- Only 40% of respondents indicate that though they are aware, they are not prepared
- MDEC taking measures through various programmes to educate businesses
“EVERY organisation will eventually be a technology company. The introduction of Artificial Intelligence, Machine Learning and other technologies will result in this. You can’t escape it,” said Economist Corporate Network (ECN) global editorial director Andrew Staples during a briefing that explored the findings of a study “Planning for Prosperity” commissioned by SAP and conducted by The Economist Intelligence Unit earlier in 2018.
The regional study looked at family business leaders (many of which are small medium enterprises or SMEs) from across Southeast Asia (SEA) including Indonesia, Malaysia, the Philippines, Singapore and Thailand and how they rated their future readiness across categories of people, environment, process and technologies.
The surprising results of the study point that family businesses in Malaysia are least assured in SEA about their future readiness. On the other hand, SMEs from neighbouring Thailand reported the highest level of confidence and readiness although SMEs in Singapore reported the second lowest level of confidence.
Data from the study suggests at least 40% of respondents in Malaysia, more than double the average from other countries in the region, believe their organisations have to change in order to successfully overcome the challenges in the next three years. This indicates that though they are aware, they are not prepared.
Across the board, respondents from Malaysia scored lower than their regional counterparts when it came to their level of confidence in their employees’ abilities in digital proficiency, development of new skills and their ability to hire and retain talent. This denotes low levels of confidence in the talent pool.
The study also shows that 60% of respondents formally discuss their broad company strategy once a quarter while 30% do it once a month or more.
However, they are very much less confident in areas like machine learning, automation and data analytics.
A call for family owned businesses to step up
So what is holding back family run businesses in Malaysia in adopting technology to digitally transform their businesses? MDEC vice president of enterprise development Gopi Ganesalingam cites ignorance and fear of technology is the biggest reason.
Despite the fact that some businesses leaders are very successful, but they can’t even turn on a computer, he said.
“As the world embraces the digital age, it is clear that a revolution is taking place now with technology changing all the rules and making disruption the norm.”
Hence, this is where the younger generation comes in, said Gopi, as they are able to advise the older ones on technology being a tool to enable them to be more efficient while helping them derive insights from their data to make better-informed business decisions.
Not idly sitting by, MDEC has taken measures into their own hands as they have their Digital Transformation Acceleration Program which identifies companies that could potentially be disrupted.
The identified companies were then invited into a digital transformation lab to identify business pain points, brainstorm new ideas and business models before implementing a pilot plan. In the past three years at least 65 companies have passed through the lab’s doors. MDEC shares that many large family owned businesses have learned to reinvent themselves here.
Adding to that, SAP Malaysia managing director Duncan Williamson said that SMEs should up their game further by digitising their core business processes to help them achieve more success. This includes having instant access to information and streamlining everything from finance to talent management.
“There is much room for improvement with Malaysian SMEs who should start viewing technology as a way for greater productivity, operational efficiencies and cost-saving,” said Williamson.
Though the fundamental skills of running a business will not change, companies need to leverage on the young talent within their organisation as they are savvier and represent a significant portion of the customer base in the future.
“You need to bring them in and leverage on them, give them lots of space to operate in your business,” Williamson advised.
ENC’s Staples gave his own piece of advice saying that companies that want to implement digital transformation should do so in incremental stages rather than a large scale. “Continually move in with incremental changes as a big change that reconfigures an entire organisation at one go could take 18 months to complete. By the end of that, the technology you implement would already be outdated,” he said.
Though there may be a lot of talk about leveraging on technology, SAP’s Williamson did, however, warn that there still needs to be a clear focus on outcomes. “Recognise that the technology is there and there is a clear reason to use it rather than just implementing it for the sake of technology.”
Despite the rather negative outlook, both Gopi and Williamson are confident that should the very same study be conducted next year, the results could very well be different.
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