Energy Management Can Support Malaysia’s Small Businesses in Recovery

By Francis Heng, Business VP, Home & Distribution for Schneider Electric Malaysia & Singapore

As businesses across Malaysia fight to maintain market growth in an economy stunted by the pandemic, we must ensure that our small and medium sized companies (SMEs) are not left behind. As we look ahead to an economic rebound, we must support small businesses in addressing business infrastructure issues that threaten their resilience and competitiveness in a reset economic landscape.

SMEs fuel Malaysia’s economy. With 98.5 percent of our country’s businesses made of SMEs, their contribution is key to our recovery as a nation. These numbers not only demonstrate the importance of SMEs to the economy, but they also provide a window into the fierce competition between SMEs for market share in increasingly crowded online and traditional marketplaces.

Energy management is one critical area where the stakes are high, and an area of business that SMEs must optimize in order to not just stay ahead of the game but survive. In an era of tighter margins and increased competitiveness, developing an energy management plan allows SMEs to cut operational costs, increase efficiency and ensure business continuity in a changing energy landscape. An energy management plan is necessary for SMEs to meet the evolving expectations, and sometimes standards, of governments and consumers around sustainability.

The relationship between a business and energy supply is changing. SMEs across Malaysia are inevitably focused on generating revenue growth and short-term profit, often with little time and resources devoted to creating efficiencies across their most basic functions. At Schneider Electric, our experience shows that reducing resource consumption by implementing some of the scalable technologies now available to SMEs – technologies that were once only available to large enterprises – can have a major impact on profitability and competitiveness. This and other efficiency gains will be important post pandemic.

A reset economy will encourage SMEs to interrogate their bottom lines more closely. An energy management plan can be the key differentiator for a business profitability, enabling SMEs to shave up to 50 percent off their energy costs. These savings can be channelled into increasing a SME’s competitive advantage, like improving R&D and marketing, or into business rebound strategies.

At the same time, shareholders, customers, and employees are asking companies to operate with a lighter environmental touch. This pressure will encourage SMEs to act quickly or risk becoming uncompetitive and unattractive to customers who increasingly value environmental credentials. SMEs in Malaysia looking to grow faster than their competitors can not only decrease their overhead costs but can also proactively look to meet the ever more stringent energy and evolving expectations and standards.

As the urgency to meet climate targets increases, governments across the region are implementing policies and plans to ensure that companies take the steps necessary to decrease their energy usage and emissions. Malaysia has taken a steadfast approach in launching the Malaysia’s National Energy Policy that serves as the planning and development agenda for the country’s energy sector as it transitions towards a low-carbon future.

Smart SMEs can stay in front of changing policies by meeting these standards before they are enforced. Those that do will be in a prime position to meet global export standard demands, reduce energy consumption and emissions, and remain attractive to global and knowledgeable customer-bases with increasing environmental responsibility demands. The alternative is being left behind.

Digitization technologies can deliver low-cost, data-driven energy management plans for SMEs. Platforms such as Schneider Electric’s EcoStruxure allow companies to combine energy usage data onto a single platform, where it can be analyzed for key action areas. Data-driven decisions will allow SMEs to become less reactive and more proactive about their energy choices. By being able to predict and prevent problems, improve forecasting and purchasing decisions and reduce downtime, SMEs will be able to meet their profitability and environmental targets.

We know that 48 percent of companies globally have no strategic energy plan, and this number increases as the size of the company drops. This is a concern for an economy that will need to be optimized for economic recovery in a post-pandemic reality. The time is right – and critical – for those SMEs looking to cement their competitive advantage, increase their profitability, meet the changing expectations of governments and customers, and ensure their business continuity, to establish a digitally-driven energy management plan that helps Malaysia reignite growth.

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