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Businesses wise up to importance of digitalisation, says study
BUSINESS leaders in Asia Pacific are showing an urgency in embracing the Fourth Industrial Revolution, with 80 per cent of them believing that they need to transform into a digital business to enable future growth.
Despite this, only 29 per cent said that they have a comprehensive digital strategy in place, according to the Microsoft Asia Digital Transformation Study which sought to understand how business leaders are embracing the digital era.
Technology advancements have ushered in the Fourth Industrial Revolution, where cutting-edge technologies such as Internet of Things (IoT), artificial intelligence (AI), advanced data analytics, and mixed reality are powered by cloud computing to create possibilities in transforming the way people work, live and play. This revolution, together with rapid urbanisation, emergence of the millennial workforce and a fragile global economic climate, is in ushering societal and economic changes at an unprecedented pace, the study noted.
The Microsoft study surveyed 1,494 business leaders from Asia Pacific working in organisations with more than 250 employees from 13 Asia Pacific markets: Australia, China, Hong Kong, Indonesia, India, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan and Thailand. All respondents were pre-qualified as being involved in shaping their organisations' digital strategy.
Cloud computing and the decreasing cost of devices have made it more affordable for companies of any size to transform digitally, according to 81 per cent of business leaders surveyed. A majority of business leaders (78 per cent) regarded cloud computing as essential in their digital transformation strategy.
The study showed that even as majority of business leaders are aware of the need to transform digitally to address the changing business climate, the transformation journey for most organisations in Asia was still at its infancy. Only 29 per cent of business leaders have a full digital transformation strategy and less than half (49 per cent) are in progress with specific digital transformation initiatives for selected parts of their business. Only 22 per cent still have very limited or no strategy in place.
Microsoft has defined what it means to transform through four key pillars:
- Engage customers: Consumers are savvier than ever before, with access to data ensuring they are often educated on a product or service before engaging. To stand out, organisations will need to deliver a new wave of deeply contextual and personalised experiences, while balancing security and user trust.
- Empower employees: The nature of how we work - and the workplace itself - has undergone a dramatic evolution. Organisations can empower their people and help them do their jobs better with the power of mobility, which allows employees to collaborate from anywhere, on any device, and access apps and data they need, while mitigating security risks.
- Optimise operations: Technology disrupters such as IoT are accelerating the potential for businesses to optimise their operations. This can be done by gathering data across a wide, dispersed set of endpoints, drawing insights through advanced analytics, and then applying the learning to introduce improvements on a continuous basis. Organisations in manufacturing, retail, and even healthcare can shift from merely reacting to events to respond in real time, or even pre-emptively anticipating and solving customer issues.
- Transform products and business models: The opportunity to embed software and technology directly into products and services is evolving how organisations deliver value, enabling new business models, and disrupting established markets.
Business leaders in Asia Pacific are interested to explore a range of emerging technologies to accelerate and achieve digital transformation. The top five technologies identified by business leaders as being relevant to them are:
- Artificial intelligence (AI): Intelligent machines or software that are able to learn and perform tasks independently. Examples include robots, chatbots and self-driving cars;
- Internet of Things (IoT): Network of sensors embedded into devices that can collect data or be remotely controlled. Examples include smart buildings, cars and home devices;
- Wearable technologies: Advanced computing and electronic technologies that are embedded into clothing, devices or bodies. Examples include smart watches and fitness trackers;
- Quantum computing: Next-generation computers using different computation systems to solve data equations much faster than traditional computers;
- Virtual/augmented/mixed reality: Technologies enabling the merging of real and virtual worlds into new and immersive experiences. Examples include Microsoft HoloLens, Oculus Rift, and 3D video gaming.
The survey noted that while there was no doubt that digital transformation would bring significant benefits for both businesses and employees, the path to digital transformation has been slow, given that only 29 per cent have a full digital strategy in place.
According to business leaders in the study, the top barriers to digital transformation were, in order of priority:
- Cyber threats and security concerns, as well as lack of digitally skilled workforce;
- Lack of supporting government policies and ICT (infocomm technology) infrastructure;
- Uncertain economic environment as well as lack of organisational leadership skills.
The survey noted that increasing security threats in today's digital economies were real and could not be ignored. There is a continued perception among business leaders that the cloud is less secure. However, they may be less privy to the advances being made in the cloud on security and privacy, and need more exposure on how, with the current threat environment, it would be safer being in the cloud than relying on traditional forms of IT, the survey added. A recent Microsoft Asia Pacific survey of 1,200 IT leaders conducted in September 2016 found that 87 per cent believe that in the longer term, the cloud will be safer.
Ralph Haupter, president, Microsoft Asia, said people don't use technology that they don't trust. This is a golden rule that applies to organisations and individuals alike as we live in a mobile-first and cloud-first world.
"Ensuring security, privacy, and compliance are key to enabling businesses to carry out digital transformation with confidence. With the rise of mobile workers introducing new devices, apps, and data into organisations today, protecting sensitive company data requires a new and integrated approach, all of which we have invested in significantly," he added.