How Can Malaysian Enterprises Digitally Transform Themselves?| 13th July, 2015
Most business leaders today are looking out for a new operating model of business with the application of digital technologies. They are restructuring their operations to engage more closely with customers, employees, and the marketplace. How can Malaysian companies identify these opportunities and make the transformation successful?
One of the most admired leaders of the world, John F. Kennedy once said that those who look only to the past or present are certain to miss the future. Change is the only law of life. Even the best laid plans cannot combat its inevitability.
For centuries, businesses have moulded themselves as per market demands to survive. Today’s digital world is backed by a complicated, interdependent global economy. With the rapid incentivization of services like telecom and internet, consumers are the game changers that all businesses want to please.
Malaysia’s Digital Journey
Just like the world, digital age in Malaysia has opened up a technology landscape where traditional business models are taking a backseat, and digital technologies have taken over. Malaysia's internet bandwidth consumption in 2014, for example, has increased by more than 200 percent as compared to 2013, according to the Malaysian Internet Exchange (MyIX). The MyIX attributes this increase in demand to recent digital government initiatives, especially MCMC’s Youth Communication Package (YCP) that was introduced in 2012. The YCP has made access to quality internet affordable and easier for Malaysians especially the young internet-hungry generation. The MCMC has recorded nearly 45 million phone users by the end of 2014 with a whopping 148.5 penetration rate per inhabitant.
Most young Malaysian consumers are heavy smartphone users with internet consumption habits fueled by the explosive growth of social media and e-commerce. Most popular social media channels and online shopping domains are available on content rich websites.
The Digital Enterprise
The consumer-led growth of Malaysia’s internet reach has also led to the rise of web and mobile technologies with the country’s enterprises.
According to the national Information & Communications Technology (ICT) agency Multimedia
Development Corporation (MDeC), Malaysia's Digital Malaysia initiative has established the national digital economy at a good position with the ICT sector and is already contributing to 12 percent of the Gross Domestic Product [GDP].
It is no surprise therefore that Gartner reports Malaysia's IT spending will reach MYR 65.1 (US$17.56) billion in 2015, a good 7.5 percent higher than last year. Malaysia’s enterprise IT growth comes in a dark contrast to worldwide IT spending that will decline by 1.3 percent mainly to the rising U.S. dollar price. IDC also predicts that Malaysia's big data market is set to grow to RM75 [US$21.43] million. Especially as MDeC recently spoke of increasing the number of local data scientists from the current 80 to 1,500 by the year 2020.
Taking the Big Step Forward
Enterprise Digital Transformation (DX) adoption is gaining immense popularity. According to this year’s IDC CIO Predictions, 80 percent of the CIO’s time will be focused on analytics, cybersecurity and creating new revenue streams through digital services by 2017. About 98 percent of all investment in ICT in 2015–2018 will be in the four pillars of the 3rd Platform — cloud, mobility, social, and Big Data/Analytics. But many Malaysian businesses are yet to embark on this transformative journey. Most CXOs are plagued with fears that range from company wide buy-ins to re-skilling needs.
Here’s a step-by-step approach prescribed by IDC to digitally transform your enterprise :
- Seek out consultants to work out your strategy. With so many potential areas to address, it is necessary to determine what to focus on. This suggests an audit and the identification of priorities, and lends itself to a consulting project of some type. The challenge lies in keeping it simple and to avoid the urge to create a large, complex plan. You must ensure a good mix of "quick wins" keeping long-term objectives in view.
- Develop a plan. Enterprise-wide transformation is a very substantial exercise indeed that cannot take place overnight. A strong transformation plan fleshes out the range of challenges that an IT teams will face in bringing about the required changes.
- Choose partners to help you on the journey. Look out for an able service provider who can understand your legacy needs and yet, help you on achieving the vision of what you want to achieve in the future. This vision needs to embrace not just your infrastructure limitations, but also open up opportunities with both your customers and partners.
- Focus on the areas that matter most to your business. No two service providers are the same in terms of the markets in which they compete, the customers they serve, or the nature of their business. Hence it is not possible to identify a generic "right" transformational path to follow. To make a start we recommend developing a roadmap with trusted suppliers to focus on the areas that matter most to your business.
- Invest in true transformation. A transformation success is not just the result of a cost cutting program. An enterprise’s willingness to invest in continuous improvement and the full commitment of the whole organization to make it real is also important. So creating the right culture where transformation can take root is a key enabler.
IDC has also developed the DX MaturityScape to help Malaysian business and IT leaders understand and cope with the challenges and opportunities that it will bring. The new research provides a framework for developing coherent, forward-looking strategies and plans that optimize the ability of leadership to digitally transform business practices including customer experience, information management, operating models and workforce management. We will discuss in detail about how organizations can exploit maturity models to chart out fool-proof plans on their DX journeys.