FoodXervices Inc: Recasting the Image of a Traditional SME through Digital Transformation

FoodXervices Inc, a business supplying dry goods to F&B establishments and street hawkers in Singapore, traced its roots to a small wholesale shop, Ng Chye Mong (NCM), founded by Ng Lim Song in 1939 in Singapore. In 2021, it was being run by Ng’s granddaughter and Managing Director, Nichol Ng, who had embarked on a high-stakes digital transformation journey to progressively digitise all aspects of the business operations for efficiency and productivity.

“I had no intention of joining the business, and neither was there a plan for any of the younger generation to join. Our family’s finances were in bad shape after the bankruptcy [brought on by the 1997 Asian Financial Crisis], and a salaried job was what I needed back then,” commented Nichol, who joined the business in 2002 to help her father. She added, “Human interfacing in the procurement process was believed to be a cause of many unintentional and intentional lapses that affected business profitability, hence hotels and big F&B businesses started digitising rapidly. So as a supplier, as much as my dad wanted to digitise the company, he was also pushed by customer requirements. He needed a younger person to be his sidekick in the digitisation project, and he asked me to join.”

Nichol took it upon herself to set the house in order. She sat down and created a list of codes of customers and products. Then, she did the entire data entry work, from creating and keying in the codes for different stock keeping units (SKUs) of the various products to classifying the customers and keying in their details.

On the need to do everything from scratch and by herself, she explained, “We were a small business and had no budget, and still paying off our family debt. Hence, we could not exclusively hire someone to handle the digitisation process… I felt that an outsider would not understand our business as well as I did; they would not know the nuances of the trade, and differences among the customer segments.”

Staff were taught how to use computers and Microsoft Office software, starting from the basics. In 2005, NCM also became one of the first few SMEs in the Singapore food industry to have a corporate website. Email addresses were created for the staff, and they were trained to draft, digitally sign, send, and receive emails. Nichol looked for an Enterprise Resource Planning software that could manage, integrate, and automate business processes and collate, analyse, as well as run reports from multiple systems and departments of the company.

After witnessing the prowess of digitalisation and the new capabilities that it could usher, Nichol did not want to stop at merely computerising the business and digitising its core processes. She wanted to reinvent and rejuvenate the family business, which she felt was still being run traditionally. In 2007, she bought out NCM from her uncles to avoid family interference in her business decisions.

After the acquisition, Nichol set up a new private limited entity, FoodXervices Inc, to continue the legacy of her grandfather. The name change was necessary to reflect Nichol’s fresh and modern approach to doing the food business. The ‘X’ in ‘FoodXervices Inc’, according to Nichol, represented the all-encompassing nature of the food business that the company was becoming. It was a fresh start by every measure; employees were given a choice to stay or leave the new entity, and almost all of them stayed and were issued new employment contracts. Likewise, most customers and suppliers came on board the new company. On the new identity, Nichol commented, “We value our legacy. At the same time, we want our business name to be meaningful and relevant. It should be able to convey our modernity and connect with all our customers. So we decided to drop the Chinese name.”

When the COVID-19 pandemic struck, it disrupted all the conventional norms of interactions in the physical living environment. As a result, many businesses, particularly F&B, folded. FoodXervices Inc was also hit in terms of revenue, but the business continuity brought about by its digital infrastructure helped the company to mitigate the impact. The investments in digital assets paid off by fortifying its pandemic preparedness; staff could seamlessly continue to work from their homes, the business could segue into the retail consumer segment, and operations ran with minimal onsite staff and physical interactions.

After all that hard work and investments, FoodXervices Inc had etched an image as a forward-looking and dynamic digital leader in the industry. Having built a digital infrastructure to meet the needs of the business, Nichol wanted to adopt digital applications that could bring cross-industry synergies and further expand the horizons of FoodXervices Inc beyond the food industry. How could she derive more value from the investments made towards the digital transformation of FoodXervices Inc? 

Written by Dr Gary Pan, SMU Professor of Accounting (Education); Benjamin Lee, SMU Lecturer of Accounting and Lakshmi Appasamy, Case Writer at The Centre for Management Practice (CMP) at SMU, this case study analyses the ways to overcome the typical challenges faced by SMEs in digital transformation. The case study also examines how a company could foster a data-driven culture to improve business metrics, adopt digital analytics to derive value from digital transformation, and seek alternative sources of growth and innovation through digital transformation.

To read the case in full, please visit the CMP website by clicking here.