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Building tomorrow's digital businesses
BUSINESSES across industries are now embracing new technologies. They are using data to adopt smarter ways of working, to be more efficient and productive, to deliver better customer experiences, and mainly, to remain competitive.
We have seen the likes of internet entertainment service Netflix use data and analytics to personalise content and provide recommendations based on a subscriber's viewing habits, and offer a more personal customer experience. Another example is the Port of Singapore, which is using artificial intelligence (AI) and predictive technologies to enhance navigational safety and improve maritime and port operations.
Governments, meanwhile, are taking steps to better facilitate and regulate trade in the fast-growing digital economy. Recently, the Singapore Government, understanding the significance of how business models and trade continues to evolve due to digitisation, initiated a trilateral Digital Economy Partnership Agreement (DEPA) with Chile and New Zealand. This helps to set the standards and address governance issues in cross-border digital trade amongst the countries.
The digitisation of industries has been earmarked as a key priority by governments in Asia towards progress. China's formerly-named Made in China 2025 national initiative, for instance, may have run into its fair share of criticisms at a global level, but there is no denying the heavy focus the government has placed on transforming industries through technology. Similarly, India's Digital India programme and Singapore's own Research, Innovation and Enterprise (RIE) 2020 plan will place expertise and investment on industrial digital transformation.
The evidence to support the ongoing move towards digital business models is staggering. A recent study revealed that Asia-Pacific's gross domestic product (GDP) can gain as much as US$292 billion if all financial services institutions (FSIs) in the region embrace digital transformation.
Evidently, technology is not only redefining how businesses engage with their customers, but also challenging the way things have always been done in established industries - from the banking halls to the manufacturing floors.
BANKING & FINANCIAL SERVICES TURNING TO CLOUD
In fact, the digital future for banks and financial services institutions (BFSIs) continues to have a strong outlook and are disrupting traditional modes of operation. Customers prefer to conduct daily banking online or via Automated Teller Machines (ATMs) in contrast to using branch services or phone lines. Banks around the world are quickly realising how investments in digital technologies can benefit customer acquisition and satisfaction. Singapore-based DBS has been recognised globally as a leader in innovation when it comes to delivering better services through a digital business model.
BFSIs are now starting to discover the benefits of cloud technology while transforming their IT setup; allowing them to expand their reach and offer reliable services to customers around the clock through a purpose-built cloud network.
However, throughout progressive changes in the banking and finance sector, cybersecurity and governance risks continue to be fundamental concerns. The industry is dogged with concerns from regulators and consumers about malware, botnets, phishing, and ransomware among other dynamic threats from taking transactions online or to the cloud.
While mobile banking services are welcomed by consumers, the onus lies with financial services organisations in working with a trusted IT partner to deliver a connected security strategy for risk management. This would encompass, but not be limited to a highly controllable, intelligent, and secure network that seamlessly supports an agile IT infrastructure that can spin up applications in the right cloud at the right time and place, while leveraging insights backed by real-time threat intelligence to keep digital businesses secured.
MANUFACTURERS IN ASIA-PACIFIC TAKING THE LEAD IN DIGITALISATION
Similarly, we are seeing a major shift in technology adoption in manufacturing. The fourth industrial revolution, better known by its "Industry 4.0" moniker is well and truly upon us and data is the fuel that keeps the proverbial cogs of manufacturing turning. Manufacturers have become more sophisticated in their big data and analytics capabilities towards process and production improvement, while connected technologies and the Internet of Things (IoT) has helped to gain greater operational efficiencies and respond faster to customer demands.
In the Asia-Pacific, manufacturing companies are connecting new technologies across their organisations at a rate that is way ahead of their counterparts in other regions. A recent study revealed that 32 per cent of Asia companies plan to have established mature digital ecosystems in the next five years, compared to 24 per cent in the Americas and 15 per cent in Europe, Middle East and Africa (EMEA).
The owner of this study, PwC, stated that only 10 per cent of global manufacturing companies are "Digital Champions" and 19 per cent of these players are across Asia. Digital Champions here can be generally defined as manufacturers that go digital in a more far-reaching manner. For example, they may deploy artificial intelligence (AI) and data analytics to create new value-added services to customers or a more optimised supply chain.
Recently, we came across Visteon, a firm that designs and manufactures vehicle cockpit electronics. Formerly a division of the Ford Motor Company, Visteon took its autonomous business forward by creating a new IT model that allowed for flexibility and scalability as the company needs changed. With a decentralised and secure private cloud, engineering initiatives can be realised more quickly.
Automation is essential in manufacturing to deliver cost and production efficiency while data will continue to provide critical insights in this Industry 4.0 era. When executed and managed correctly, data can be delivered across the organisation towards a unified approach to serving customers and making decisions.
DATA AND ANALYTICS THE VERY BACKBONE OF DIGITAL BUSINESSES
Across industries, and not just in BFSI and manufacturing, traditional companies are turning into digital businesses. Most significantly, digital businesses - be they small or medium businesses (SMB) or large enterprises - are organisations that are wholly data-driven through a three-pronged approach in how they acquire, analyse, and act on data for competitive advantage. Perhaps the strongest tie that binds digital businesses is their aim to deliver a consistent and differentiated customer experience, and data and analytics is the key technology that allows them to do that.
In a CenturyLink commissioned digital transformation study conducted in 2018, the two objectives that most respondents cited for improving operational efficiency were to better serve customers and to use data for better decision-making - each selected by 41 per cent of the survey base. That means businesses embarking on digital transformation projects see them as a mechanism not just for digital change, but for a broad, organisational rethink that can help reset the standards for how the organisation approaches customers, employees, costs and revenue.
Simply put, data and analytics are now the very backbone of digital businesses. This reliance on data means digital businesses need to be supported by robust and intelligent adaptive networks so they can better engage with customers. It is also crucial for digital businesses to be equipped with agile IT systems that can help them seize opportunities quicker and deliver mission-critical applications faster. Most importantly, they need a connected security strategy to protect valuable applications and information internally and externally. Improved business systems and network reliability, in fact, are now major contributory factors to success and bottom line of modern-day digital businesses.
- The writer is Senior Managing Director, Asia-Pacific, CenturyLink.