How are Singaporean SMEs benefiting from PSG?

The Productivity Solutions Grant (PSG) is one of Singapore's critical initiatives to accelerate digital transformation among SMEs. In an increasingly competitive business environment, technology adoption has become essential for efficiency, profitability, and growth. 

The PSG empowers SMEs to transition smoothly into digital workflows by providing up to 50% funding and access to pre-approved technology vendors. This initiative aligns with the government's broader strategy for business innovation, such as the Industry Transformation Maps (ITMs) and Industry Digital Plans (IDPs), ensuring that SMEs stay relevant in today’s fast-paced economy. 

As the business landscape evolves, embracing tools like e-commerce platforms, supply chain software, and digital marketing solutions becomes essential for long-term sustainability.

Also Read :- How To Navigate Documentation for PSG Grant Approval?

What is PSG?

The Productivity Solutions Grant (PSG) was introduced in 2018 to mitigate the costs associated with adopting IT solutions and equipment across various industries, including retail, logistics, construction, and food services. As part of the SMEs Go Digital Programme, PSG focuses on enabling small businesses to streamline processes, automate workflows, and improve service quality.

1. Up to 50% Co-Funding

Eligible SMEs can receive up to 50% of qualifying expenses, capped at SGD 30,000 per business. This ensures businesses can invest in necessary technologies without bearing the full financial burden.

2. Sector-Specific Solutions

PSG covers a range of pre-approved IT solutions tailored to specific sectors, such as point-of-sale (POS) systems for retail and inventory tracking tools for logistics. In addition, cross-sector solutions include HR management systems, digital marketing tools, and customer relationship management (CRM) platforms​.

3. Local Vendor Collaboration

Businesses are required to work with PSG-approved vendors for solution implementation. This encourages partnerships between local providers and SMEs, fostering a robust tech ecosystem within Singapore​.

Eligibility Criteria

• The business must be registered and operational in Singapore.
• At least 30% of ownership should be held by a Singaporean citizen or Permanent Resident.
• The company’s annual revenue must not exceed SGD 100 million, or it should employ fewer than 200 employees​
• Solutions funded must be deployed within Singapore, ensuring local operations benefit from the transformation.

Aligned with National Digital Strategies

The PSG supports multiple industries through Industry Digital Plans (IDPs). For example, the retail sector can benefit from Shopify’s PSG-supported platforms to build e-commerce websites and adopt delivery services. Similarly, companies in the logistics sector can improve productivity by integrating supply chain management software​. By aligning the grant with national strategies, PSG ensures that SMEs survive and thrive in a competitive market environment.

Simple Application Process

The PSG application process has been designed to be simple:

1. Browse the GoBusiness Portal for solutions that match your business needs.
2. Contact the vendor for a quotation.
3. Log in to the Business Grants Portal and submit the required documents.
4. After the solution is deployed, the business can submit claims within 30 days of use​.

This process helps SMEs reduce administrative burdens and enables quick access to financial support.

Also Read :- Stretch PSG Grant Budget For Maximum Impact

How Does PSG Support SMEs Across Industries?

The Productivity Solutions Grant (PSG) provides customized support across various industries to encourage SMEs to adopt digital tools. These efforts are aligned with national strategies to promote long-term growth and resilience. Here’s a detailed look at how different industries benefit from PSG:

1. Retail and E-Commerce 

Retail businesses can use the PSG-supported Shopify platform to set up online stores with integrated features such as Shopify POS systems and discount automation tools. It improves in-store and online operations while helping retailers offer promotions more efficiently. Retailers adopting PSG-supported solutions experience smoother transitions from traditional to digital platforms, helping them remain relevant in today’s competitive e-commerce landscape​.

In addition, the grant offers access to inventory management systems that sync online and offline sales, ensuring retailers can monitor stock levels in real-time. SMEs that use Shopify platforms also benefit from customized delivery services tailored to Singapore’s logistics environment, ensuring fast and reliable last-mile delivery​.

Key Benefits 

• Improved operational efficiency with multi-channel POS systems.
• Streamlined order management with automated discount features.
• Better customer engagement through integrated CRM tools.
• Simplified logistics with Shopify-powered delivery services​.

2. Logistics and Supply Chain 

Logistics companies can transform their operations through ERP solutions and supply chain automation tools, funded by PSG. These solutions allow companies to track inventory in real-time, optimize delivery routes, and reduce operational delays. Advanced technologies such as automated order fulfillment systems improve service delivery and reduce costs, offering a better experience to customers​.

PSG-enabled automation ensures that logistical firms meet customer expectations for fast delivery while maintaining low operational overheads. Many logistics SMEs benefit from AI-powered route management systems, which help companies reduce fuel consumption and minimize delivery times.

Key Benefits 

• Faster deliveries through real-time inventory management.
• Reduced operational delays with automated workflows.
• Improved customer satisfaction with optimized delivery routes.

3. Digital Marketing and Social Media 

PSG helps SMEs adopt SEO tools and social media marketing platforms to increase their online visibility. Approved vendors offer a range of services, from search engine optimization to social media campaign management. These platforms allow businesses to track the performance of their campaigns, making it easier to allocate marketing budgets effectively​.

SMEs that use these tools can improve brand awareness, engage with customers, and improve their online reputation. Email marketing and SEO analytics tools also allow businesses to convert website visitors into paying customers, driving long-term growth.

Key Benefits 

• Increased brand visibility with SEO platforms.
• Better customer engagement through social media campaigns.
• Detailed performance insights with campaign analytics tools.

4. HR Management and Payroll Systems

Human resource management can be challenging for SMEs, especially those with limited staff. PSG-supported tools simplify timesheet tracking, payroll management, and staff rostering. These solutions reduce administrative burdens and ensure that HR operations are conducted efficiently, in line with government compliance requirements​.

Businesses that adopt these solutions can better manage employee shifts, track leave applications, and generate payroll automatically, reducing the chances of errors. This improves productivity and helps SMEs focus on strategic growth.

Key Benefits 

• Time savings with automated payroll systems.
• Improved compliance with integrated HR solutions.
• Improved staff management through real-time timesheet tracking.

Also Read :- Top Reasons For PSG Application Rejection and How to Fix Them?

Eligibility Criteria and Application Process

The application process for PSG is streamlined to ensure SMEs can easily access funding for digital solutions. Here’s a step-by-step breakdown:

1. Identify a Suitable Solution

Visit the GoBusiness portal to explore pre-approved solutions relevant to your sector.

2. Get a Quotation

Contact the vendor for a formal quotation of the selected solution.

3. Apply 

Use your Corppass account to log in to the portal and submit your application.

4. Claim Reimbursement

After 30 days of deploying the solution, submit the necessary documents to claim reimbursement​.

Note: Only IT solutions that are implemented locally qualify for PSG. Businesses must also meet eligibility requirements, including 30% local ownership and adherence to size limits of less than 200 employees or annual revenue below SGD 100 million​.

Cost-Effective Digital Transformation

SMEs can offset up to 50% of the cost of digital solutions, helping them adopt advanced technologies without straining their finances. This enables smaller businesses to access tools usually reserved for larger companies​. .

1. Increased Efficiency

By automating workflows, SMEs can minimize human error, improve productivity, and deliver better services. Technologies like automated payroll systems and CRM tools ensure smoother operations​.

2. Long-Term Competitiveness

With access to cutting-edge technology, SMEs can scale their operations efficiently and remain competitive in a dynamic market environment​.

Future Opportunities

Businesses with innovative IT solutions can apply to become PSG-approved vendors, opening new revenue streams by partnering with SMEs. Approved vendors benefit from the government’s push for digital transformation, gaining credibility and expanding their client base through the SMEs Go Digital Programme​.

Conclusion

The Productivity Solutions Grant (PSG) has become a cornerstone of Singapore’s efforts to digitalize SMEs and ensure their competitiveness. By offering financial support and easy access to pre-approved solutions, the PSG enables SMEs to embrace technology with minimal risk. 

Whether it’s through e-commerce platforms, automated payroll systems, or digital marketing tools, PSG provides the foundation for long-term growth and sustainability​. As businesses increasingly adopt these technologies, the PSG continues to play a pivotal role in shaping the future of Singapore’s SME landscape.