“If there’s one thing that’s certain in business, it’s uncertainty.”
These words by the eminent author and speaker Stephen Covey ring especially true for businesses in the present time. Many enterprises across Asia-Pacific are operating in an environment of uncertainty as they continue to navigate the economic effects of the pandemic. Even as they deal with staff shortages, supply chain disruptions, and rising inflation, geopolitical tensions are only adding to that uncertainty.
While uncertainty reached a peak during the pandemic, it has actually been on the rise over the last few decades. According to researchers from the International Monetary Fund and Stanford University, uncertainty has been increasing for more than 30 years. This trend will likely continue.
But the pandemic also showed us that innovation, through digital transformation, is critical for an enterprise to navigate uncertainty. Indeed, adopting new digital technologies helped enterprises become more agile and responsive to changing customer expectations and market demands. Those with strong digital foundations were able to better connect their people, systems and processes and pivot their operations.
DX enables innovation
Organizations that achieve a greater level of digital transformation (DX) maturity are in a better position to innovate and survive an economic downturn. This can help them take advantage of improving conditions during an economic recovery. As noted by McKinsey, organizations that focused on innovation even during the global financial crisis of 2009, emerged stronger and significantly outperformed the market over the subsequent years.
So even in the rising tide of uncertainty, enterprises focused on innovation are increasingly investing in new technologies to improve their DX maturity. According to the IDC Worldwide Digital Business Spending Guide, spending on DX is forecast to reach US $2.8 trillion in 2025, more than double the amount allocated in 2020.
Across Asia-Pacific, organisations are innovating to meet the evolving needs of the market. And they are taking advantage of unique business opportunities to leapfrog companies in Western markets. For example, when customers shifted from cash transactions to mobile payments during the COVID pandemic, it significantly increased digital wallet adoption. This has led some markets in the region to develop more advanced payment infrastructures than those in Europe or North America.
It is this brand of innovation that is attracting record-breaking investments across the region. The number of unicorns in Asia Pacific grew by more than 25% in 2021, when the region attracted almost a third of global private investment. They represent dynamic sectors like fintech, artificial intelligence (AI) and machine learning, e-commerce, health tech, and supply chain.
Technology is also helping bridge the digital divide in many markets. For example, 4G networks and high smartphone penetration in markets like India are driving both digital and financial inclusion. People living in regional areas who once had limited access to many products and services can now make mobile payments and access services online. This has helped many businesses tap new customer segments, helping soften the impact of the pandemic. With the advent of 5G, businesses can now build out these new systems to connect with customers even better.
The many benefits of transformation
Thanks to the growth of digital, enterprises are also having to navigate significant shifts in customer expectations. Employees now expect a hybrid workplace. Migrating systems to the cloud is helping meet these major shifts in expectations.
Cloud offers significant advantages, like greater operational efficiency, faster app deployment, and increased flexibility and agility. The benefits of cloud make the investment case even as the global economy shows signs of slowing. According to Gartner, public cloud spending is slated to reach a total of US $591.80 billion in 2023, a 20.7% increase from US $490.30 billion in 2022.
of CIOs believe that multi-cloud can accelerate innovation in their companies.
This investment in cloud is delivering plenty of success stories in Asia-Pacific. By migrating its ERP system to the cloud, Thai retailer Siam Global House accelerated its business decision-making in the face of increasing e-commerce competition. The move helped reduce business costs by up to 50 per cent. Siam Global House has also gone from being only a consumer of cloud services to an active cloud services partner to other Thai businesses, opening up a new revenue stream in the process.
Meanwhile In Australia, Domino’s Pizza was able to transform its ordering process by rolling out SD-WAN to more than 720 stores. Siam Global House and Domino’s reflect the DX maturity in the retail sector – with more than half of APAC retailers saying they have an integrated and transformative approach to DX.
But retail isn’t alone. When Indian Bank was directed by the Government of India to merge with Allahabad Bank, a suite of transformational cloud-based technologies enabled a smooth amalgamation, which in turn lifted profitability and service quality.
Building a roadmap for the future
To accelerate digital adoption, organisations must understand their DX maturity. To help build this roadmap for the future, an organisation needs to undertake some solid evaluation and invest in the right technologies.
While planning its investments in the current economic climate, it is essential for an organisation to focus on technologies that can help it optimise operations. Doing this can help improve efficiency, cut costs, and enable it to do more with less.
Key focus areas should include:
Multi-cloud: Deploying workloads to multi-cloud can deliver operational agility, scalability, and resilience. Avoiding lock-in with a single cloud services vendor enables flexibility and can deliver cost savings. Deploying the right workload on the right cloud, enterprises can get on top of complexity and become ‘cloud smart’.
Edge: Edge computing offers enhanced data management and compute power closer to the operating environment and end user. Managing and processing data at the edge can support better decision making and improve application performance for today’s increasingly distributed enterprises.
Security and disaster recovery: Good security and disaster recovery solutions reduce business risk and disruptions to improve business continuity and performance. Using sovereign clouds can de-silo critical data while ensuring regulatory requirements are met.
Industry 4.0: Technologies like Internet of things (IoT) sensors and smart devices can deliver real-time data and remote operations capabilities, along with predictive maintenance of assets. This can improve performance and reduce costs.
By having a clear DX roadmap that defines high priority use cases and outlines key technological implementations, an enterprise can improve its digital maturity. This can enable it to keep innovating and survive the uncertainty during a downturn. Such an enterprise will be well-positioned to strongly perform in an economic recovery.