Three Digital Transformation Challenges in Singapore

Unpacking the top three challenges that Singaporean SMEs and MNCs alike face in their digital transformation, and discussing feasible solutions to these issues. 

Digital transformation in Singapore

You’ve probably encountered the popular phrase “digital transformation” at least once, a technological movement to better the workplace — but the term often gets lost in translation when it comes to implementation, execution and measurable returns.

Often conflated with intimidating terms such as “artificial intelligence (AI)” or “internet of things (IOT)”, digital transformation actually refers to the process of replacing tedious, manual operations with efficient, automated softwares or hardwares. This means it could simply be the automation of outbound mail processes with a postage meter or a letter opener!

Multiple business reviews stress the urgent adoption of digital transformation strategies at once. Research by McKinsey Digital suggests strong links between digital reinvention and revenue increase: “those using digital to compete in new ways, and those making digital moves into new industries — are twice as likely as their traditional peers to experience exceptional financial growth”. In a separate report, McKinsey highlights lucrative “500% revenue growth of B2B digital leaders” and a “10% to 20% cost reduction from transforming customer experience processes”.

Despite a repeated emphasis to be future-proof, Singaporean businesses, however, were revealed to be struggling with digital reinvention efforts, or more surprising, resisting transformation altogether. The top three challenges in digital transformation efforts are limitations from legacy infrastructure (63.1%), lack of digital talent (60.0%), and uncertainty around how to align new digital technologies with broader enterprise strategies (53.8%), according to a recent survey by EY-Parthenon Singapore


  1. Legacy infrastructures that hinder digital transformation

Legacy infrastructures are defined by outdated internal office systems that remain heavily used throughout an organization. ComputerWeekly contends that several businesses are held back from making digital advances due to their reliance on legacy applications. It may simply be that the current system provides decently for the users’ needs, and therefore users see no reason to improve it – echoing a common untruth that one “does not need to fix what is not broken”. 

Legacy systems typically support file formats up to a certain point – until those formats evolve beyond what the legacy system can handle. Historic data that is unable to be processed by new system formats can turn decades of intelligence into worthless information. That data can take months to manually convert, which then affects business intelligence and operations reporting.  

It may also seem like legacy systems are less expensive, but over time that becomes less true. Support and updates for older systems (if available) is usually much more expensive than support for the current model because it takes a lot more work for developers to offer continued maintenance. It is imperative to start slowly now, then face sudden disruptions in the future as newer technologies begin to dominate. 


  1. Lack of digital talent to carry out digital transformation

The sheer breadth of technological solutions and proficient staff required to truly transform an enterprise is not a number to be underestimated – and it’s particularly harder for large, traditional firms with staff who have worked decades without digital processes.  

Most companies turn to hiring fresh talent who are digitally skilled, but that strategy isn’t effective if legacy staff are unable to synergize. Furthermore, legacy staff could interpret digital transformation as a threat to their job security and therefore unconsciously resist change.

It is critical for management to tackle these concerns and focus on upgrading legacy staff, while also honouring irreplaceable institutional knowledge. Through structured learning, incentives, and rewards, high performance can be realized in these integrated teams.


  1. Uncertainty of the effectiveness of digital transformation

As mentioned earlier, about half of Singapore-based SMEs surveyed expressed uncertainties about how to incorporate new digital technologies alongside current strategies. These doubts are reasonable given the cost and non-immediate return of investment.

In that case, leaders are encouraged to rethink these uncertainties by evaluating from the perspective of customer value. Every investment in technology should amplify the benefits for end customers – that means tailored experiences and operating efficiencies.

 Baby steps to measure improvements in other key metrics, such as customer retention, sales, productivity, and recruiting, are also essential to stay on target when taking the leap to transform a business.


Smartech Business Systems offers a range of solutions that can automate and streamline your office processes. 

Learn more about how Smartech can help your business level up in its digital transformation today.  


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