ASEAN – first steps on the path to digital transformation

Businesses in the Association of Southeast Asian Nations (ASEAN) feel they are facing significant barriers in their digital transformation. A recent Microsoft Asia report, Digital Transformation Study, found that just 44 percent of ASEAN business leaders “believe they have a complete digital strategy in place”, despite 91 percent saying they believe it is important “to have an agile business that is data-driven”.

All around the world cloud, mobility and data are changing the way that companies do business by enabling new ways to interact with customers and for workers to do their jobs. The incentive is clearly there for ASEAN enterprises to embrace digital transformation and become data-driven businesses. Regionwide, the 2016 Cloud Readiness Index by the Asia Cloud Computing Association, placed Asia at the top of the “cloud ready” rankings, ahead of markets like Germany, the UK and the US.

Other evidence of pioneering digital transformation in the region exists, particularly in ASEAN’s flagship technology market Singapore. The city-state is turning itself smart and recently became the first country in the world to launch self-driving taxis. ASEAN nations should look to follow neighbors like South Korea, which is home to the world’s highest number of broadband services per capita, boasts 100 percent 4G mobile broadband penetration and is even set to deploy pre-standard 5G networks in 2017.

But despite these regional initiatives, many ASEAN member countries have not yet formulated clear digital data strategies and it risks holding them back.

Personal tech use not yet transferred to the workplace

ASEAN countries have social media user penetration levels of between 70 and 75 percent, so it is clear that the population is engaged and comfortable with data. And in terms of actual mobile subscribers, if ASEAN were a single country, it would have the third highest number of mobile users in the world behind India and China, with around 700 million – interestingly 70 percent of whom are under the age of 40.

ASEAN member countries’ citizens are among the most technology-passionate in the world. If visiting, one cannot fail to notice the blanket mobile device usage in any café or shopping mall in Thailand, Vietnam or Singapore. So while the region has plenty of digital natives, it does not yet have the digital enterprises to get the most out of them.

Why is a digital strategy so important?

Today’s world has become mobile-first. In Asia 56 percent of people use their mobile device as their ‘first screen’ for everything from social media through to watching TV – and technology is entwined in daily life. The Internet of Things (IoT) will see more devices coming online and more data being created.

To capture these consumers, companies need to focus on digital strategies, incorporating cloud and mobility. The new economy is being powered by data, and the ways that companies gather, analyze and utilize data is central to how successful they will be.

How can ASEAN countries make the shift?

The transition from traditional economies to fully-fledged digital societies is a challenge for the region. Companies with designs on digital strategies and becoming data-driven need to focus on a few key areas of development. One is infrastructure, where companies throughout ASEAN need to ensure they have platforms in place that are capable of working with numerous data sources and types of device. For example, cloud remains largely untapped in Singapore, where only 9 percent of local businesses consider adopting cloud services to be the most important trend in their organization, which is not conducive to a progressive digital transformation approach.

Throughout the world successful businesses are currently embracing collaboration in the enterprise, leveraging their employees’ desire to share and communicate to the organization’s benefit. Collaboration is a core element of digital transformation, but again companies need the right tools, applications and infrastructure in place to empower employees to collaborate, be more flexible and be more productive.

The Microsoft Asia Digital Transformation Study’ also focused on the reasons ASEAN business leaders cite for adopting a digital strategy: 86 percent of ASEAN business leaders cite efficiency in operations as the main reason for doing so while 85 percent say their preferred benefit is the ability to make real-time decisions. Another 77 percent say they want to use digital technology and a data-driven approach to improve customer satisfaction and retention.

Yet despite these perceived benefits, the same ASEAN business leaders also see barriers to their implementing digital strategies. The report found that 52 percent of respondents said they feared high costs, 43 percent said they felt a lack of skills among the workforce would present an obstacle, which is not something that is backed up by the sheer number of devices and data used by individuals in the region.

Quite revealingly, some 87 per cent of ASEAN business leaders said they believe data culture should be driven from the top – somewhat at odds with the collaborative approach being taken in other regions where Generation Y employees are encouraged to get involved, innovate and offer suggestions on how to improve workplaces using digital. According to a recent report by Oxford Economics, every percentage point that mobile internet penetration rises in Southeast Asia adds $1.5 billion to the region’s GDP, with the potential to add a million jobs by 2020.  

ASEAN end users have embraced data and digital on a personal level. Not it is time for employers and governments to embrace digital transformation of work and society. 

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Steve Harris

I’ve been writing about technology for around 15 years and today focus mainly on all things telecoms - next generation networks, mobile, cloud computing and plenty more. For Futurity Media I am based in the Asia-Pacific region and keep a close eye on all things tech happening in that exciting part of the world.