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Three Reasons Why Malaysian Businesses are Not Reaping the Benefits of Technology

Faced with an unprecedented disruption to business this year, many organisations around the world have turned to technology to keep their operations going.

In Malaysia, as is elsewhere, efforts to digitally transform have been accelerated to cope with abrupt changes and prepare for a post-Covid 19 new normal that organisations had never anticipated.

While technology has the potential to pivot Malaysian organisations towards innovation and new business models, what is needed is strategic and mindful integration of these technologies.

A recent IDC survey commissioned by Maxis1, revealed several reasons why many Malaysian organisations have not reaped the full benefits of digital transformation (DX). Here are the three most prominent reasons:

Reason 1: Many only have tactical plans for DX

Meaningful change from DX efforts requires a long-term approach that emphasises the continuous development of digital capabilities and transformation. In other words, no stop-gap measures.

Currently, four out of five organisations in Malaysia have yet to create a holistic DX strategy that looks ahead more than 24 months, according to the study. They have not envisioned how technology can reorient their organisations to become more agile, innovative, responsive, and customer-centric in the long-term.

Instead, many are spending their time on tactical plans that achieve small successes in the short-term. As a result, it may be tough for long-term changes to take root and spread in an organisation.

Covid-19 has disrupted business as usual but the ensuing situation brings opportunities too. It’s an opportunity for organisations to take stock of how ready they are to transform, re-align their IT and business goals, evaluate data activities to ensure they support long-term strategic priorities, and plan a strategic roadmap that helps them close their digital gaps.

Reason 2: Innovation happens in silos

Digital transformation in Malaysian organisations has also been held back due to digitalisation efforts taking place in silos.

About half of the Malaysian organisations in the IDC survey say they still operate on a central special-projects team, while exploring DX for their organisations in a structured and formal way. In other words, core IT and digital innovation platforms are operating via connected islands or side-car approaches. This approach limits the reach of any innovation because innovation does not permeate from the ground up, across the organisation.

To address this, organisations need curated and integrated solutions to coordinate different teams’ efforts with that of line of business.

Siloed innovation could also have arisen because of the ways organisational systems have been set up. In another recent IDC survey2 , Asia-Pacific CXOs claim that the top reason inhibiting their organisations’ development of a dynamic work model were disjointed and fragmented systems. In response to this, they are now searching for applications that can be managed in a single platform to drive effective collaboration and productivity.

Innovation happens in silos
Reason 3: Outdated KPIs are hampering DX efforts

Misalignment of the key performance indicators (KPIs) associated with DX efforts are preventing organisations from moving ahead in their DX journey. Many IT organisations still lack the ability to run IT as a service business and address the business value of their contribution to enterprise objectives.

In Malaysia, 47% of organisations use traditional KPIs to measure DX. Traditional IT measurement, with its long-term focus on efficiency metrics for managing infrastructure, applications, and components, is no longer adequate. Using the wrong yardstick to measure the outcome of DX initiatives often leads to the loss of departmental and executive support after an initial test run.

To prevent this scenario, organisations have to develop new IT measurements that broker, integrate, and orchestrate IT ‘business-oriented’ services empowered by third-platform technologies (e.g., cloud, mobile, and big data and analytics) as well as innovation accelerators (e.g., Internet of Things [IoT], next-gen security, and robotics).

Preparing for the new normal

By now, many organisations realise that the future will be drastically different from what they had imagined at the start of 2020. What worked before will likely not work now.

To overcome these challenges, organisations have to not just harness technology for change, but make sure that its integration is well thought through and addresses the reasons hampering earlier efforts. They need to review their strategic, long-term goals to streamline DX efforts, while ensuring that new digital investments are deployed successfully. There has to be more strategic integration of digital technologies than ever before.

Of the enabling technologies available today, IDC examined four in the IDC-Maxis survey that it believes are core to DX in Malaysia.

  • Cloud enables organisations to scale on-demand to be more agile, improving cost reduction and operational efficiency, while reducing time-to-market delivery for new products and services
  • Software-defined networking provides real-time provisioning and improved network visibility and security, which allow for easier and faster roll-out of innovative services while ensuring a high-quality end-user experience
  • IoT delivers real-time insights to organisations to improve tracking of assets, reduce inventory, time to market, and downtime due to maintenance
  • Cybersecurity protects enterprise data and networks from attacks and unauthorised access, mitigating the associated costs of dealing with attacks

To find the adoption rates of these four technologies among Malaysian organisations as well as how to overcome the challenges associated with their integration, read the full IDC InfoBrief.

1. IDC-Maxis Digital Technology Assessment 2020, n=300
2. IDC APJ CXO View of the Future Enterprise Survey, 2020, n=211