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Covid will spur digital transformation of Philippines’ SMEs

Small and medium enterprises (SMEs) have been looking to digitise their businesses for some time. The fact that digital transformation is key for their sustained growth has been talked about for some years. However, its importance and the scale of the impact it can have on their business, has never been clearer than the past few months.

The outbreak of COVID-19 has changed the world around us drastically. Governments across the world have imposed various measures to contain its spread. These include travel restrictions and, in many cases, widespread shutdowns, as they look to protect citizens and residents.

These measures while necessary, have had a big impact on businesses, especially SMEs. They have had to figure out how they continue to operate safely, deliver to their customers, and keep their employees engaged, even as they transitioned their entire workforce to work-from-home.

A majority of them have leveraged technology to do that. From collaboration platforms to conduct virtual meetings, to cloud-based services and cybersecurity solutions, technology has become the lifeline of SMEs across all industry sectors.

Even as governments, including in Asia-Pacific, start to ease some of these restrictions, SMEs will continue to adopt technology. In fact, the pace of adoption will increase further. This will be driven by three key factors.

Cloud-based services

The pandemic has made SME leaders realize they need to build resilient businesses, ones which are able to operate and deliver to customers in various scenarios. Cloud-based services will play a key role on that front. The last three months have shown why.   

With companies seeing their entire workforce operate remotely, SMEs needed to find a way to help the teams collaborate and continue to run the business. Cloud-based collaboration tools emerged as the biggest enablers.

At Cisco, we have seen the demand for our Webex collaboration and conferencing increase substantially during the period. Being cloud-based, we were able to add millions of new users across the region, helping thousands of businesses, including SMEs, to continue to operate seamlessly. We have also seen a growing demand for our cloud-managed platform Meraki. Its open API which helps it integrate with other solutions that a business might be using, have made it a go to solution especially in sectors such as e-commerce which have seen exponential growth during the pandemic not least because of restrictions on movement. 

For SMEs, APIs represent a huge opportunity as they can help them automate parts of their business that they never thought possible, create seamless integrations between all cloud services, and develop automated reports and dashboards. This helps them achieve maximum flexibility and differentiation.

Given the success and agility that companies have found with cloud-based collaboration platforms, leaders will surely explore other areas of their business where cloud-based solutions can help. This can include areas such as human resource management systems, accounting services, workplace resources etc.


An increased adoption of cloud-based technologies, coupled with acceleration of digital adoption across the business, will bring along its own set of challenges as well. The biggest will be that of cybersecurity.

With cloud-based services becoming more mainstream with SMEs, many of the applications and services they use will likely sit on cloud platforms. At the same time, as flexible working becomes the norm, customers and employees will be accessing these services and resources from multiple devices and using various networks including public wi-fi connections which may not have the same security as found on an office or home network. SMEs will need to ensure that they have the right security solutions in place to ensure they are able to keep their data and infrastructure safe.

Increased adoption and use of technology and digital services means that SMEs will generate a large amount of data – of their own business, employees, as well as customers. This ranges from personal information, financial data/records, details of services consumed etc. Hackers across the world are looking to steal such information and their attacks continue to become more sophisticated.

Given the sensitivities around data privacy, and stringent regulations in many countries, SMEs will have to ensure that they protect themselves adequately against such attacks. The combination of all these factors will drive demand and adoption of cybersecurity solutions across the sector.

Virtuous cycle

SMEs are a critical part of Philippines’ economy. Micro and Small & Medium Enterprises account majority of all businesses and 63% of the Philippines’ total employment. The government realizes this and has launched various measures to help the sector wade through the current scenario.

Other stakeholders have also come forward to play their part. At Cisco, we have launched a new financing programme to help SMEs purchase Cisco’s technology at 0% interest and with no upfront costs, at a fixed 3-year monthly payment term. SMEs will be able to purchase hardware, software solutions, as well as services under the programme.

All this support will further accelerate the adoption of technology among SMEs. As that happens, SMEs will see a tangible impact on their business, especially in productivity, as well as a reduction of costs – two key areas of focus for them.

Increased efficiency, coupled with lower costs of operation, will have a positive impact on their profitability. This in turn will see them invest in technology further as their business continues to recover and grow in a post COVID-19 world, bringing in additional and incremental benefits.

It is the kind of virtuous cycle that countries across the world are yearning for as they look to rebuild their economies post the current crisis. SMEs, often referred to as the ‘engine’ of economy, will once again be the driver of growth.


This is a paid press release from Cisco ASEAN