Amidst the pandemic this year, many businesses suffered losses and those who survived relied heavily on online avenues. It is crucial to understand that while digital transformation may have presented itself as a quick solution to a crisis, it is much more than that. Businesses need to ask themselves how can we embrace digitalization to future-proof and move forward in a post-pandemic world?
To explore this million-dollar question, we draw from a session with Florian Hoppe — Partner & Digital Practise Lead, Bain & Company at ADA’s Virtual Conference.
- Localize! Not every recovery trend out of China will be applicable for this region
- COVID-19 has accelerated digitalization but that doesn’t mean the challenges faced by the business world have disappeared
- Given finite resources, these are the 4 solutions for a resilient future your business needs to focus on
We look at how to overcome the leading barrier to digital transformation
Emerging trends in Southeast Asia
This year the executive focus on digital transformation has increased by over 40% as compared to the previous year with a greater focus on cloud solutions, virtual engagement and digital marketing, automation as well as cybersecurity. But what does this mean for Southeast Asia?
Cloud is on the rise
Cloud companies are on the rise with growth trends projected across IaaS, PaaS and SaaS in Southeast Asia, according to IDC findings.
The biggest challenge when it comes to implementing cloud in this part of the world will be the conflicting laws and regulations within each country that would make it harder to navigate in comparison to marketing like Europe, China or even the US. Hence there’ll be a distinctive lean towards localized cloud solutions in this part of the world.
Online spend is surging, making digital marketing key
According to a Bain and Facebook study, it was found that while 47% of consumers decreased offline purchases, 30% increased their online spending. As more consumers shift online, digital marketing is pertinent for reaching target consumers and scaling. The biggest struggle comes from transparency and fraud, while Southeast Asia plays catch up with the rest of the world in standards for digital marketing and the use of data platforms.
Increasing interest in AI and Big Data
Industry stakeholders have started identifying the potential of AI and Big Data. A study by EDBI and Kearney on the state of AI readiness in the region revealed an increasing momentum on the adoption of AI use-cases in various industries. However, adoption is still well below the global average due to a lack of sharp business cases, robust data ecosystems, and talent.
Impact of COVID-19 and challenges in Southeast Asia
Despite making significant strides towards digitalization over the past few years, many traditional businesses in Southeast Asia still lag behind. Seven out of ten companies risk falling behind due to underdeveloped digitalisation strategies, or weak execution plans according to a study by DBS Bank.
Now, business strategies are being led by consumers driving the need for long-term data-driven solutions for operations, automation and supply chain management. It is important to understand the impacts of COVID-19 to be able to lay a solid foundation.
eCommerce is here to stay
With an increase of over 100% in eCommerce during COVID, it is clear that there has been a major shift in consumer behaviour. People have switched to online shopping and 76% planning to stay there. The leap to digital for businesses has not been as easy with 40% of consumers still citing ‘issues with delivery’ and a 120% increase in delivery times. This leads us to the next point: automation is a necessity.
A dire need for automation
During the coronavirus crisis, businesses were suddenly disconnected from their customers and were forced to switch to eCommerce almost overnight. Creating a whole new set of challenges for businesses to tackle in terms of speed and scale which automation can solve. In Southeast Asia, cheap labour cost and antagonistic views towards automation have been barriers to implementation. Businesses often overlook how automation can supplement the existing workforce like how Unilever uses automation to optimise transportation routes in the new world of eCommerce.
Need to optimise supply chains
Another lesson learnt during COVID-19 was the need to optimize supply chains. During the crisis many businesses have stepped up to fill the gap, L’Oreal started producing hand sanitisers, Lazada started shipping fresh produce, Meenaclick in Bangladesh started helping with the sale of onions. Each has been a testament to how agility and collaboration is key to a strong supply chain.
Building resilience for a brighter future in a post-COVID era
Agility is the way forward and digitalisation is the key. Companies that were open to adapting, survived. Chope — they pivoted from booking restaurants to food delivery while ClassPass pivoted from offering gym memberships to home work-out videos.
It is important to understand that — pandemic or no pandemic — your business model must be relevant. And, the only way to ensure that is to embrace change and evolve. Like how AirBnB shifted to providing “Experiences” and PETRONAS created new uses for their physical stores. Businesses need to ask themselves: What’s our value proposition? Where are we selling it? Is there a consumer-market fit? Who are we selling to? How do we profit?
This is where integrated data-driven digital approaches can help businesses re-evaluate their core ideas and align operations in sync with market trends and demands. AirAsia used their data to raise a billion dollars for their digital pivot while a Global NGO used data to raise funds during the pandemic.
Lastly, secure future-ready digital resources either by hiring like IBM’s 300 digital workforces or find the right partner that aligns with your digital transformation goals.
Evolving a business model with clear focus areas, being open to agility and embracing the “new normal” for a resilient future is crucial. At the core of it all lies digital transformation.
This article was contributed by Summer Choo, Country Director, Singapore, ADA
About the author
With over 15 years’ in global MNCs and her own start-up agency, Summer has vast experience in business management and is an advocate for data and technology propelled solutions. At ADA, she helms business development and optimisation of digital initiatives powered by data and technology for regional brands focusing on go-to-market strategies and acquisitions. Supported by a robust data engineering team, Martech analysts and automation partnerships, she drives holistic business solutions for transparent outcomes.
In her other life, she’s a yoga enthusiast and has a great appreciation for coffee for someone who is quite a caffeine intolerant. Coffee workshops or yoga retreats are on her holiday plans whenever possible.