The past couple of years have seen “digital transformation” as a buzzword coming to the forefront, with everyone in the business world, from CEOs of companies to business analysts, trying to dissect the challenges and opportunities that digital technologies have to offer.
From security concerns to understanding the impact on big data and the Internet of Things, there are various aspects of digital transformation that have been brought to light, yet there are others that have also been understated during these discussions in the boardroom.
We have also all seen digital disruption influencing the way organisations in the Asia Pacific and Japan (APJ) region operate and conduct business today. This trend will continue to make waves this year, almost to the point of being digital tsunami.
On top of this, as I have travelled around the region to meet customers and partners, I have noticed that while a growing number of businesses in APJ have embarked on the digitisation journey, most continue to struggle with fully optimising the potential of digital technologies and making digital a core aspect of their organisational culture and operations. Based on these observations, here are three key areas for business leaders to focus on in 2016 to help them gain the maximum value from the digital economy.
Keeping on the path to business transformation
Digital transformation is the ultimate challenge in change management. It impacts not only strategic positioning but tasks, activities and processes at all levels of an organisation, and even beyond to the extended supply chain. In 2016, leaders must constantly monitor and challenge their organisations to be more adaptable and adopt digitisation practices in a timely manner.
The status quo will not exist for long, either. Leaders should also understand where and how the fundamentals of their current operations must change to adapt to the emergence of more agile digital star-ups and new digital business models. No one can afford to ignore new digital disruptors. Some will partner with the upstarts, others will create similar services that are perhaps cheaper or better, while still others will reinvent themselves with a different value proposition.
The right type of talent
Digital technology has become so pervasive that employees with the skills to take advantage of it will be needed well beyond the information technology (IT) department, across all industries.
Recruitment staff will increasingly look to fill functions such as operations, marketing and customer service with people who not only know how to use a desktop computer for e-mail and document creation, but who are comfortable with using the mobile, social and analytical tools that companies need for digital transformation.
Coveted skills could include understanding what data visualisations mean, coding, the art of creating good infographics, videos, and presentations, website design, and social media savviness.
Many of these new competencies are often overlooked as they are traditionally not considered to be necessary job skills and are rarely found in academic curricula in APJ.
This reality is echoed in Capgemini’s estimates that only a third of over 4.4 million IT jobs created in 2015 around big data opportunities will be filled.
The International Labour Organization has also noted in its Key Indicators of the Labour Market report for 2015 that there is a mismatch between skilled persons and the number of available jobs that match their competencies and expectations. Organizations will have to address the challenge by developing existing talent even as they move forward on digital projects this year.
Supporting automation
The Internet of Things (IoT) has generated excitement over the past few years, with governments, start-ups and established businesses in APJ all placing their bets on the industry’s growth.
The smart buildings in Hong Kong Science Park, Thailand’s Provincial Electricity Authority Smart Grid Pilot, and Singapore’s smart water sensors for water management were all lauded by research firm IDC in 2015 as outstanding smart city initiatives.
While IoT certainly has had significant buzz well into the beginning of this year, developments on interoperability and hardware have progressed to a point where some of the earliest investments have begun to pay off1, with smart thermostats, wearable fitness devices and other innovations developing comprehensive ecosystems and gaining significant market share.
Early movers to develop supporting software for the IoT could reap a significant competitive advantage. Software that analyses the massive volumes of data from IoT devices and then accurately automates what is currently manual decision-making will soon come into the limelight. This is an opportunity for technology companies, according to Singapore’s Ministry of Communications and Information, as well as for enterprises to research and develop edge analytics, streaming analytics, decision support and other automation software.
Organisations will thrive in 2016 and beyond by going future-ready. They have to understand how the drivers, threats and opportunities in the new digital landscape will impact their businesses. Preparing the ground for success will be critical.
The importance of human resources cannot be underestimated, especially in the APJ population, which has such a wide range of skillsets and work experience, plus a large population of ambitious youths who are poised to enter the job market.
Adopting the right best practices for digitisation in increasingly globalised and regionalised businesses will be essential, as will implementing cost-efficient, open and easily scalable technology. This is my recipe for providing the ideal environment for leaders working on optimising strategy and leading change in 2016, the year of the digital-first customer.
