ICV Voucher for Singapore SMEs

What is the purpose of the grant?

The Innovation and Capability Voucher (“ICV voucher”) was introduced in June 2012 to help Small and Medium Enterprises (“SMEs”) cope with the rising labor cost by increasing productivity and improving their capabilities. The increased revenue would help SMEs maintain their profit margins.

The government set a budget of SGD 32 million to be utilized over four years (Year 2012 – 2016). In 2014, an additional SGD10m was earmarked in the budget for this scheme. Initially, ICV vouchers could only be used to engage consultancy services. However, based on SMEs’ feedback, SPRING Singapore enhanced the existing scheme to include solution implementations in 2014.

Why should I claim my ICV Vouchers?

ICV vouchers are a good starting point for SMEs to be exposed to consultancy services or integrated solutions. Based on the current scheme, all qualified local enterprises would be given eight vouchers valued at SGD5,000 each. These vouchers can be used for projects in selected areas including consultancy projects and integrated solutions.

Consultancy solutions are classified into four categories, namely financial management, innovation, productivity and human resources. Some of the popular services include financial planning, customer insights, intellectual property and ISO certification. The full list of consulting services is available here.

There are various integrated solutions provided under the ICV scheme. Some of the more popular solutions include appointment scheduling and booking system, document management system, point-of-sales system and restaurant wireless paging system. The full list of integrated solutions is available here.

How do I qualify for ICV vouchers?

All local enterprises that are registered and operating in Singapore can apply for ICV vouchers if they meet the following criteria:

  • At least 30% local shareholding
  • EITHER Group annual revenue of SGD100m and below OR 200 employees and below

Things to note about the ICV scheme

ICV vouchers allow you to claim 100% of the project cost, if below SGD5,000

SMEs are allowed to claim the full amount of the ICV voucher. The Productivity and Innovation Grant (“PIC”) and Capability Development Grant (“CDG”) only allow SMEs to claim 40% (for cash claims) and 70% of project value respectively. On the contrary, you will have no cash outlay if your project or solution costs less than SGD5,000.

There will be no risk of non-approval as all projects will be pre-approved before the start of the engagement . Unlike PIC, clients will have certainty on whether the project is claimable.

The vouchers have an absolute value of SGD5,000 each

There could be cases whereby the local enterprise would seek a project of a bigger scope. In that case, the project fees could exceed SGD5,000. This excess would have to be borne by the SME. On the other hand, there will also be no refund/rebate for projects below SGD5,000. In a nutshell, a voucher can only be used once, regardless of the project value.

SMEs can only engage accredited service providers for consultancy and integrated solution projects

To ensure that your projects are handled by experienced providers, SPRING Singapore has pre-qualified a list of service providers/consultants. However, the project scope is determined through discussions between you and the providers.

Each SME will only have eight vouchers

Every local enterprise that meets the qualifying criteria only has eight ICV vouchers in the whole life of the company. You can only use two vouchers for each category. Hence, it is advised that you use these vouchers wisely and only in areas with real business needs. Also, we advise you to be selective with the service providers. While all service providers follow the standard scope provided by SPRING Singapore, the methodology and depth could differ.

Two or more ICV vouchers can be used for each consultant

The benefit of using the same consultant for different projects is continuity. While you can engage the same consultant with two or more vouchers, it has to be scoped in phases. In fact, each SME can only use one ICV voucher at any one point in time until the phase is completed.

ICV vouchers can be used to test the suitability of engaged consultants

SPRING Singapore views ICV vouchers as a stepping stone for SMEs to try out consultancy engagement. Its intention is to push SMEs to engage consultants for a bigger project scope under CDG. As one consultant put it, ICV vouchers are for sampling a consultant’s service. After you are satisfied and comfortable with this consultant, then you can proceed to a bigger project that can be claimed under CDG.

ICV vouchers can be used for up to two years of an integrated solution subscription

For integrated solutions, an ICV voucher can cover onboarding services, customization, related training, certain hardware and up to two years of subscription. The supportable component differs between solutions.

Speed of approval varies

While it is stated that the estimated approval process will take six weeks, the speed of approval varies. It can take as little as two days and as long as a few months. The approval is processed by a small group of experts engaged by SPRING Singapore, and they determine the speed of the process.

Project length has to be less than six months

The prescribed length of each project is a maximum of six months. Typically, most consultants will finish the project within one to two months. If you need an extension on the project, you will need to appeal through SPRING Singapore.

How can Olea help you?

Olea Private Limited, a sister company of Excide, is a boutique consulting firm founded in 2011. It is accredited by SPRING Singapore to provide financial advisory services under Innovation and Capability Voucher (“ICV”) scheme. Over the years, Olea has served over 30 clients under the ICV scheme.

In the scheme, you would be able to obtain a financial model tailored to your organization. If you are interested in getting more details, please feel free to email Sam at [email protected] / [email protected] or call at 96981755.

Projects that can be covered under the ICV scheme include:

  1. Financial assessment and planning for growth: To assist SMEs chart out and validate their financial needs, given their business expansion plans

  2. Planning and budgeting: To assist SME structure and implement proper planning and budgeting practices in managing overall financial resources

  3. Cash flow and working capital management: To assist SME to identify, assess and address gaps in cash-flow and working capital management

Founding Story: JIT Holdings

Humble beginnings

JIT Holdings Ltd (JIT) was founded in 1987 by Tommie Goh and William Goh. It started out as a trading firm dealing with Printed Circuit Boards (PCI) components. Business was difficult as it required them to conduct face to face selling of their various principal’s products. Hours were long and traveling across the Singapore Island was extensive. William Goh would clock an average work day of more than 12 hours and an average mileage of more than 100,000km a year. This would include making deliveries in the company van while wearing a tie.

JIT was fortunate to experience substantial business in the first year. A large majority was ploughed back into the company and the two directors took only a subsistence salary. JIT invested these retained earnings into a factory that did contract manufacturing and assembly of electronic components in a communal office in the Jurong. In order to cut cost, the directors did the internal renovations by hand where possible including painting the factory themselves. When overtime by the staff was needed, they would personally fetch and return them to their respective homes.

Becoming a global powerhouse

Business steadily improved and soon they were running operations around the clock. Finished goods manufactured at night would often be placed in the common walkway and the service elevators. It got to a point where the finished goods were placed in front of other company’s main entrance which incurred numerous complaints and safety hazard warnings. This served as the impetus to construct their buildings in Kallang and Changi, with the latter being the headquarters.

Due to their reliability and efficiency, many Original Equipment Manufacturers (OEMs) outsourced most, if not all, of their manufacturing operations to JIT. At JIT’s peak, they were manufacturing 100% of Motorola’s cellular phones globally. In addition, they were the largest contract manufacturer for HP worldwide. Their good reputation and work ethics would put them in good stead for the rest of the company’s lifespan.

This astronomical growth saw JIT’s revenue of $100,000 in its first year of business grow to exceed the $100 million milestone within three short years. In addition to being the number 1 contract manufacturer in Singapore, JIT Holdings attained a global ranking of 17th of top global CEM providers with 4,500 employees and operations in China, Hungary, Indonesia, Malaysia, and Singapore.

Sale to Flextronics

Flextronics acquired JIT for SGD1 billion in a share swap. Through this deal, Flextronics hoped to expand its manufacturing capabilities in Northern China (Tianjin and Shanghai) to cater to the nation’s nascent and fast growing technology sector, large engineering talent and be closer to the customer. This would complement their existing operations in Southern China. In addition, Flextronics would also expand their geographical presence in the ASEAN region with JIT’s factories in Malaysia and Singapore. Lastly, the acquisition would allow Flextronics would expand their customer base. In November 2000, the acquisition of JIT by fellow CEM Flextronics was finalized and this marked the end of JIT Holdings.

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Excide is a boutique consulting house founded in 2015 serving small businesses and start-ups in Singapore. Excide performs the role of a CFO at a fraction of their salary. This means that small businesses are able to afford the services that are commonly adopted by larger organizations. Through our consultancy business, we have gained insights from the best and brightest across all industries.

We believe that these insights will come in useful to many and hence, we have decided to start this blog. We will be posting regularly, sharing founders’ stories, featuring startups, and posting useful tools and resources.

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