The path to digital transformation


25 July 2016
Stanimira Koleva of Software AG

Digital transformation has been one of the biggest trends across the globe in 2015 and Asia is set to be on the forefront of this digital wave in 2016. With 8.6 billion connected devices and a robust digital infrastructure, most countries in Asia are on their way to implementing digital initiatives that make the most of the opportunities arising from digital transformation.

Smartphones, apps, wearables—IT moved into the everyday lives of consumers long ago. As the Internet of Things (IoT) segment grows, smart refrigerators, self-driving cars and other networked smart items will also become part of daily life. 

IT experts predict that by the year 2020, around 50 billion networked machines and devices will generate a data volume of about 40,000 exabytes (1 exabyte is equal to about 1 million terabytes)—more than five times the level in 2015. To channel this flood of data productively, companies need to evolve digitally by stripping off their stiff corset of standard software and start adopting flexible, multifunctional platforms instead.

Traditional ERP systems cannot provide the speed of process restructuring and innovation needed these days. Cloud computing and mobile applications have been highlighting the limits of the monolithic approach with intertwined software packages for some time now. Static, inflexible legacy programs make updates time-consuming and costly.

Even the concept of service-oriented architecture (SOA), which accelerates processes with flexible middleware without completely replacing the old systems, proved to be a temporary solution. As data volumes continue to grow along with the proliferation of mobile usage and broadband connectivity in the region, agile jacks-of-all-trades such as enterprise apps are taking the place of standard applications.


Entrepreneurial spirit in the digital transition

According to IDC’s Digital Transformation survey earlier this year, 34% of firms in Southeast Asia fall within the “opportunistic state” of digitalization. This indicates that by employing the right technology, organizations in the region can capitalize on the wave of digital transformation.

Entrepreneurs in the region are also increasingly gaining significance of leveraging on digitization and tapping on data streams to incorporate agility, responsiveness, scalability and innovation into their business model.

By harnessing relevant data, firms will be able to enhance business processes that serve customer’s needs faster and better with the greater differentiation and customization. However, the major challenge facing firms is extracting relevant, value rich information from the deluge of data coming from multiple data streams productively. Enterprises in the region must acclimatize themselves to a rapidly evolving digital business environment. Competitors from other region aren’t snoozing through digitization, and those who handle it better are already heading to the starting blocks.


Achieving success through co-innovation

Cultivating an ecosystem guided by a free exchange of ideas and unbridled innovation is the cornerstone of digitization. Increased collaboration between technology providers and enterprises from a cross section of industries will present businesses in Southeast Asia with opportunities to tap on a wealth of expertise, co-innovate and develop a multi-faceted digitalization roadmap.

For example, the route to digital transformation might start with designing business processes or analyzing customer data that a company has collected. Generally speaking, there is no clear sequence here: Companies provide the starting point with their IT and business activities—and the IT service provider stands by their side as a software expert.

In the face of growing digitization, firms in the region must commit themselves to a continuous process of reinvention. This involves developing digital strategies, business models, as well as the appropriate strategy for IoT and cloud computing, through the lens of digital transformation. A key thrust of the blueprint is fostering stronger relationships between IT, decision makers and software vendors in the region.

Enterprises must concentrate on planning, realizing and later autonomously developing the minimum of innovation needed. Moreover, these agile methods give the team a certain leeway to familiarize themselves with the digitization processes on their own.


A secure future thanks to digital business platforms

Digital businesses require open, fast IT. Aside from the technology being used, whether and how quickly companies develop, implement and improve promising business ideas also plays a key role in succeeding in digital era.

With increased connectivity, stronger regional frameworks coupled with a strong track record in ICT, firms operating in the Southeast Asian landscape are well positioned to harness cloud computing to improve customer satisfaction, flexibility and operational efficiency. 

Companies that unite all these factors are successful—whether as a digital player in the business world or in public administration. That and the opportunity to integrate all process controls in the backend are the advantages of the platform strategy.

A platform pursues a generic approach, so it gets by without business logic and offers functions for designing, controlling, managing and developing software. It is not about software packages, but rather about flexible, changeable, individual applications that are customized for specific needs. These include cloud-capable services, in-memory databases, and CEP, integration and process engines.

The ability for businesses to coalesce multiple platforms and other functions in modular core components that can be implemented and expanded individually is key to unlocking the potential of cloud computation. These building blocks can be assigned at different levels, such as data management and analysis, integration, modeling or process and program logic.

This offers a structure that allows companies to remain competitive while focusing immediately on known weak points and expanding the platform incrementally over the medium term.


Is SEA ready to be a frontrunner in cloud computing?

As companies in the region confront a constantly shifting digital landscape, there is a growing realization that dynamic, monolithic ERP systems lack the agility and functionality to fully exploit the possibilities of digitization.

With digital transformation set to drive the enterprise strategies of 65 percent of Southeast Asian enterprises, there is growing consensus that synergizing and integrating multiple discrete platforms is central to scaling new frontiers offered by digitization.

The adoption of dynamic, multifunctional platforms, endowed with the greatest possibly flexibility and reaction time will be the blueprint for unlocking new technologies and key to positioning enterprises in the region as frontrunners in the digital revolution landscape. 


Stanimira Koleva is Chief Operating Officer, Software AG, Asia Pacific & Japan