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Traversing the world of change
TO say the current business environment is highly ambiguous and complex is hardly an understatement. Compounding this is the fact that change and disruption are happening at an increasingly accelerated pace. Where there were once economies limited by geography, the global economy today boasts of far-bigger opportunities and threats that one might have imagined just a decade ago. With uncertainty in the topline due to a volatile economy, businesses are now focusing on productivity to increase profitability in the bottomline. And with this focus, they are starting to turn to operational data to provide them with insight.
The use of data is fast rising in prominence, according to an Ernst & Young (EY) survey: 81 per cent of the surveyed executives believed that data should be at the heart of all decision-making. Yet, 99.5 per cent of data collected is never analysed, as reported by the MIT Technology Review. Ironically, external parties appear to value business data as much as, if not more, than business executives themselves. Businesses are being targeted for their data and there was a marked increase in cyberattacks in 2015 compared to 2014. This trend is expected to continue. Given the current state of affairs, how a business decides what to invest in - whether to protect against risks or turn risks into opportunities - is the million-dollar question.
GOING BACK TO BASICS
With cost prudence comes the opportunity to raise productivity and create more value. Take the manufacturing sector, for example. As new technologies flood the manufacturing market, it is easy to see why some businesses want to buy the newest machines in hopes of raising productivity. However, with capital expenditures decreasing due to tight budgets, it is now important that businesses learn to sweat their assets to get more bang for their buck.
And while new technology does help, going back to the basics of having proper workflows and processes in place can bring about large improvements to productivity with marginal investment.
GETTING SMARTER WITH ANALYTICS
Not only are businesses endeavouring to do things more efficiently but they are also working more effectively to delight their customers. Being able to understand the needs and wants of the customer is key to surviving in the long run. And now, through analytics, businesses have access to better ways of understanding customer behaviours.
From understanding customer demand to better production planning and reduction in stock-outs to gaining deeper insights into how customers really feel about the product, analytics has risen to a whole new level of business utility and intelligence.
Yet, while many businesses have increased their capacity to "produce" analytics-driven insights, many are still not maximising returns on their analytics investments. Ultimately, value is realised only when people make different decisions and change business processes for the better, and that is often where gaps exist.
PROTECTING ASSETS WITH CYBERSECURITY
In the 2015 EY Global Information Security Survey, 88 per cent of respondents did not believe that their information security fully met business needs.
There was an increased desire and burden of managing not only the information technology infrastructure, but also the operational technology infrastructure as well. As systems get more connected, the threat of a cyberattack exponentially increases.
Businesses will want to ensure that they are not only putting in the standard controls such as firewalls and passwords, but also shifting to a mode of "active defence", which involves a targeted prioritisation of assets, people and business areas to protect, given that resources and budgets are finite. Businesses must also involve their people and understand that even the best detection systems are useless if they are not utilised or understood by employees on the ground.
VIGILANCE FOR TOMORROW
Fully comprehending the key themes of productivity, analytics and cybersecurity - and their interdependencies - and embedding these within the company's strategy is crucial. Companies are recognising this, based on our experience with increasing client demands for business transformation strategy, cybersecurity, analytics and manufacturing capabilities. Our four newly opened Centres of Excellence in Singapore for Advisory, Analytics, Cyber Security and Manufacturing are our response to these growing business imperatives - and every company should have a game plan in mind sooner than later.
- Jonathan Wright is a partner and leader of the EY Asia-Pacific Advisory Center, Ernst & Young Advisory Pte Ltd. Lennard Lee is a manager at Ernst & Young Advisory Pte Ltd.
- The views reflected in this article are the views of the authors and do not necessarily reflect the views of the global EY organisation or its member firms