The recent Budget 2012 is clear that productivity-driven, rather than labour-driven, growth will pave the way for Singapore?s future. The government has adopted a carrot- and-stick approach by tightening the foreign worker quota and incentivising innovation and productivity through enhancement of the Productivity and Innovation Credit (PIC) scheme. Tightening of foreign labour will raise costs and require businesses, especially small and medium-sized enterprises (SMEs) ? including small and medium-sized accounting firms ? to relook their processes and consider ways of raising productivity to be profitable. The Institute of Certified Public Accountants of Singapore (ICPAS) is keen to explore ways of taking advantage of technology as part of its effort to enhance its members? productivity and increase the competitiveness of their businesses.
To do more with less, it is timely for SMEs in Singapore ? numbering some 154,000 ? to consider adopting cloud computing among various technologies. Put simply, cloud computing is the concept of creating access to office software, business applications and data online, managed by a third-party service provider.
Anyone who has shared information using Google Docs, Dropbox or hosted photos on Flickr would have come into contact with cloud computing. Cloud solutions can be accessed on any computer or mobile platform, anywhere in the world, as long as there is an Internet connection. With Singapore?s world-class telecommunications infrastructure, gaining access to new business and technology capabilities via the Web has become easier and cheaper.
The case for adopting cloud solutions is gaining momentum. According to a survey, SMEs in the Asia-Pacific region (excluding Japan) will invest US$16.5 billion in cloud computing solutions. Asean markets, with an annual growth potential of over 20 per cent in cloud investments, are expected to be the next fastest growing sub-region after China . Globally, 39 per cent of SMEs are expected to be paying for one or more cloud services within three years, up from 29 per cent now. This increase in the adoption rate reflects the numerous advantages of cloud computing.
Dumas Chin, SingTel?s vice-president of business sales, highlighted: ?With the advent of cloud computing, SMEs are finally able to access much needed info-communications technology resources, which were previously available to much larger companies, at a fraction of the cost. Therefore, SMEs are able to improve their productivity, increase business agility and reduce their operating costs substantially.?
A big plus
Businesses have often wrestled with the challenge of high capital investments in hardware and software. With cloud computing, users need not buy or install any hardware to use the solutions. Instead, the infrastructure and software can be accessed on demand through Web portals, for which users pay a modest monthly subscription.
As an illustration, an SME with four employees need just pay a monthly subscription fee of only $29.90 for four SingTel QuickBooks Online user licences, with free local support and product upgrades. In contrast, a similar SME would have to fork out about $2,799 to acquire and install its own off-the-shelf financial and accounting package. This efficient and asset-light approach frees up cash flow for businesses, thus allowing them to channel their capital to more productive use. Thus, SMEs no longer need to invest in new hardware, software or employ any IT staff to get started on cloud solutions.
It is a big plus for employees to access their data and applications on secure online platforms from any mobile devices. This allows them (especially sales and marketing staff) to close deals, respond to customers and obtain market information more quickly. This mobility feature helps them stay ahead of the competition in today?s fast-paced environment. Further, SMEs do not have to worry about nor pay for continuous software upgrades, patch releases and software licence management. Unlike buying a fixed number of user licences for a conventional software package, cloud solutions allow SMEs to scale their usage according to business requirements, and its use is intuitive.
Currently, there are many technology service providers who offer a wide range of business cloud solutions. For example, QuickBooks Online solution is secure, Web-based, convenient and easy to use. This business accounting software for SMEs helps them organise their finances, send invoices to customers and generate profit- and-loss statements and balance sheets, among various things. SMEs can even update their customer information or check their business health on their mobile devices. The solution?s well-thought-out features make it intuitive to use. Unlike off-the-shelf solutions, users do not need to customise computations to generate the figures. As the solution is compliant with local accounting standards, users need only key in the relevant figures to generate key business reports and file the Goods and Services Tax returns.
?By exploiting the full potential of cloud computing, an SME will get more bang for its buck and effect a formidable ?force multiplier? to face the competition in today?s challenging economic climate. If properly harnessed, cloud computing will enable SMEs to achieve the twin aims of raising their productivity and lowering business costs,? added Mr Chin.
Evan Law, acting CEO at ICPAS, highlighted: ?Similarly, small and medium-sized accounting firms may employ such hassle-free cloud solutions as their strategy to increase accessibility of work-related information offsite. This may help increase the work-life balance of their staff and enhance staff retention. It is important for these firms to stay ahead with new technologies to benefit their own practices and as a form of advisory service to clients.?
By capitalising on cloud computing, SMEs can generate new revenue streams as well as boost client satisfaction and loyalty with such value-adding services.
Recognising that SMEs stand to gain from technology solutions, the government has introduced financial incentives to encourage its take-up rate. There are at least two possible schemes, such as the Increase SME Productivity with Infocomm Adoption and Transformation (iSPRINT) and the Productivity and Innovation Credit (PIC) scheme.
For SMEs that are currently manual in all their operations and intending to implement information and communication technology (ICT) solutions for the first time, iSPRINT?supports up to 70 per cent of qualifying costs. Under PIC, companies are encouraged to raise productivity and innovation through the adoption of technology.
For instance, expenditure incurred on procuring cloud computing services will qualify for enhanced deduction under the heading of PIC automation equipment. This means that SMEs which adopt cloud computing will qualify for tax deduction at 400 per cent or up to $400,000 of qualifying expenditure incurred per year. With the enhancement of the PIC?in Budget 2012, companies can enjoy 60 per cent cash payout for up to $100,000 of the firm?s PIC expenditure on a quarterly basis.
Truly, this makes the productive and innovative deployment of technology even more appealing.
CASE STUDY: iGROW Pte Ltd
?We were at our wits end trying to source for another financial package which offered simplicity, security, customisation with the option of adding on future applications and most importantly, affordability. The replacement software also had to be accessible outside of the office as it would align our staff with our corporate culture of flexibility and work-life balance,? Mr Lim said.
He found the solution in a cloud-based financial and accounting solution. Having successfully transitioned his company onto the cloud computing platform, a relieved Mr Lim said, ?The new cloud computing financial and accounting package has revolutionised the way our company works. My staff and I adore its online access which means that we can login to the apps anytime from our homes and mobile devices.? What?s more, I can access important information within clicks, to manage my business effectively and make objective and swift decisions.
?A job which required hours to complete in the past can now be done in a matter of minutes. Looking at the number of man-hours saved from using the new cloud-based financial and accounting package, I reckon that iGROW has increased our productivity by at least 30%,? he chuckled.
This article was contributed by SingTel and the Institute of Certified Public Accountants of Singapore (ICPAS).?Published in Business Times (3 April 2012).
Find out more about cloud-based financial solutions at SingTel myBusiness.
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