- Make use of your data, make quick decisions to see opportunities and cost savings.
- In Malaysia, not many retailers understand the benefits of using data
BACK in 2002, Senheng Eletric (KL) Sdn Bhd managing director Lim Kim Heng decided that he wanted to grow the company and make quick decisions. He had ideas on what he wanted to do with the company and wanted to execute them as soon as possible.
However, he was soon faced with a stumbling block. He asked his IT managers for data and was told he had to wait two weeks for the data. This led to him being extremely frustrated and thus he decided to invest more money in IT.
“At that stage, we were a RM200 million company. We had to invest half a million in IT. However, this paid off in less than two years. Make use of your data, make quick decisions and you will see a lot of opportunities and cost savings,” Lim said during the recent “What’s Next 2017” conference during a fireside chat titled “From SME to Billion Ringgit Club- The Data Journey of Senheng Electric”.
Why haven’t other SMEs done the same thing, asked provocateur and Digital News Asia founder Karamjit Singh.
Lim replied that they dreamed big and thought big, and dared to take on the challenge. “A lot of other retailers didn’t dare, but I dared, so we’re now the biggest in the country.”
He shared that in the global retail landscape, Malaysia is still far behind Japan and Taiwan. “We flew to Taiwan to learn how to duplicate stores and create chain stores. Sometimes you can’t find things locally, you should go out of the country to learn.”
“Once you are the CEO you have to lead the company and make the decisions, you need to know what’s going on, you need to use e-commerce,” he added.
Once he knew about data, could his people accept it? “When you implement BI, no one gets used to it except the CEO. Now we implement BI on the go, right to the hands of every shop manager. There are currently close to 300 users using BI,” he said, referring to business intelligence.
According to Lim, by sharing with his staff the same access he has to data, they can tell whether they’re lagging behind and then act. This is how he empowered his store managers. He also monitors his staff every quarter via key performance indicators and in the past, has had to transfer non-performers to smaller units, demoting them and even sacking some.
Passing on the knowledge
Karamjit asked Lim why other SMEs had not followed Sengheng’s example, despite the success they have had using data the right way. “I think in Malaysia not many retailers understand the use of data, the benefits of using data,” Lim said.
“The traditional method of using BI was different, you needed to spend half a million to one million to have in-house BI. But now with new utility models, you can lease and reduce the cost of entry and the risk of investing half a million,” he added.
In fact, Lim founded Blackbox Insights Sdn Bhd, a data company to promote big data analytics and make it affordable to other SMEs.
Blackbox Insights chief operations officer Desmond Ng recalled: “When we decided to set up a data company, I didn’t know what data was, it was alien to me. Before we even talk about the data journey, it has to be a top-down approach.”
He related that during the first year of setting up Blackbox Insights, they did a proof-of-concept, the sales cycle took months and the costs were passed down to customers.
“We lost a lot of money in 2013; we started the project purely from the angle of CSR,” he explained.
But the million-dollar question is why the take-up rate so low among SMEs? He explained that during their presentations to companies, business owners realise data is important, but they don’t understand what it is all about. “Most of the time, they don’t embark on the data or digital journey.”
He said that they try to make business owners see that there is a bottomline impact to BI, and that it delivers incremental performance to the bottomline.
Is it easier today to make a sale to SMEs? “Our vision is to help SMEs embark on their data journey; if you look at the base of SMEs today, I can handle up to 600 SMEs. They see the value along the way,” Ng said.
Lim meanwhile, noted that after factoring in data and launching a seamless business model, their business grew by double digits. Adding the digital overlay has led to convenience and more speed for customers, he added.
His advice to other SMEs going digital? “You need to consider your five-year plan. I believe online will pick up sharply in 2018. We want our customers to come online or offline to find information and it is up to them where to shop and where to collect their purchased goods. We also allow different methods to make payments. When it comes to enquiries, they can walk in, call in, use our app.
“This is something like an Uber concept. If they have enquiries we get the nearest location to give the customer the response. It’s more than just opening an e-commerce store,” he concluded.
What’s Next was sponsored by big data and analytics specialist, Fusionex International, Malaysia Digital Economy Corporation (MDEC), Maxis Bhd and Anaplan. Accenture Malaysia was Knowledge Partner, iTrain as Training Partner, Leaderonomics as Leadership Partner, Ansible Malaysia as Digital Partner and Valiram Group as Lifestyle Partner. BFM was the Media Partner.
Note: Strengthen your organization's ability to recognise and respond to the opportunities and threats that Digital Disruption is having on your industry, your company. Send your middle level managers to What’s Next: Raise Your Digital Quotient workshop that DNA is organizing together with iTrain Sdn Bhd on Nov 20 & 21. You can get the details of that HRDF claimable workshop here. Besides the dynamic sessions over the two days, you will also hear from the chief digital officer of Celcom, Dave Marrow and Desmond Ng, the COO of Black Box, the big data business of Senheng. It’s going to be a real eye opener of a workshop.
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