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Go digital to engage millennial talent: experts
- Ben Bensaou, dean of Executive Education, Insead
- Adrian Tan, partner and industry lead, Technology, Media and Telecommunications Group, RSM Singapore
- Puneet Arora, CEO for the Philippines, Singapore and Thailand, GroupM
Moderator: Vivien Shiao, Editor, The SME Magazine, The Business Times
WITH the rapid pace of technological advances, enterprises of today have little option but to keep up or ship out.
But for businesses that decide to invest in digitalisation, many have come to see how they can improve productivity, scale up and even internationalise.
BT talks to three industry leaders to find out how businesses can go digital successfully.
Why is going digital the way forward for companies?
Ben Bensaou: Rapid developments in technology are enabling companies to operate at a larger scale and deliver new capabilities, services and value - all at a much faster speed. In turn, customer expectations are also evolving. Increasingly, customers demand quicker responses and experiences tailored to their individual needs. By drawing on smart technologies such as machine learning and big data, SMEs are better able to create these highly personalised experiences, thus creating more value and helping to drive profitable growth.
Digital technologies and customer-centricity also go hand in hand with changing workforce expectations. Younger generations are quick to understand and adopt new technologies, and they expect their workplace to share their digital mindset. To attract and retain talent from this generation, companies must create a digital workplace - one that offers tools and features such as videoconferencing facilities, online communication platforms and social media networks. If companies don't embrace this digital way of working, they may find it harder to meet their talent needs.
Adrian Tan: We must first define what digitalisation is, because different people have different interpretations of this concept. To understand digitalisation, we must also first define what digitisation is.
In short, digitisation refers to the conversion of information from analogue to digital form. In the context of business application, it means to use digital technologies to achieve digitisation with the objective of transforming the business model, changing the mode of engagement with employees and customers, and creating new revenue opportunities.
In today's environment, going digital or transforming into a digital business is essential to enable future growth. Competitive advantages you can derive include:
- Ability to create new products and services,
- Improved process efficiency such as through robotics process automation,
- Improved accessibility of information and real-time monitoring,
- Use of data analytics to identify trends and perform predictions,
- Enhanced customer service by decreasing response time, and
- Engaged talents (especially millennials).
Puneet Arora: We live in a 'digital first' world where digitisation and its effect are now reaching and reshaping in every aspect of our daily lives and how we do business.
With the emergence of a new generation of smart phones, which come equipped with facial recognition, augmented reality and artificial intelligence, this has opened a new channel for communication through various applications. For companies, this means going beyond understanding how many devices each consumer possesses, and what technology one works with. It is a matter of how these technologies and devices when put together will drive improvements to business efficiencies and in providing a differentiated digital customer experience to their customers.
With connectivity, consumers have higher expectations in customer service. Organisations must demonstrate agility and provide real-time support 24/7. Services such as customer service has evolved from tele-support to real-time messaging.
With data, we are now able to have more in-depth and personalised communications with them. Not only can we understand their demographic profiles, but we can also understand and predict their psychographic behaviours by analysing large data streams.
Organisations should be in tune with this trend of digitisation to improve customer experiences with their business to continue to grow.
Why are SMEs reluctant to embark on digitalisation, and how can they go digital with limited resources?
Ben: Most SMEs understand that they must invest time and money in new technology, but they often face cultural barriers to change, such as ingrained structures and processes. Many SMEs also lack the resources that large enterprises use to help them decide where to invest, making investing more risky.
Given their limited resources, it makes sense for SMEs to digitalise by becoming part of a broader ecosystem. By learning to work with digital giants like Amazon, Google and Facebook, SMEs can get access to the technology they need.
SMEs should also partner with agile digital startups - they can help SMEs sell products, leverage social networks, expand their customer base, and design new products and ways of engaging with customers. Through such partnerships, SMEs can also experience first-hand the culture of experimentation needed for digital transformation.
Adrian: Broadly, for SMEs, the reluctance to embark on digitalisation usually stems from the lack of corporate vision or management buy-in, insufficient budget, unawareness of what is possible, unfamiliarity with technology, and the view that it is not a priority.
But we see SMEs gradually awakening to the importance of digitalisation. This could be due to the government's efforts - supporting SMEs to go digital is one of the seven strategies raised by the Committee on the Future Economy.
SMEs should explore how they can tap the government's initiatives to deploy digital solutions and build deep capabilities in this area. Certain measures announced in the recent Singapore 2018 Budget should be considered, including the enhanced deduction for R&D activities, the Enterprise Development Grant, Productivity Solutions Grant, and Open Innovation Programme.
Puneet: SMEs understand the need and importance for them to embark on digitalisation. There are however a few key factors which often hinder their adoption of new technologies.
Firstly, business decision makers at SMEs often do not have a deep understanding of new technologies which can help drive their business. This lack of understanding is often what hinders adoption. In addition to this, they lack the relevant talent within their organisations to lead them forward in these developments.
There is also an inertia towards making cultural and mindset changes among the traditional Singaporean-run businesses. They are used to the traditional way of doing things and whilst they understand the need to adopt technology, they have been slower to confront technology even when consumers are doing so.
SMEs also have the challenge of up-skilling and re-skilling existing talent to ensure their businesses keep up with consumer demand and for their talent to stay relevant in the industry as more manual jobs are taken over by technology.
All these challenges are not easy to overcome from the stand-point of time and resources. As a start, they will have to consider piloting small initiatives to relook their operation processes to identify ways to future-proof their business.
What can employers do to encourage digitalisation in the workplace?
Ben: Business leaders can remove the barriers to digitalisation by encouraging their people to adopt a creative mindset, using digital tools to experiment with new ways of doing their job. It's about fostering an experimental, innovation-oriented workplace that is open to new ideas and finding out what works - as well as what doesn't.
Start with small experiments in different areas and see what works. Older employees may be reluctant to change, so SMEs should encourage their younger workers to share their knowledge and nurture interest.
By giving people permission to play with technology, time to pursue creative solutions and resources to bring their ideas to life, the digital transformation journey can quickly be demystified - and begin making more of an impact to an SME's bottom line.
Adrian: The disruptive power of digitalisation is well publicised and its effect is pervasive. Employers are beginning to realise what had worked well in the past may not work now. Many are also discovering that digitalisation is not simply about being technologically savvy. It is about creating an agile organisation and adopting a self-transforming structure to succeed in the future. To create such a self-transforming culture, employers need to encourage staff to think of creative solutions to their problems, imagine what is possible, and be willing to allow for experiments and failures.
Of course, one should not encourage experiment for experiment's sake. The efforts undertaken could be directed at areas such as new business models, new services, customer engagement, and operational efficiency. To this end, areas of technology that companies can explore could include robotics process automation, data analytics and artificial intelligence.
In short, employers can orchestrate the transformation by empowering people and creating an innovative culture.
Puneet: The leadership team within the workplace has to be seen to embrace and drive digitalisation for the business. They will need to lead by example and with passion, embedding within its organisational culture and business set-up, a strong focus on technological enhancements to deliver business growth.
As an example, in our business of media which Wavemaker operates in, we drive and deliver an agenda for technology, by identifying specialised talent to help drive digitalisation with management. We make them responsible for driving various digital product & service offerings to our clients, for us to stay competitive and in turn build our own internal research & development.
In the same respect, leadership teams across organisations need to set-up and identify individuals with specialisations in the area of technology know hows to co-deliver adoption with them and invest in their talent through constant upgrading and training.
What are some of the challenges SMEs face when going digital and how can they overcome them?
Ben: One challenge is grasping the extent of the organisational changes that may be required when embarking on a digital transformation journey. For example, many SMEs often work within silos that detract from their ability to gain the 360-degree view of their customers that is required to produce personalised experiences. To meet this challenge, business leaders need to reorganise their internal operations to foster cross-collaboration across every aspect of the organisation - from HR to logistics, sales to design.
Most importantly, SMES must ensure that any digitalisation they embark on is customer-driven. Because today's customers are in the driver's seat when it comes to their interactions with brands, SMEs must create positive and relevant customer experiences across all channels and touch points. That is what should drive any digital transformation strategy. If improving the customer experience is not the central focus, digitalisation simply will not produce the desired results.
Adrian: Digital transformation is a mindset. For example, in the audit and consulting services industry, do firms continue to see themselves as accounting/advisory service providers, or do they visualise themselves as technology firms that provide professional services? A shift in attitude is required.
Next, there is a general perception that digital transformation is complex and an ongoing process that will change as technology evolves. Therefore, many do not know where to begin. To overcome this, SMEs can consider taking small steps, such as getting your CIO to work with each business unit to explore how processes, methods of engagement and products and services can be transformed.
Many of our clients also told us that security is a major concern. Cybersecurity is fast-changing and many businesses think they are not equipped for cyberattacks. For a start, an IT security health check can be a cost-effective, yet important, first step.
Lastly, a key challenge is the digital skills gap. Upskilling therefore has become a buzzword, and employers have a role in getting that message across to their people. In Singapore, there are a number of initiatives that help to alleviate the costs of upskilling, including Professional Conversion Programmes and SkillsFuture Credit.
In total, the challenges are very much people-related. Companies that are able to create an innovative culture through experiments and a willingness to accept failure, and provide opportunities for employees to upskill, will be better poised to meet the challenges of technological disruption that is already happening.
Puneet: One of the primary challenges is with the lack of talent. Historically, we have lacked local digital talent and a reliance on foreign talents. Strict employment quotas however mean that this is not a sustainable, long-term solution.
While our digital talent pool has been growing, this has not grown fast enough to meet demand. In addition, when staff can be found, companies are finding that wage expectations are high due to the growing demand which in turn hurts overall operating & HR cost.
To overcome this lack of relevant talent and higher operating costs, the near term solution is to look at automating processes Streamlining processes wherever possible can help to reduce manpower and create more efficiencies for their organisation. SMEs will have to look for innovative ways to do this at all levels including front of shop and back office tasks.