Digital divide: tackling Southeast Asia’s struggle to modernize small businesses

When it comes to the digitalization of small businesses in Southeast Asia, there’s no lack of startups trying to tackle the challenge. 

After all, it’s a significant opportunity for tech companies in the region. Southeast Asia is home to at least 71 million MSMEs, accounting for 97% of businesses in the region, and many of these businesses  struggle to enjoy the benefits of digitalization. For example, in Indonesia alone, there are 65 million small businesses, and many of them are yet to maximize their potential and participate in the digital economy. 

“There is a really big opportunity [for companies] to tap into Southeast Asia because so many people still do everything the traditional way,” says Lelita Ferdiana, customer success team leader at Odoo a platform offering a suite of business management tools.

However, success has been limited, especially in rural areas. 

Barriers to adoption 

According to Ferdiana, most MSMEs are aware of the value that digitalization can bring to them. Despite this, there are several things holding them back, as she’s observed in her work with Odoo’s customers across Asia. 

Firstly, there’s a misconception around the cost and know-how required to use these tools.

“Some of them feel that, oh, an enterprise resource planning solution is going to be complicated and expensive, so they don’t look into it,” she says. 

Second, many employees at these small businesses struggle with adapting to new platforms and solutions, and tend to default to traditional systems. After all, they’ve been using Microsoft Excel - or just pen and paper, even - for years, and changing habits is difficult.

“Adaptation is hard,” Ferdiana explains. “Like going from an Apple phone to an Android phone, you need time to get used to the differences.” 

Lastly, and most crucially, there’s a reluctance to embrace - and often a fear of - change. While customers come to Odoo because they know that they need a better way of doing things, there’s still a mindset shift that needs to take place. 

“Change is hard - a lot of them keep making comparisons to how things used to be,” Ferdiana shares. “We need to help them break out of this mindset. It’s like if you’re dating a new guy, you can’t keep comparing him to your ex - he won’t be happy, and it hurts your relationship.”

These challenges were apparent in Ferdiana’s work with Aliet Green, a producer of fair-trade organic coconut sugar in Indonesia. Based in rural Yogyakarta, Aliet Green works with local farmers to harvest and process coconut sap into sugar for sale. 

Prior to using Odoo’s platform, the firm was largely reliant on Excel and pen-and-paper processes to track everything from inventory and production to accounting, which was time-consuming and error-prone. It decided to work with Odoo to digitalize, but it took Aliet Green a lot of time to get these efforts off the ground. 

“I realized, ‘Okay, this is not normal. Why is it taking one and a half years for you to go live?’” Ferdiana recounts. “The customer success team dug deep into the issue, and we learned that while the employees wanted to use our platform, they were scared.”

Many of Aliet Green’s employees weren’t tech-savvy and were worried about using the new system, fearing that they would somehow “break” it by filling things in wrongly. They were used to being able to just strike out errors with a pen on paper, or simply deleting cells in Excel, and the idea of “entering” information into a system was daunting. 

“There was a lot of resistance on that front,” Ferdiana says. 

Getting on board

Overcoming these barriers boils down to meeting these MSMEs where they are and supporting them as they go through the changes that digitalization entails.

This includes creating user-friendly interfaces that are intuitive and easy to operate - for example, Odoo’s platform is designed in a way that any smartphone user can navigate it comfortably. 

Ferdiana also recommends encouraging businesses to start small, by digitalizing just one aspect of their operations. 

“There’s no need for everything to go digital at the same time,” she says. “If accounting is an area of focus, then let’s just tackle that first, and then we can move on to other things, like inventory.” 

There’s also a lot of value in going down to the ground. Odoo’s packages all include a team of consultants who work with the small business to set it up for success, making recommendations on how to best utilize Odoo’s tools and conducting the necessary training. 

While these are typically done over the phone or through a video call, in Aliet Green’s case, Ferdiana and her colleague went down to the factory to talk to the teams in person. 

“We went down for a week, and we sat with them to conduct the training and help them as they went about their tasks with Odoo,” she shares. “We reassured them that if they did ‘break’ anything, we were there to help, and this gave them the confidence to use the product and build this habit.” 

With the help of Odoo’s team, Aliet Green’s employees gained the confidence to use Odoo’s system, which has now been implemented across the factory, streamlining operations and improving efficiency and accuracy. 

“Work has become easier, we have more time savings, and we are more labor-efficient and paper-efficient. I am more productive at work. Previously, when I was on leave, I still had to coordinate the production process from home by phone. Now, by using Odoo, my colleagues can access the planning of the production, and see all the operations scheduled for the day, as well as all the tasks and operations for the upcoming shifts, so I don’t need to coordinate from home anymore.” - Ervina Nuzul Fitriyani, planning production inventory control at Aliet Green 

“Human error is greatly reduced. Previously, we would have to Google to get the currency rate and convert it for our customers. Now, Odoo can do it automatically. It has also improved our stock calculation - there used to be a lot of revisions to the numbers, but with Odoo, it’s automatic.” - Puruhita Prawaka, finance and accounting supervisor at Aliet Green

Building a digital future 

Digitalization is a slow journey for many small businesses, but Ferdiana believes that with the right support in place, they will be able to tap into the benefits of digital solutions. 

For other firms looking to drive MSME digitalization, she shares that the road ahead will be a long one. After all, the relationship with a customer doesn’t end with the first successful integration.

“We check in with our customers every three months, and we help identify new opportunities where our solutions can help,” Ferdiana explains. “For example, as your company grows, maybe you can tap into our employees module for people management, or use our email marketing solutions.” 

On Odoo’s end, it’s working to offer more localized support for customers in Asia, such as integrations with regional ecommerce platforms like Shopee and accounting for local taxes and salary guidelines in its HR services. 

“Odoo’s mission is to help companies grow, one app at a time,” Ferdiana says. “We are embracing innovation to really maximize the benefits for our customers and set them up for success.”

***

Odoo provides ready-to-use, comprehensive business management tools to support businesses on their growth journeys.

Read more about how Odoo has supported MSMEs in their digitalization efforts on its website. 

READ MORE

***

This content was produced by Tech in Asia Studios, which connects brands with Asia's tech community. Learn more about partnering with Tech in Asia Studios.