Opportunities in digital there to be seized, speed is of essence: Page 2 of 3
By Karamjit Singh August 14, 2017
Azwan: So, how are you trying to move the needle?
Azmil: Well we actually came up with a tool kit to help them improve their innovation levels. Aside from this, with our Khazanah linked companies, we have constant conversations with them where we try to be a ‘sensor’ for them.
What I mean by this is that, because we have offices in innovation hotspots like Beijing, Mumbai, London and San Francisco where we meet lots of tech companies, this gives us a better feel for what is going on and we feedback this to our companies. Be it via board presentations, to the management teams or in one on one conversations, all designed to help them increase their level of understanding of what is going on.
Datuk Shahril Ridza Ridzuan, chief executive officer, Employees Provident Fund: I agree that you have to look at the picture from a global point of view and not Southeast Asia. But when you ask about our readiness for the increasingly Digital Economy, in our experience transforming our services from physical to digital,
we have seen a very high rate of adoption, especially among our younger members.
They are more than happy to have our services delivered to them digitally via our app, portal or even self-service kiosks. But the older generation are not as comfortable using technology and this is evident especially among employers.
As we compel employers to use online channels as they interact with us, and it has been very successful with 99% adoption, however, less than 30% employers have adopted our online payment option. We put this down to a confidence issue with fears over cyber security issues such as phishing, ransomware.
But it is picking up and we have a target of moving online payments to 50% by end 2017. This is a cultural adoption challenge rather than availability of system or network. But clearly the transition to digital delivery of services is very high, driven by lifestyle and consumption trends.
Azwan: YB Madius, is there a country you are looking at for Malaysia to emulate as we transition to a digital economy?
Madius: Well Germany has a solid model with a framework and policies in place. And then in Asia, you look at China and the pace of change is so fast there. China even wants to be a cashless society by 2030, only 13 years away. But in terms of governance you can’t compare us as they move a lot quicker and can even do things like block Facebook. But we can’t make such drastic moves and nor can we implement policy as quickly as them.
Azwan: After seeing the results of digital disruption in several industries within Malaysia itself, such as transportation, entertainment and retail, enterprises need to constantly reinvent their offerings to keep up with the rapidly evolving expectations of digital consumers. What are some of the shifts you see in the way Malaysians interact and consume products and services. How do you think Malaysian organisations should respond?
Madius: The picture here is not that bright. Through a partnership Sirim has with a German company, it has been conducting technology audits for SMEs in order to help them identify gaps and boost productivity improvements. But from assessing the capabilities of 300 companies, we find that many of our SMEs are still rooted in Manufacturing 2.0. They need to leap forward but when Sirim goes in to try and help them, they become wary of our intentions and worry about their trade secrets. So we are trying to educate them that Industry4.0 is not about who owns the tech so much as it is about their business model adapting. So we have that mindset hurdle among SMEs to try to overcome.
Azmil: There are two parts to this changing consumption picture. First, on a per capita basis, Malaysians are among the highest users of the internet in the world. But what stands out here is that our consumption is heavily skewed towards entertainment especially through Facebook and Instagram and not so much on research based usage. So this is one area we can definitely improve on.
Secondly, from a marketing standpoint, all industries need to master marketing on Social Media as the traditional marketing methods get less effective. But not many companies are good in that and we are probably behind in this area.
One interesting consumer trend we noticed was in retail and in China. We were an investor in the Parkson retail group very early on and saw that their results were being hit, especially in China which was when we noticed Alibaba and saw how companies like them were killing traditional retail.
This is happening across the board, all over the world where retailers are starting to struggle. But zoom back in to Malaysia and in a way, we are lucky because, while it is very hard to predict the future, you just need to look overseas at the impact of digital disruption. It is only a matter of time before that disruption comes here. Yet, it is not clear to me that we are taking advantage of this to study what is happening to similar industries overseas.
Shahril: In terms of consumption trends and how we are responding, we definitely see the influence of Social Media (SM) and peer to peer (P2P) marketing. Driving this consumption of SM is the low levels of trust of the media which results in more people believing what they get from SM.
Our response to this is to take the battle to the SM front with our corporate development team spending time on SM to address any issues. We also use external help. The biggest challenge here has been the response time which has had to be reduced to the same day.
Beyond our own experience, we see online shopping in Malaysia following global trends with disruption in both retail and media and I think banking will be affected over time as well.