Harnessing technology to accelerate digitalisation

By Morten Bangsgaard, Chief Technology Officer, Maxis

Some of you may have seen a picture circulating with the question, “Who’s responsible for your company’s digital transformation?” The answers provided are “CEO”, “CTO” and “Covid-19”. with the last answer being the “correct” one. While this may inject a little bit of humour in otherwise difficult times, there is some truth to it. Many businesses are facing the urgent need of going digital to continue running and it is without a doubt that businesses that have undertaken digital transformation these past few years, have benefited from their early efforts. In fact, an IDC-Microsoft study1 suggests that those who have advanced digital transformation strategies are seeing between 20 to 30 percent improvement across various business areas.

Although the benefits are clear, many are slow to kickstart their digital transformation journeys. SME Corp announced last year that less than one-third of small and medium enterprises (SMEs) had embraced digitalisation2. Nevertheless, efforts are being made to boost this number including the allocation in Budget 2020 which focuses on SME digitalisation.

A likely outcome of the impact of Covid-19 on businesses and societies worldwide is not just the realisation but real action in expediting digital adoption, with many realising the need to transform digitally now. It is important to note that while adopting new technology will help businesses survive in this period, it will also enable them to thrive once they emerge on the other side.

Here are three big trends which I believe have been the bedrock of many digital transformation agendas: Cloud computing, the Internet of Things (IoT) and advanced fibre and 4G connectivity.

Wonders of the Cloud

In the old days, enterprises that wanted to build new applications would have to dig deep into their coffers for upfront costs, and it could take up to a good six months to put together such a project. With cloud technology, this can now be done in mere weeks and at a fraction of the price. In fact, this technology with its supreme agility allows companies to quickly redesign or reinvent their offerings as they go along. The cloud has significantly lowered the barrier to entry and simplified testing of new technologies.3

While many are familiar with software as a service (SaaS) or platform as a service (PaaS), it is also interesting that cloud services have evolved to include desktop as a service (DaaS), storage as a service (STaaS), containers as a service (CaaS) and more. Welcome to the ‘everything as a service’ (XaaS) era, where there is something to suit every business need.4

In Malaysia, a large chunk of enterprises are still in early stages of cloud adoption, mostly ad hoc or opportunistic use of infrastructure and non-critical cloud services, due to a preference for legacy architecture. In times of crisis like these, the few businesses that have migrated just a quarter of its IT assets to cloud and XaaS have the chance to scale to 50 percent or greater over the coming year5 because of its ‘support anywhere, anytime’ model, allowing for built-in business continuity through a variety of unique situations and events.

The Internet of (Every)Thing

Complementing cloud computing is the advent of low-cost IoT sensors that enable sophisticated data-gathering and analytics capabilities, making it possible to build smarter supply chains, manufacturing processes, and even end-to-end ecosystems in this Industry 4.0 era. One industry analyst6 has predicted that the global use of IoT is expected to grow at a compound annual growth rate (CAGR) of seven percent from 2018 to 2023, reaching a value of US$394.4 billion (MYR1.72 trillion).

Sensors in manufacturing equipment, for example7, can monitor and send alerts when parts need maintenance. In agriculture, sensors can provide information on soil temperature and moisture that helps in the analysis of agricultural production. Vehicle tracking sensors can monitor a vehicle’s vital information, such as vehicle’s location, mileage and engine health. Smart water sensors meanwhile can track water quality, temperature, pressure, consumption and more.

In Malaysia, we can expect exponential growth of the IoT market beyond 2020 and reach a staggering RM42.5 billion in 2025. Technology opportunities that can be created by IoT are concentrated in applications and services, and analytical related technologies, with forecast technology opportunities amounting to RM34 billion in 2025.8

Ubiquity of Connectivity

One outcome of Covid-19 is realising the importance of staying connected due to movement restrictions. Many collaboration tools and video conferencing apps have seen a huge increase in uptake for both business and personal use. In addition to remote working is remote learning with events going virtual. Tying all this together is high-speed connectivity. As of today, some 74 percent of Malaysia is already connected with high-speed 4G mobile service9. As it stands, cloud computing and IoT are already leveraging 4G networks to deliver various services to enterprises and government in Malaysia. Imagine this scenario when 5G is eventually launched.

The launch of the National Fiberisation and Connectivity Plan (NFCP) by the Government was a significant milestone, aimed at providing more Malaysians with robust, pervasive, high-quality and affordable connectivity to bolster access to digital services, bringing us closer to the country’s IR4.0 ambition.

Our transition into the digital economy will need a robust network infrastructure for both fixed and mobile connectivity. We can certainly expect data traffic to continue to increase especially from the use of new applications, enterprise mobility solutions, and new technologies like 5G that can bring benefits to entire industries such as manufacturing, healthcare and agriculture.

Retail: The powerful online-offline combo

The SARS pandemic of 2002-2004 was responsible for catalyzing the exponential growth of Alibaba, catapulting it to the forefront of retail in Asia10. Once the Covid-19 pandemic subsides and movement resumes to normal, we will go back to selling through experiences – still very relevant because consumer expectations are always evolving. They want convenience, better value, excitement, relevance, social connection and more. They want to touch, feel and experience services before they commit. Therefore, retailers need to adopt an online-to-offline (O2O) strategy for a seamless combination of digitally-driven channels and personalised services. With cloud, IoT and connectivity, they can.

In this instance, a retailer could develop cloud-deployed apps to give customers a peek into their promotions and customised offers. Meanwhile at the store, automation for increased efficiencies would be the focus, including AI for inventory management, robot associates, cashierless checkout and interactive touch-screen display.11 Coupled with real-time cameras and retail analytics, a store would be able to discover customer demographics and sentiments, time spent in-store, map zonal journeys and detect which part of the store they engage most in. This helps a retailer identify actionable insights to help them improve their business.

Embarking on your digitalisation journey

Thankfully today, enterprises that want to level up their business game through digitalisation do not have to do it alone as they can engage service providers that have not only the resources but the expertise to deploy end-to-end solutions and implement such technology.

This is where co-creation comes in for the innovation of new solutions. Using methods such as design thinking, such partnerships have the ability to bring in different kinds of expertise for prototype solutions, testing and iterating these solutions until they find the right answer to solve challenges.

Cloud, IoT and advanced analytics powered by reliable fixed and wireless connectivity are pivotal parts of this disruption and it begins with the mindset that technology can help. Since the barrier to using such technologies is low, enterprises can do testing and proof of concept before full deployment.

Partnerships with service providers can help take the complexity (and anxiety) out of the equation, and let businesses focus on what they do best – managing customer experiences and ensuring that their business is run efficiently!

References:

1 Digital Transformation to Contribute US$10 Billion to Malaysia GDP by 2021

2 SME Corp targets digitalisation of all SMEs by 2024

3 IDG-Accenture Survey of Decision Makers

4 What is XaaS?

5 Doubling down on digital transformation during the coronavirus pandemic

6 APAC to Lead Global IoT Spending

7 GSMA Mobile IoT Case studies

8 Malaysia Strategic IoT Roadmap

9 Mobile Economic Impact, Malaysia (March 2019)

10 COVID-19 will fuel the next wave of Innovation

11 Retailers shift to meet supply chain, fulfillment, and digital experience needs

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