Study finds Singapore businesses struggle with tech scaling

Businesses in Singapore and Southeast Asia are investing in emerging technologies, such as generative artificial intelligence (GenAI), the internet of things (IoT), and 5G, but are facing challenges in moving beyond the pilot phases to full implementation.

A study conducted by EY, encompassing 1,635 businesses globally, including 103 in Southeast Asia and 63 in Singapore, revealed that more than half of Singaporean businesses are investing in GenAI (54%), IoT (62%), and 5G technology (40%). These figures mirror the investment levels across the broader Southeast Asian region.

This study highlighted a diffusion of decision-making across the C-suite, particularly with Chief Executive Officers (CEOs) increasingly involved in technology strategy decisions. In Singapore, 49% of CEOs participate in the choice of suppliers, while the Chief Information Officer (CIO) remains the primary decision maker, at 67%.

Despite significant investments, many businesses remain in early trial stages. Seventy-seven percent of Singapore companies investing in GenAI are in proof-of-concept stages, and only 24% have moved to pilot projects in limited business areas. Currently, no businesses in Singapore or the wider region have fully integrated AI into their critical workflows.

Joongshik Wang, EY-Parthenon Asean and Singapore Strategy and Execution Leader, remarked, "While enterprises are keen to invest in emerging technologies, many businesses struggle to bridge the gap between pilot and full-scale implementation. This is often due to integration challenges, lack of clear return on investment (ROI), and the need for stronger ecosystem support to drive business value."

The study indicates that better awareness of ICT suppliers is crucial. Eighty-one percent of respondents in Singapore indicate the necessity for a greater understanding of the supplier ecosystem. Awareness levels of new mobile technology capabilities like network application programming interfaces (APIs) and network slicing remain low, complicating vendor selection.

Many businesses prefer suppliers who can demonstrate measurable business outcomes. Thirty-three percent of Singaporean respondents prioritised business outcomes over cost or simple technology benefits and indicate the significance of access to a robust partner ecosystem.

Efforts to consolidate suppliers are also noted, with 41% of Singaporean respondents planning to reduce their number of ICT vendors over the next year. This consolidation is driven by the need to enhance security, compliance, and simplify technology integration.

Commenting on the critical role of ICT suppliers in digital transformation, Wang states, "In Asean, digital transformation success hinges on ICT suppliers, from technology vendors to strategic partners. ICT providers must co-develop industry-specific solutions, strengthen ecosystem collaboration, and drive data-led sales and commercial strategies to help businesses unlock the full potential of their digital transformation efforts."