’s largest banks, including United Overseas Bank (UOB) on multiple occasions to develop products that can benefit the country’s SMEs.
Collaborations such as these should be an area of focus for SMEs throughout Ireland as it allows them to tap into markets and leverage other audiences that wouldn’t usually be available to them.
Irish businesses must approach their sales and marketing on an omni-channel level too. If there’s anything that Covid-19 and Brexit have taught us, it’s the importance of having your physical and online presences in sync. Cloud technology, for instance, is one of the most important drivers of digital innovation. It’s high time that SMEs in Ireland understand that although they are sole owners of the business or running operations on a small scale, that relying on spreadsheets or hardcopy paperwork doesn’t do them any favours.
Brexit shone a light on just how important it is to have a solid management system in place for a business’ supply chain. A good rule of thumb would be to look once again into your current procurement process, storage and fulfilment. Then, simplify these operations with the help of innovative technology and simple cloud platforms that integrate with your bank for easier tracking.
How automation and innovation are the key to future-proofing your business
The impact of Brexit and Covid-19 presents an opportunity for Irish SMEs to re-evaluate their supply chain processes, digital finance capabilities, and sales strategies. Small business owners in Ireland need to take a long and hard look at areas of their businesses that still apply outdated strategies and tools that will have a tough time keeping up in a world with Covid-19 or new consumer behaviours after lockdown.
Solid infrastructure in terms of business banking and contactless payments is a place to start; especially if your SME relies solely on accepting cash.
Automation and innovation are no longer a secret kept by multinational corporations – but rather a necessary journey that must be taken on by Irish businesses looking to get ahead of the curve.
Morgan Browne is the chief executive of the Irish fintech company, Enterpryze