What separates leaders from laggards in digital transformation
Singapore, June 13, 2016
Business leaders in Singapore are recognising how digital transformation can help their companies innovate, grow and better serve customers.
A 2015 survey by NCS of Singapore-based firms found that more than three-quarters (77 per cent) of senior IT executives believe digital transformation will be vital for future business growth. Across organisations in government, financial services, healthcare, education and other sectors, executives said their businesses are looking to new cloud, mobility and digital initiatives to help retain customers, improve innovation and better manage operational costs.
Of course, each industry faces its own unique challenges. Singapore’s financial sector, for instance, has a special need to boost competitiveness and resilience in light of some of the recent stresses it has seen. Brand marketing professionals, on the other hand, say one of their greatest obstacles is finding and hiring qualified digital talent and getting HR to better understand the need for such skills.
Change boosts potential for growth
Whatever the industry, companies that can offer new, cutting-edge services and attract new customers are likely to see greater potential for growth than less innovative competitors, analysts believe.
For example, analyst IDC recently predicted that – over the next two years – 80 per cent of B2C companies in Asia-Pacific will transform their “digital front doors” to support anywhere from 1,000 to 10,000 times as many customer touchpoints as they do today.
“The new hyper-digital era presents opportunities and competition/challenges that go beyond geographic and industry boundaries,” said Sandra Ng, IDC’s Asia-Pacific practice group vice president. “This is where scale becomes the competitive ingredient for the digital enterprise.”
Another analyst organisation, Forrester Research, found that more than one-third (34 per cent) of Singapore’s financial services revenues in 2015 came from digital products and services. By 2020, that figure is expected to pass the 50 per cent mark. The result, analyst Dane Anderson believes, will be a “digital arms (and capabilities) race against a new breed of competitor”.
The rise of digital-savvy customers
Demand for new and better digital services will continue to grow as businesses see ever more digital-native and digital-savvy customers, consultancy Deloitte says. By 2025, it predicts, 75 per cent of consumer spending – a total of US$2.5 trillion – in Australia, Hong Kong, Malaysia and Singapore will come from such customers.
Changing customer expectations are driving more businesses to adopt a variety of digital technologies, from wearables and multi-channel engagement platforms to cloud orchestration and cognitive analytics. Deloitte sees this trend across industries in the Asia/Pacific region but notes that some sectors are “much quicker in jumping on the digital bandwagon and adopting the technology trends”. Among the most-digitised leaders, it says, are consumer businesses, life sciences and healthcare organisations, and technology/media/telecommunications providers.
“This can be attributed to combined factors of change in end-consumer expectations and cost pressures, as well as the nature of the industries,” Deloitte notes in its report.
Leaders are ‘digitally enabled’
In other industries such as financial services, new and digitally agile players – so-called fintechs – pose an emerging threat to established banks and insurance companies. Deloitte divides today’s financial businesses into three categories: digital insular, which have been slow to pursue digital transformation; progressively digital, which have moved forward gradually; and digitally enabled, which are companies with digital-based business models, products and services. Leaders clearly fall in the last category, while laggards would be found in the first.
So who is doing what in Singapore? According to the Asian Financial Services Congress, one leader is DBS Bank, which recently won in three categories of the organisation’s Financial Insights Innovation Awards. DBS was named a leader in corporate banking for its use of text analytics for lead generation, and also took the titles of best bank in Asia-Pacific and Asia-Pacific leader in digital transformation. The bank this year also launched a new app – DBS digibank – designed to provide customers with a “mobile-first” experience.
Meanwhile, in the healthcare sector, Singapore’s Integrated Health Information Systems is helping hospitals across the country share patient information more quickly and improve care through desktop virtualisation, while many other organisations are introducing new mobile services to provide better access to medical support from any device. However, the industry will have to do even more in the face of multiple pressures, including an aging population and rising patient expectations.
The national postal service is also looking to new technologies to meet changing customer demands. Singapore Post has overhauled its systems to enable its carriers to track and confirm deliveries in real time via mobile devices. Its digital transformation has also made possible other new services such as its vPost virtual post box.
Ever-increasing digitisation of nations, economies, industry ecosystems and enterprises, IDC’s Ng said, is “pushing new competitive benchmarks in areas of business process excellence and new monetisation/business models”.
Whatever industry it operates in, the key for any business that wants to remain competitive today is to – as IDC says – “transform or be left behind”.