The number of Asia Pacific SMBs expecting to generate 31-41% of their revenues globally in the next three years jumps by nearly 90%, said SAP Tuesday when releasing results of a survey by Oxford Economics--a commercial venture with Oxford University's business college to provide economic advice and forecasts to organizations.
According to SAP, Oxford Economics surveyed 2,100 executives from SMBs in 21 countries including Australia, China, India, and Indonesia.
Only 12% of Asia Pacific SMBs earn their revenue exclusively at home--and this is expected to drop to just four percent in three years' time as they face increased competition from foreign companies, SAP noted.
The findings overturn industry stereotypes of smaller companies as local or regional entities that are largely technophobic, the vendor said.
"Recognizing the opportunities for international expansion is clearly not 'new' to this region, nor is the notion of business transformation," said Bronwyn Hastings, senior vice president, Ecosystem and Channels, SAP Asia Pacific Japan. "However, maintaining competitive advantage across such a diverse range of markets is a key priority for SMBs in the region, particularly when it comes to managing supply chains and subsidiaries. Having clear business insight across the entire organization at any one time is of the utmost importance for those firms with a significant global footprint."
Other important findings also include the followings, according to SAP.
9% of respondents currently do business in six or more countries, a figure that's expected to rise to 26% in three years. The number of Asia Pacific firms doing business in 10 or more countries will increase sharply in three years, with five-fold expansion among Australian firms and more than 100% growth among firms headquartered in China, India, and Indonesia.
Around one-third of respondents in Asia Pacific cite increasing global competition, economic uncertainty, and increasing labor costs as the top three trends affecting their business today. About 60% say competition from companies in other countries has increased substantially in the past two years. More than 65% say they are competing more with larger companies now than in the past.
Asia Pacific SMBs recognize they must embrace business transformation to compete. More than three-quarters of all companies surveyed in Asia Pacific are at some stage of the transformation process (i.e., about to begin, in process, or recently completed), with transformation understood as making significant changes to a firm's business model, technology, product offerings, or go-to-market strategy.
Asia Pacific firms expect business analytics (72 percent), business management software (67 percent), and social media (66 percent) to be widely adopted at their organizations in the next three years. However, less than one-quarter of respondents consider themselves early adopters of technology, compared with almost 47 percent of North American firms. Almost two of three Asia Pacific companies say their technology investment is contingent on a clear ROI.
Cloud computing and business analytics are expected to see the greatest increase in adoption across Asia Pacific SMBs, at 44 percent and 40 percent, compared to the global growth rate of 35 percent and 33 percent, respectively. Consumer-goods firms, at 69 percent, will lead the regional industry growth for analytics, while Asia Pacific retail firms will adopt cloud platforms the fastest, with consumer firms and wholesalers close behind.
Culture of innovation
More than one-third of firms in the region cite creating a culture of innovation as a leading priority in their transformation efforts. 47% percent of them are actively hiring employees to support their growth activities, and 41 percent find it increasingly difficult to recruit people with the right skills.
Cloud adoption and challenges
More than 40 percent of the firms say cloud computing is key to driving cost efficiencies, and the adoption of cloud technologies is expected to grow rapidly in the next three years. Skills gaps are a challenge to cloud adoption in Australia (42 percent) and India (52 percent), and more than half (54 percent) of SMBs across the region worry about the accuracy and reliability of information when using data analytics. 46 percent cite data collection as the biggest challenge in this area.
60% of respondents expect that mobile will be widely in use at their firms in three years and retail companies (34 percent) expect to see the biggest increase in mobile adoption. Over half of the firms expect social media to have a significant impact on revenue growth over the next three years. However, less than one-third say the biggest benefit of social media will be improved customer service.