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Thriving in a digital economy
- Chris Kelly, VP & GM, Data Center & Compute, Dell Technologies, Asia Pacific & Japan
- Peter Chambers, MD, Sales, APJ, AMD
- Rajnish Arora, VP, Enterprise Computing, IDC Asia/Pacific
Moderator: Amit Roy Choudhury
DIGITALISATION has brought about tremendous changes in how we live, work and play. The digital economy is set to add as much as US$10 billion (about S$13.5 billion) to Singapore's gross domestic product (GDP) by 2021. It is not only Singapore; IDC predicts that this year more than half of IT spending in the Asia Pacific including Japan (APJ) region will be driven by digital transformation initiatives. Businesses in the APJ region need to build infrastructure that supports scalable applications, provides agility, reduces risk, enhances customer experiences and brings down the Total Cost of Ownership (TCO).
The Business Times brought together some industry experts to discuss the broad trends in digital transformation and the way forward for a roundtable discussion on the subject.
Amit Roy Choudhury: The rise of the digital economy is changing the competitive landscape across industries. Before we delve into some of the major digital transformation challenges, as well as opportunities, can you give us a broad overview of what your perception is of the Asia Pacific technology landscape?
Chris Kelly: The APJ region has among the most fascinating technology landscapes globally and there are three key reasons why I say this.
First, the region comprises a range of diverse markets. Despite their varied digital journeys, in our conversations with customers, the singular focus area we often hear is leveraging their unique digital ecosystems to drive business innovation. We believe that the increasing acknowledgment of data as a competitive advantage and its significance in delivering new experiences to customers, constituents and employees, is set to drive digital transformation in APJ. The recently released Dell Technologies' 2020 Global Data Protection Index (GDPI) Snapshot shows that in 2019, 75 per cent of organisations in the region saw data as valuable and they were currently extracting value or planning to do so in the future.
The second aspect is businesses in the region have a growing appetite for leapfrog technologies. The same study reports that almost all APJ respondents' organisations are making some level of investment in newer or emerging technologies, with the top five being: cloud-native applications; software-as-a-service (SaaS) applications; artificial intelligence (AI) and machine learning (ML); 5G and cloud edge infrastructure; and Internet of Things (IoT)/end point. As a region home to more than 60 per cent of the global population, the potential to drive change and emerge as a leader in new technologies is compelling.
The third reason is that the accelerated digital changes are transforming industries such as manufacturing, health care and banking. Manufacturers are employing emerging technologies like AI and Industrial IoT to enhance productivity and optimise efficiency, thereby increasing performance and reducing operating and capital cost.
Digital transformation has also disrupted the banking industry with blockchain redefining secure transactions, robo-advisers offering wealth management tips and data analytics forming the bedrock of operations.
Peter Chambers: Asia Pacific is a unique market with a diverse range of technology requirements from countries at very different levels of development and digitisation. That said, it stands that basically every business is powered by data in some way, from small local companies to global corporations.
Companies continue to demand data-driven results and it is becoming increasingly important to focus on technologies that can be used to deliver what they need and grow with them. Customers are living in a digital world, they're always connected, and this is particularly true in Asia Pacific which for the most part is developing at a faster rate than some of the more mature markets globally.
We are seeing enterprises adopting new technology and solutions and this shift in technology requires collaboration between many parties including silicon vendors, hardware companies, software developers and of course end customers to ensure they get the right product with the performance, cost, security and outcome they need.
The data centre is a key area of focus for AMD and our partners such as Dell Technologies. Together we are committed to deliver choice and innovation across high-performance computing, enterprise and cloud with AMD's EPYC server processors changing the dynamics of the data centre. Great examples of this are the Frontier and El Capitan, two of the most powerful supercomputers coming up over the next few years for the US Department of Energy. Closer to home, in Asia Pacific, Dell Technologies and AMD have been working together to help the Pawsey Supercomputing Centre upgrade its cloud infrastructure to accommodate ongoing data-heavy research for the Australian government.
Rajnish Arora: Businesses across APJ are transforming at breakneck pace to achieve operational model transformation, delivering personalised experiences to customers at scale, and delivering digitally enhanced products and services. Organisations that have already embarked on their digital transformation journey are seeing clear benefits and distinct business outcomes which are helping them redefine their sustainable competitive advantage. IDC's DX (digital transformation) Executive Sentiment survey results from 2019 show that more than 40 per cent of the organisations in APJ are already digitally determined; that is they have a clearly defined enterprise-wide digital strategy to transform people, processes and technology.
In the region, organisations are becoming more mature and sophisticated in their digital transformation strategy which is helping reshape their digital vision and tactics to achieve measurable business outcomes. In 2020, more than half the IT spending in Asia Pacific will be driven by DX initiatives. The digital economy has rapidly grown over the past five years and it looks likely that by 2023, products and services from digital-native enterprises will account for more than half of the global GDP and we will finally attain "digital supremacy".
Amit: Digital transformation can be undertaken at any time but usually works best in companies that are already doing reasonably well but realise that changes in technologies can threaten their business model by allowing challengers to disrupt their business model. Can you give a broad overview of the things that companies need to keep in mind when they start on their digital transformation journey and what kind of milestones should they set for themselves?
Chris: Organisations would benefit from having a holistic view of their unique digital journey. The IT transformation approach that we recommend to our customers is based on our experience using the same Dell Technologies products, services and solutions to transform our own business.
As businesses look to embark on their digital transformation journey, there are a few significant milestones that they need to map out.
- Assess their "as is" digital maturity: Organisations could start by evaluating the current size of their data, their digital demands, where they are on the transformation curve and their current challenges.
- Ask themselves what is their "to be" digital transformation state: As companies plan their digital transformation strategies, they need to think through where they want to be in terms of their business model, customer experience and their competitors.
- Transform IT to make it a strategic business partner: To innovate at a pace that keeps them ahead of market conditions, companies will need to rethink their approach to IT, so that it becomes an enabler rather than an inhibitor to business success.
- Manage the people, process and culture-related aspects: Having an effective end-to-end digital transformation includes managing all aspects that enable and support sustained technological change.
o People: As an organisation progresses along their unique digital journey, they are likely to realise that they have a surplus of legacy skills and a shortage of the new digital skills needed to pursue their digital strategy. Relying solely on hiring external talent isn't sustainable when in-demand skills are constantly evolving and competition for talent is fierce, so they will need to upskill and reskill existing employees to perform the new roles they need to be successful.
o Process: Traditional IT team silos of technical expertise (compute, storage, networking, software) can't keep up with the needs of a digital organisation as they require too much coordination and handoff between disparate teams. Therefore, companies may need to modernise their processes for software development and platform engineering - embracing Agile, DevOps, product versus project teams, lean practices and user-centred design so they can maximise the speed of innovating the new product features that their customers care about.
o Culture: While it is important for an organisation to develop the right digital strategy, that strategy won't be successful unless the culture is also aligned to execute. For a digital organisation to excel in an era where they ideally should adapt to a fast-changing and uncertain market, customer and technology conditions will require companies to cultivate a culture of innovation and learning.
Peter: Companies need to keep in mind that digital transformation isn't really an option; it is critical in order to be competitive. At its core is the need to modernise brittle, costly, non-performing and vulnerable infrastructure. Companies need to be sure that they are choosing solutions appropriate to their scale but with the room to grow rapidly with them, should they need it. It is important for them to build partnerships with their vendors to ensure that they have the necessary support as they make this complicated transition.
It is important to understand that much has changed in process technology over the last few years. What was previously unachievable is quite often now possible with leaps forward in performance and efficiency. It is important for companies to understand that processing demands continue to grow, proportional to the growth in data, so setting milestones to ensure that scalability can be achieved effectively is essential. AMD is watching the trends in digital transformation, in conjunction with our partners, to ensure that we can continue to support our customers.
Rajnish: IDC believes that digital transformation can be a success at an organisation as long as it has the tenacity, resilience and four key strategic imperatives in place. First, digitally determined organisations need a single enterprise-wide digital strategy versus having multiple digital strategies across each business unit and business functions. In addition, organisations need a long-term investment strategy versus short-term funding mechanisms because digital transformation is a multi-year journey that requires a sustained appetite for continual investment.
Resoluteness to drive organisational change and cultural transformation are other key imperatives for success in the digital journey. Digitally determined organisations are two times more likely to have digital teams embedded throughout the organisation as opposed to residing in a central digital group. Last but not least, digitally successful organisations are making investments in a single digital platform to scale innovations.
They also have the ability to successfully run traditional mission-critical and next-generation modern workloads with the desired performance, resiliency and security metrics. To make the most out of digital transformation, companies should aim to create an intelligent ecosystem that will help give them a strong competitive advantage.
Amit: Data is key for a digital-enabled company and companies need to take a data centric approach and this entails acquiring the ability to collect and house data in a seamless and secure environment. How should companies approach their data requirements during and after their digital transformation journey?
Chris: CIOs are becoming increasingly aware that, effectively dealing with and interpreting data into actionable steps, will drive digital transformation and play a crucial role in differentiating them from their competitors. To drive effective digital transformation, the overall approach should include:
- Create what customers crave: As IoT continues to expand at an unprecedented rate, the physical entities that we interact with every day are all becoming sources of data. Leaders in the digital future will be the organisations which can not only gather, store, process and analyse data to generate insights from it but which can also systematically act on those insights to deliver personalised and differentiated customer experiences at scale. Therefore, businesses should develop the new digital products and experiences that their customers crave by building competence to innovate with data and software.
- Unlock the innovation engine by thinking "data-first": To realise the true potential of the data at hand, the visibility of the source, and defining the outcomes of the data for the business are crucial. A good start is to connect and have conversations with customers, partners and suppliers in one's digital ecosystem. This can lay the foundation on which to build a digital organisation as it will help to master modern software development and delivery practices, establish a consistent operating model across the core-edge-cloud and rethink your mindset to managing security.
- Inspire your workforce by creating a digital workplace: By developing a holistic digital workplace, employees are often motivated to support and drive organisational digital initiatives.
- Reduce digital risk through intrinsic security: Business leaders must know that the exponential growth of data combined with increasing value of data is creating opportunities but also new risks as organisations grapple with how to reliably and sustainably protect their information. Organisations need to develop intrinsically secure infrastructure platforms and devices that enable them to manage vast amounts of data.
Peter: It is essential to create infrastructure that can keep up with the massive explosion of data, while delivering the best data services and throughput. To ensure that data is available to best benefit the organisation, it is important that there is a strategy in place to meet the needs of the business, depending on the applications and workloads that are required the most.
One of the key considerations for data is security, and AMD's hardware-based security approach is helping protect user data. AMD EPYC CPUs feature a separate dedicated AMD Secure Processor to ensure the secure storage and processing of sensitive data and trusted applications. AMD has embraced an industry-standards approach that merges and manages a comprehensive ecosystem of hardware and software partners. This means that our hardware partners can build platforms that have trust built in from the start, while our service and content partners can rely on that integral trust to start launching innovative services and new business opportunities.
Rajnish: If data is the fuel in the digital economy then the right data platform and data services are the underpinning engine to drive the business outcomes. IDC estimates that worldwide spending totalled US$1.25 trillion in 2019 to drive digital transformation initiatives. Out of the total, a third was spent on hardware.
Organisations face three distinct challenges when it comes to data in the digital age - data access and data quality, analysing the data and securing digital assets. CIOs need to drive data infrastructure modernisation conversations with their tech suppliers and partners around these three key vectors.
Amit: Companies need to build infrastructure that is highly available, scalable and which supports high performance computing in a secure environment. Can you share your experience on what are the things that companies need to keep in mind when building out these digital capabilities?
Chris: When building out their digital capabilities, companies need to plan for a few critical aspects. The first aspect is thinking about modernising data centres. If not well planned, organisations run the risk of not enjoying the benefits of an effective digital transformation despite making substantial investments. Modernising a data centre can be cumbersome and deciding on the best solution can be challenging and this is where technology partners can step in to provide the needed expertise.
Moreover, servers that form the bedrock of a modern data centre must embrace traditional and multi-cloud approaches, helping organisations become more agile and deliver new insights from data.
The second aspect is planning for effortless management. Many organisations underestimate that a key aspect of infrastructure is how to connect applications, or parts of applications, when some will be running in the core, some at the edge and some in the public cloud. Organisations must think of integration, API management, data protection and the overall governance and movement of applications and data as they transition.
Finally, look for integrated security. Servers should be cyber resilient by design. Our end-to-end security and signed firmware updates help protect against malicious activities at both the hardware and the firmware level. Going down this route provides a more robust infrastructure, as it infuses a security mindset right from the design of the components to the sub-system to the platform.
Peter: Performance is critical but it needs to be part of a scalable solution to enable companies to embrace digitisation and grow their physical or cloud-based infrastructure in the long term. This is especially true in the data centre and AMD EPYC delivers a processing solution that was designed for the upcoming needs of the data centre with more bandwidth, more cores, more connectivity options.
Both, scalability and security are essential. Companies need to look at potential vulnerabilities of all solutions to evaluate what is most effective in building out their digital infrastructure. Partnering an AMD EPYC CPU with a server vendor like Dell Technologies who also sees security as being core to their design will give companies the best and most resilient solution.
Rajnish: Beyond provisioning IT infrastructure, companies need to choose the approach that is "right" for them. A "right-fit" IT infrastructure provides a solid foundation on which firms can accelerate their digital journey.
IT can enable businesses to produce consistent outcomes by making timely investments in a workload-optimised and innovation-packed infrastructure platform, from a trusted vendor. Additionally, we consistently find that infrastructure operating costs continue to spiral upwards if businesses do not upgrade in a timely manner. A one-size-fits-all approach to infrastructure platforms can potentially slow down the pace of business innovation due to issues around performance and scalability.
Companies must move towards a workload-optimised approach to making infrastructure decisions. In other words, companies must consider both technology and business economics when it comes to infrastructure. Rather than independently building infrastructure from the ground-up, companies should consider working with trusted vendors as a partner that are able to deliver a fully optimised and secure platform.
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