37 percent of Singapore executives surveyed believe the rate of change to their industry is intensifying, largely driven by digitalisation, new disruptive competitors, servitisation and new business models.
The survey indicated that Singapore organisations are responding by adopting cloud computing at a greater rate than other markets, due to its greater adaptability to rapid industry transformation.
This is according to a 'Disrupt, Collapse, Transform' study conducted by Frost & Sullivan and commissioned by NetSuite Inc. Polling 1,500 senior executives across multiple industry sectors in Australia, Singapore, U.S., U.K., Japan, Hong Kong and the Philippines, the study aimed to find out what drives disruption across all industries, and how the modern business is responding.
"Businesses based in Singapore, the trading hub of Asia Pacific, are challenged by disruptive forces that are changing rapidly and unpredictably due to shifting economic conditions globally," said Andrew Milroy, Asia Pacific Head of Research for Frost & Sullivan. "Companies need the agility to innovate; launch new products and services; deliver new revenue or business models; and access new geographical markets. That adaptability is being enabled by cloud computing - it has become a necessary response to the rapid pace of transformation."
Key factors driving industry transformation
According to the study, digitalisation was identified as one of the top trends driving change in Singapore, particularly in the media, entertainment and retail sectors. This is reflected by the fact that 69 percent of Singapore businesses now use e-commerce, an increase from 52 percent in 2009.
Almost half of the local organisations polled also identified the entry of new, disruptive competitors with new business models as one of their greatest threats, which is forcing change in the way that they interact with customers. This includes the emergence of competitors using low-cost models, for example, or those using online only distribution channels. In response, 41 percent of Singapore businesses surveyed said that they are likely to change their distribution model in the next five years.
Servitisation is another significant driver of change. Many businesses are developing the capabilities they need to provide services and solutions that supplement their traditional product offerings. In Singapore, 50 percent of manufacturers, for example, are servitised, compared to almost 60 percent in the U.S. and 30 percent in Australia, according to the study.
"There is no doubt that the speed of change in almost every industry is accelerating, but the direction of disruption is unpredictable," said Milroy. "In these circumstances, organisations need the flexibility to rapidly adapt to the changing industry environment."
Need for greater adaptability now more important than cost savings
Frost & Sullivan believes that cloud computing is both a contributor to industry transformation, as well as a necessary response for organisations to survive. The study revealed that greater adaptability to industry change is now a main driver of SaaS adoption, with cost savings and ease of upgrading becoming less important than they were four years ago.
Sign up for CIO Asia eNewsletters.