Over the past three years, the pandemic has acted as the catalyst for the growth of digital transformation across Asian businesses since the onset of the pandemic.
At first, I felt several companies seemed to hold back and perhaps wanted to gain a better understanding
of what would happen. Once it was clear that COVID-19 was an issue with long-term implications, more organisations began investing heavily in digital transformation.
Companies also invested in building digital products to help their business not only survive but also grow and prosper. I felt this was particularly prevalent among retail businesses and restaurants that needed to reach their customers online through e-commerce and home delivery.
Cost optimisation is of the utmost importance in difficult times such as these. Improving internal processes and efficiency through digital transformation is an excellent way to improve margins and save on costs. This is vital in light of the likelihood of a general downturn or global economic recession.
I believe the demand for hybrid and remote working forced businesses to properly evaluate their working methods once COVID-19 set in. Introducing the correct digital tools and products to be able to collaborate effectively online during the pandemic through online meetings, collaborations, and communication was essential to this.
A global survey found that 97 per cent of respondents felt the outbreak of COVID-19 sped up digital transformation processes in their respective organisations either ‘somewhat’ or ‘a great deal’. Every organisation needs to be able to work with technology if they are to survive. If used successfully, it can improve processes as well as increase revenue and productivity.
I think that SMEs need to decide initially what path their organisation needs to take before investing
in the appropriate team to help build the correct digital solutions. It is very important to understand what you need to build, as opposed to only focusing on what you want to build. As well as needing capabilities to work with tech partners, organisations need to understand how to maximise value through this relationship.
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A 2020 survey of small and medium-sized businesses in the Asia Pacific region found a shortage of digital skills and talent within their company was the leading challenge in digital transformation. This was followed by a lack of necessary technologies to enable digital transformation and a lack of budget/commitment from management.
I believe that tech transformation involves two choices: develop your own tech team or work with an external partner. Building an in-house tech team poses opportunities such as quality assurance, maintenance and support.
Building high-quality digital products are complex, so an organisation needs to have strong senior resources in place in tandem with a robust software management team to build out its capabilities. Its challenges include financial and time investment as well as meeting training needs as appropriate. Hiring top tech talent can also prove difficult if an organisation is non-tech in nature.
Conversely, organisations need to be able to work efficiently with external tech partners to help solve their digital transformation challenges and build digital products, bringing their business online. I certainly think an in-house product owner is essential to act as a bridge between the business and the tech team. They are also needed to help prioritise the work that needs to be done so that value is delivered quickly in an economic sense.
Trends
We are always on the lookout for new breakthroughs and new technologies and evaluating whether we should be investing in certain areas. But as a company, we are careful not to just shift our strategy towards whatever the newest trend is.
If a new tool can solve a specific problem, we’re open to implementing it as part of our tech stack. But at the moment, some new tools claim to be wide-ranging solutions, but they’re not solving a real-world problem.
We don’t believe in enforcing a “new” solution upon our clients without any real rationale because it’s increasing complexity, it’s usually increasing price, it’s difficult to maintain, and again, there’s usually a simpler solution already out there.
Take some of the most talked-about new technologies out there at the moment:
- Cryptocurrency: It seems to me that crypto and NFTs have reached their peak and are really on their way back down now. As for blockchain, there is a technology that is there, but it’s looking for a problem to solve as opposed to being a solution itself. It’s good that there is a lot of experimentation going on in this area, but I’m yet to see any sort of “real-life” problem that is being solved by blockchain applications.
- Cloud computing: A lot is happening in cloud-native solutions now; in fact, I can’t recall the last time we discussed anything happening “on-premises” everything we do is stored in the cloud, one way or another. It’s safer, it’s more scalable, and it’s even cheaper than hosting things yourself in most scenarios, so I think we’re going to see a lot of innovation in this area in the next few years.
- Artificial Intelligence: AI is getting a lot of attention right now, particularly the GPT3 model. Interestingly, the model can learn, reply and provide, but I must say what I’ve seen so far hasn’t always been factually correct. So the potential applications for this new branch of AI are very strong, but there are still some challenges to be overcome.
Foundation, adoption, and acceleration
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) published its Asia-Pacific Digital Transformation Report earlier this year. It attempts to gain a better understanding of how quickly digital transformation was achieved by governments, businesses and individuals due to the adverse impact of COVID-19.
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The report stresses the critical need for stakeholders and policymakers to closely monitor digital transformation both locally and nationally and the importance of policy coordination and action. ESCAP has created a digital transformation framework to encompass the three different stages of transformation. These are foundation, adoption and acceleration.
The report also found that investment by the mobile industry in services, infrastructure and other innovations in Asia and the Pacific was valued at $400 billion over the past five years, greatly influencing the digital revolution. 94 per cent of the population in the Asia-Pacific region is now covered by mobile broadband.
A recent report by Google, Temasek and Bain & Company shows how digitisation is driving
real change. The economies the report covers are Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. It predicts that Southeast Asia’s digital economy is forecast to hit $200 billion by the end of 2022.
What is perhaps most staggering about this figure is that it has been reached three years earlier than had previously been anticipated in an inaugural report published in 2016.
I believe the digital trends we can expect to see in 2023 will involve innovations that currently exist but will be developed further. These will almost certainly include cloud computing, AI, blockchain and super-fast networks such as 5G.
Solutions for remote, augmented and hybrid working, which became such an issue due to COVID-19, will continue to be at the forefront of the list of priorities for many organisations. As the economic recovery
continues in Asia, I certainly cannot see growth in the main digital sectors of travel, e-commerce, online media, food & transport and DFS (digital financial services) slowing down anytime soon.
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