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Skills gap, high costs delaying digitisation for Malaysian businesses, notes Microsoft study

AvantiKumar | May 19, 2016
Though 85% of Malaysian businesses say digitisation is essential, Microsoft’s inaugural 2016 Data Culture study finds that just 44% have a limited digital strategy in place.

Microsoft Malaysia Digital Culture study

Photo - (From left) David Chmelar, CEO and co-founder of iPrice; Michal Golebiewski, Chief Marketing & Operations Officer, Microsoft Malaysia; Takeshi Numoto, Corporate VP, Cloud & Enterprise Marketing Group at Microsoft Corp; Ir Dr. Karl Ng Kah Hou, Director, Innovation Capital Division, Multimedia Development Economy Corporation (MDEC); and Dr Dzaharudin Mansor, National Technology Officer, Microsoft Malaysia.

 

According to cloud and productivity solutions company Microsoft's 2016 Data Culture study, high costs, lack of digital skills, fear of change, and funding are the main barriers holding Malaysian organisations from a successful digital transformation.

The inaugural study showed that 85 percent of Business Decision Makers (BDMs) in Malaysia felt that it was important to drive an agile business that is data driven, yet only 44 percent are starting to embark or have a limited digital strategy in place.

Microsoft Malaysia's national technology officer Dr Dzaharudin Mansor said the study also revealed that even though Malaysian business leaders felt there were clear benefits to having a data culture, there are gaps that needed to be addressed before doing so.

Dr Dzaharudin said that despite the benefits of adopting a data culture, the study also noted areas, which needed to be addressed for Southeast Asian businesses to realise their full potential as a data-driven organisations. These include:

- Creating an analytical workforce: 94 percent of Southeast Asia's business leaders agreed that it is important to have a data-savvy workforce. However, there are skillsets and culture gaps that need to be addressed in order for organisations to fully embrace a data culture. Only 39 percent of business leaders in Southeast Asia polled felt that they have employees who have relevant skills to combine data to help identify business outcomes

Change: 42 percent of respondents also cited fear of change as a barrier to embarking on digital transformation

- Building infrastructure for data agility: 91 percent of respondents agreed that they need to drive an agile business that is data driven. However, they perceive their capabilities in infrastructure to be lacking. Less than half (46 percent) of business leaders in Southeast Asia felt confident that their existing data infrastructure scales with business growth

In addition, just 37 percent of business leaders in Malaysia said that their "data is accessible across mobile devices today" - a definite barrier in democratising data access in Malaysia where mobile devices penetration is expected to reach 13.7 percent by 2019

- Data governance for collaboration: 91 percent felt that data driven collaboration across the organization needs to be enabled. However, a moderate 56 percent see the need for access to data to be provided to a broad spectrum of relevant roles within the organization. For the democratization of data to happen, there needs to be comprehensive data governance for security and privacy.

Only half of the business leaders polled indicated that they have invested in tools for its workforce to help drive business insights across functions and departments.

The study polled 940 business leaders from medium to large companies in 13 markets in Asia, including 269 senior business leaders in Southeast Asia (comprising Indonesia, Malaysia, Philippines, Thailand and Vietnam).

The benefits of digitisation

"Digital transformation is beyond adding a layer of digitization to your business - it's about bringing together social, mobile, analytics and cloud technologies together," said Dr Dzaharudin.  "And data is at the centre of this - knowing your customers, recognising new opportunities, or streamlining processes will become a staple part of business strategy."

"As a case in point, IDC Asia/Pacific predicted that by the end of 2017, 60 percent of APAC 1000 (A1000) enterprises will have digital transformation at the centre of their corporate strategy," he said.

Some of the benefits that these Malaysian BDMs felt when driving a data culture includes:
- Better business continuity
- Real-time decision making
-  Efficiency in operations
-  Improved processes
-  Improved customer satisfaction and retention

 According to the study, 85 percent of Malaysia's BDMs agreed that to drive a successful data strategy, an organisation should have a formalised role, of which 41 percent agreed that a clear direction should come from its chief executive officer (CEO).

 "Business leaders, especially the C-suite, have a key role in driving change within the organisation," said Dr Dzaharudin. "It is no surprise that the Asia Data Culture Study showed that business leaders feel that CEOs should champion the new data culture."

"It was important that the values of a new data culture are driven and accepted across all levels of the organization. This starts with the democratising of data through technology so that everyone can access and are empowered to make decisions which create value for the organisation," he said.

New data culture

The study showed that businesses rated data visualization, predictive analytics and cloud data storage as important data capabilities for them in the next 12 to 18 months. 

"Starting with a pilot and learning from that is key to a successful, longer term journey," said Dr Dzaharudin. "Customers need to think about new scenarios which will provide new insights and new opportunities. They need to ask different questions about their business, not just based on hindsight but about the future. Technology has evolved so much that this is no longer science fiction but is achievable today."

 "Organisations are now able to embark on their digital transformation journey that brings their data from hindsight to foresight, and to empower business leaders to deliver enhanced value in this new economy," he said.
 
 Also present, David Chmelar, chief executive officer and co-founder of iPrice, said, "Understanding our diverse customers' needs and wants is crucial for us, especially since we operate out of Malaysia and apart from Malaysia have presence in Singapore, Indonesia, Thailand, Vietnam, Hong Kong and Philippines. We need to understand the different profiles of our customers, down to their likes and preferences, while keeping in tune with the trends that take place in the markets that we operate in."

"For instance, we tripled our revenues in health and beauty category when we spotted the rise of Korean beauty products in our data. Capturing this trend early allowed us to have a head start. It's clear to see here that data is truly king," said Chmelar. "Microsoft's technologies such as PowerBI enables us to analyse this data in a quick, efficient, and timely manner."

Microsoft's Dr Dzaharudin added: "This is what a modern data culture is about. It isn't just about deploying technology alone, it's about changing cultures so that every organisation, every team and every individual is empowered to do great things because of the data at their fingertips."

 

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