Malaysia to brace for digital disruption in 2016
By Albert Chai January 21, 2016
- New business models are changing the competitive landscape
- Digitisation requires reinvention, needs to address culture, talent, technology
THE Malaysian ICT industry has seen some noticeable developments in the last 12 months, attributed to the increasing cloud adoption, advanced big data applications, mobility optimisation, and the growing emphasis on facilitating the Internet of Things (IoT).
The convergence of these technology transitions is bringing an immense focus on how technology and connectivity can further improve productivity and change people’s lives.
As it is, new business models like those from ride-sharing and banking apps are changing the competitive landscape – and we can expect similar disruptions in the year ahead as we enter a time for Malaysia to brace for digitisation.
Digital disruption not only impacts key economic sectors and many facets of our lives, but also creates challenges for established business models.
It is no longer the question of what drives digitisation, but rather how Malaysia should embrace digitisation and prepare towards 2016.
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No longer a luxury
Malaysians today are more connected, mobile and tech-savvy. They increasingly demand for services and capabilities that only digitally transformed nations and organisations can offer.
For instance, transportation and courier services thrive on connections, feeding valuable information to drivers delivering packages or passengers waiting for the bus. A little less technology involved would render these services sub-optimum.
In short, digitisation – or bringing the connection of people and business with things – is not a luxury anymore. It is a necessity to survive and thrive in an environment where the Internet changes everything, while opening up abundant opportunities for fast movers.
This is especially important considering conservative speculation of the 2016 economy that is set to slow to 4.5%, according to the World Bank, while the ICT industry is cautiously optimistic with a 12-14% growth projection.
In such an uncertain yet competitive landscape, we need be strategic with ICT investment, focusing on transforming businesses into a hyper-aware, predictive, and agile organisation.
Business processes will become intelligent systems that respond to any situation, connecting both machines and people to enable critical, real-time responses and insight-driven decision-making.
Leaders must transform too
Gartner estimates (PDF) that 75% of businesses will become digital by 2020, but only 30% of digitisation efforts will be successful, owing to lack of specialised talent and technical expertise.
Cisco’s Digital Vortex study (PDF) discovered that only one in four leaders say they are being sufficiently proactive about digitisation, while almost half of the leaders surveyed (45%) say digital disruption is not a board-level concern.
As our executive chairman John Chambers puts it, this defining moment of the Internet will bring many opportunities to revolutionise the world, but only as long as leaders are ready to embrace it. Organisational changes must be driven by the executive leadership team and board of directors.
Given the magnitude of digital transformation, only top-down leadership will ensure that new strategic directions are cultivated and supported.
In addition, leaders must drive the creation of the ‘workforce of the future,’ one that is digitally savvy, creative and accustomed to constant change.
Security as a core competency
Connected experiences fuelled by digitisation means new entry points for hackers. With the average cost of a breach now reaching US$5.9 million, security has become a major concern to an organisation’s bottom-line.
Seizing the digital opportunity, organisations need to make security a core competency, while protecting assets across the attack continuum – from the network to the endpoint and from the cloud to every corner of operations.
In the coming year, businesses need to deploy an integrated approach that minimises security risks and exposure versus point solutions that can leave vulnerable gaps.
In addition, organisations should work with trustworthy vendors and enlist security services providers for guidance and assessment. This in turn would allow them to focus on managing the transformation and growing their business.
Partnering is critical
Digitisation is much more than just embracing technology to do business at a lower cost, and certainly not just about gathering heaps of data for decision making purposes.
It means re-inventing how you run your organisation, while addressing culture, talent, technology and beyond.
As we move into the year of digitisation, strategic partnerships are going to become more important than ever.
Albert Chai is managing director of Cisco Malaysia.
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