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Indonesia: Digital tools give SMEs opportunity to evolve
Small and medium enterprises (SMEs) stand to benefit from digital tools to manage their finances and operations, as well as make strategic business decisions as the pandemic accelerates the use of technology, experts have said.
Adhitya Satriadi, the managing director of TMP Accounting, said on Thursday that there were plenty of digital tools in the market to help SMEs optimize their businesses.
“There are several tools that can make your life easier in order to better manage your finances,” Adhitya said in a Jakpost Up Close webinar titled “Digitizing SMEs, managing finances to weather crisis”. MokaPos, Xero, Google Drive, OnlinePajak, Gadjian and Syft Analytics are some of the digital tools he mentioned.
Adhitya said the pandemic was giving SMEs the opportunity to digitize and better manage their finances throughout the pandemic, which has hit small businesses hard. Out of more than 60 million small businesses in Indonesia, only 13 percent have gone digital.
Micro, small and medium enterprises account for 60 percent of Indonesia’s GDP and 97 percent of the Indonesian workforce, according to official data. An estimated 5.5 million workers risk losing their jobs as a result of the pandemic, indicating the crucial role SMEs play in the Indonesian economy, The Jakarta Post deputy editor-in-chief M. Taufiqurrahman said in the webinar.
Gojek head of merchant platform business Novi Tandjung said a recent survey on its merchants in April indicated there was optimism over an economic recovery. Eight out of 10 businesses said they expected business conditions to improve in the next six months, according to the study.
“Things are changing and they need to adapt. But they feel super optimistic,” Novi said. “They do have the survival mentality [and their] adaptability is high. That is encouraging for us.”
Since the COVID-19 pandemic hit Indonesia in March, leaving brick-and-mortar stores with fewer customers, more than 100,000 small businesses have signed up for Gojek’s digital tools, according to data collected by the firm between March and May.
Hoping to capitalize on the opportunities presented by this, Gojek is offering multiple tools SMEs can use to expand their access to consumers, business knowledge and infrastructure, with analytical tools and apps being used to manage supplies of raw materials.
Most SMEs that had partnered with Gojek used its point-of-sales platform, GoBiz, to manage their finances, Novi said.
Recognizing that the pandemic has forced small businesses to adapt, the government has partnered with tech-based companies to help 2 million small businesses establish an online presence.
Big businesses are also helping, using digital tools to support their growth. Gojek’s analytical tools have helped coffee chain Kopi Kenangan identify locations that have a high demand for its products.
“It is very important for us to understand consumer behavior,” said Rahmat Budiardjo, Kopi Kenangan senior vice president. “It will be very important in the future.”
The coffee chain, after securing US$109 million in its latest round of funding in May, is planning to open 500 new stores this year. The firm currently operates 324 stores and delivers its beverages, including iced coffee, via its mobile app and GoFood.
Between March and May, Gojek booked a threefold increase in instant food and drink transactions on GoFood.
Local fashion brand Cotton Ink also uses digital tools, including social media, to communicate with its customers. The pandemic, for example, led them to double down on its strategy, according to Ria Sarwono, the firm’s founder and marketing director.
Cotton Ink tried to introduce new products like cloth masks and expand its customer base by opening a business-to-business partnership to offset the losses caused by pandemic restrictions.
However, like other firms, the pandemic-induced downturn forced the firm to keep revising its long-term business plan and consider taking a bank loan to stay afloat.
“Before the pandemic, we had a three-year plan, five-year plan. But everything changed three months ago,” Ria said.
“We do not have an emergency fund. I think this will be the first time we consider a bank loan to support our operations.”
Adhitya of TMP Accounting said businesses needed to build an emergency fund regardless of their size, one that could cover operational expenses for three to six months.
“In the pandemic situation, the emergency fund is one of the most important things businesses should have because of the uncertainty,” said Adhit.
“In this pandemic, business owners also have to run through all expenses and cut unimportant expenses to make sure the business is running as efficient as possible and as long as possible.”
Source: https://www.thejakartapost.com/news/2020/07/09/digital-tools-give-smes-opportunity-to-evolve.html