Singapore businesses 'unsure', 'pessimistic' on three-year outlook, hampering sustainability efforts: Paessler
As the market outlook darkens, firms are opting for profitability over sustainability.
Businesses in Singapore view sustainability and digital transformation in silos and not intertwined, says IT monitoring firm Paessler at the release of its new study on June 27, and as the market outlook darkens, firms are opting for one over the other.
The German multinational company’s Keeping Watch: Monitoring Your Path to a Sustainable IT report found that 58% of the businesses in Singapore already have a sustainable IT strategy in place, while 33% are expected to begin in the next one year.
While most businesses across Asean and the Australia and New Zealand region are optimistic about the business outlook over the next three years, businesses in Singapore, however, are most conservative, with 23% being unsure or pessimistic about their business outlook.
Businesses in Singapore are focused on digital transformation, sustainability and increasing productivity and efficiency in order to be better positioned as the global economy slows, says Paessler, which sells network monitoring software to companies.
Many businesses see sustainability and profitability as a contradiction, says Felix Berndt, regional sales manager of Asia-Pacific at Paessler. “But when the right values are measured, it results in cost efficiency and a competitive lead. It is imperative to build a robust IT strategy, a digital transformation strategy and develop a sustainability framework which are all integrated by a comprehensive IT monitoring framework.”
Paessler’s study was conducted by Intuit Research between December 2022 and March this year to understand the current state of sustainability practices among businesses, as well as drivers and barriers in deploying sustainability IT practices.
The researchers interviewed key business decision makers from six countries — Singapore, Thailand, Malaysia, Indonesia, Australia and New Zealand — working in manufacturing, essential services, technology, telecommunications and data centres. These companies had revenue from US$50 million to over US$1 billion.
Organisations in the region are working on developing sustainability frameworks and digital transformation strategies “in a piecemeal manner”, says Paessler. Businesses are focusing instead on “easy-to-achieve” corporate metrics, such as product safety and quality (72%), recycling (60%), water or energy saving (58%) and transparent financial reporting (59%).
One decision-maker from an Indonesian garment manufacturer tells researchers: “Sustainability cannot come at the expense of customer experience or business profitability. It is a good corporate metric and warranted by our investors and industry regulators. Unfortunately, during an economic downturn, sustainability metrics take a backseat.”
While sustainability is one of the top business priorities for the next three years, it does not even feature as one of the top five challenges for businesses across markets and sectors surveyed, says Paessler.
Instead, challenges such as increasing competition, digital transformation, driving topline growth, improving profitability and talent management are seen as top five challenges by businesses.
The top three drivers for adopting sustainable frameworks are reputation (45%), following industry operations standards (36%) and adhering to regulatory framework and compliance (24%), according to the study.
Within Asean, Indonesia lags behind other markets while businesses in Australia and New Zealand are ahead on their sustainability journey, says Paessler. One food manufacturing company leader in Indonesia says: “Since the pandemic, business focus has shifted to survival and growth. Sustainability has taken a backseat within the organisation and we will focus on it again in two years' time.”
Although sustainable IT strategy is on companies’ radar, most businesses believe there is a lot that can still be done, says Paessler.
According to the study, 96% of businesses feel their top management lacks awareness and knowledge about sustainable IT strategy. One decision-maker in the data centre business says: “Without awareness and knowledge, top management does not see how valuable a sustainable IT strategy is in achieving overall sustainability and ESG goals.”
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