APRIL 13 ― The small and medium sized companies (SMEs) should make use of the movement control order (MCO) to re-start their operation via teleworking and a focus on digitalisation.

Both the Covid-19 pandemic and the MCO are game changers in changing the familiar landscape of how we go about doing business into a future landscape where “remote” will be the buzzword.

Given that under MCO all non-essential businesses have to cease operations, the utilisation of digital technology via teleworking is the only way businesses, especially SMEs can still continue to operate under MCO, for otherwise they would face the possibility of business closure for good.

In a broader sense, it is also one of the alternatives to prevent unemployment in the country, as some SMEs will not be able to retain their staffs due to zero revenue during the MCO.

According to the International Monetary Fund, among the negative effects of business closure are the loss of organisational know-how and the termination of successful long-term projects.

So, what is teleworking and what are its advantages?

Teleworking, also known as telecommuting, is defined as the practice of working at home, while interacting with your office by phone or email using the internet.

It means using information technology and telecommunications to replace travels relating to work. It would also enable employees or business owners to work at home using communication devices from their current location to perform work duties.

Well before the advent of the Covid-19 pandemic, the technique is often preferred in other countries such as Europe, and the practice is also commonly used in the US and Canada.

Based on Replicon, a software company that provides cloud time tracking applications, teleworking has become the norm across all business sizes and industries.

The US federal government's statistics has shown that 47 per cent of its employees can work remotely and offsite, and this has been described as a “strategic organisational change programme” for government agencies.

The advantages of a telework programme are widespread and, according to the International Telework Association and Council, teleworking has generated an increase of 22 per cent in employee productivity, a 20 per cent decrease in employee turnover and a 60 per cent decrease in employee absenteeism.

Employees become more productive because the right resources and a flexible schedule would allow them to work anywhere, without office distractions.

Besides, it would also reduce the real estate costs and employees’ costs as parking expenses will be minimised which will reduce the company’s overhead and the employees can spend less on their cost of livings such as food and transport in terms of personal costs.

It would also allow business continuity as the International Telework Association and Council also agree that in the case of a pandemic or some other crisis, teleworking will be a key component of a business continuity plan.

But how does digitalisation impact the SMEs?

Digitalisation is already part of Budget 2020, and it would have several beneficial consequences for SMEs which have contributed 66.2 per cent in employment and a total output contribution of 38.3 per cent to GDP in 2018 is 38.3 per cent.

To support this, a lot of studies have recognised and identified the key role that digital technologies can play in improving the business landscape.

This is because experts believe it will generate unprecedented opportunities to fuel productivity, increase employment and drive innovation such as a myriad of technological developments like Mobile Broadband, Cloud Computing, Big Data Analytics and the Internet of Things (IoT).

It can also accelerate business growth and open up new business opportunities in various industries.

In Singapore, for instance, as a result of Covid-19 pandemic, more businesses are seeing the benefit of increased digitalisation, an observation noted by the republic’s Minister for Communications and Information, S. Iswaran.

Yet we have to take into account that teleworking and digitisation do have limitations.

Firstly, it requires enormous investment in consultancy and technology. But this limitation has been overcome, given the fact that the Ministry of Finance (MOF) has provided the grants for SMEs to adopt it such as BSN's SME Digitalisation Initiative.

Therefore, it is imperative for SMEs not be afraid to invest in teleworking and digitalisation, as under the MCO, this is the only option to save them during the crisis.

The next phase concerns internal processes such as the flexible work and conciliation formulas, information access, openness and promoting innovation. The business model is also required, which involves how information is used by SMEs, processes that allow data to be processed and used reliably and constantly.

Digitalisation should be seen by businesses, especially the SMEs, as the way forward not only to combat the pandemic but also to prepare SMEs for the next phase of digital growth in Malaysia’s economy. It is also vital as a strategy of survival to restart the economy. 

* Farhan Kamarulzaman is a Research Assistant at EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research.

** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.