Digital Transformation for growing SMEs in Malaysia

But today the situation is different, because of the huge rate of improvement and evolution of Technology that is taking place. This is also accompanied with the many used case that is being developed by Technology players. As a result of this, we are seeing a big shift in the trend towards the reliance of Information Technology as a driver and catalyst for growth. The capability of Mobile devices, semiconductor chips, Cyber security, Enterprise grade applications, Big Data applications and Social Media are all tools that are contributing continually to the Business world. These would not be possible however without Cloud Technology tools and applications forming the fundamental platform.

Clouds are a natural phenomenon. It affects everyone in a positive and negative way. Recently clouds have been a major cause of flooding and major rain falls in Malaysia. We understand that the severe volatility of the current climate is also caused by the failings of the community. Cloud is a term that have been since long adopted by the Technology and Business Community. Cloud as the word suggest may imply that technology provisioning simply sits out of thin air due to its obvious nature that everything is connected wirelessly. However, there is much more that is happening in the background than just wireless connectivity.

Of late we are seeing many large IT companies competing to seek dominance over the Supply of Cloud Technology and its related services. Many acquisitions of Cloud businesses are also taking place and several Cloud companies have also seen attaining new Market Valuations extending to the Billions of dollars. Cloud Technology is contributing significantly to Industries and Business and its impact is continuing to grow positively. The primary contributions of Cloud Technology to Business in their Digital Transformation journey are:

1. Efficiencies of Scale 2. Product innovation 3. Access to markets and resources 4. Overcoming of various barrier of entry and growth 5. Democratisation of business.

To paint the current landscape of SMEs in approaching Digital Transformation, there over 1.15 Million Small and Medium sized Enterprises (SME) in Malaysia, If we were to conservatively derive a 1% number from this population, that will be 11,500 companies. With this as a base figure, we can assume that there are at least 10,000 companies in Malaysia having a serious consideration to embark on a Digital Transformation roadmap in Malaysia.

SMEs are exposed to themes encouraging them to digitally transform such as Intelligent Enterprise, Industrial Revolution 4.0, Big Data and Internet of Things. But the content and education that these themes bring are not sufficient for them to assess readiness and compose a comprehensive road map for their organisation. With the introduction of 5G, rise of Cloud Technology, increase number of Technological startups, this proves that the current environment is providing the opportunities for these companies to move towards Digital Transformation.

It is also important to highlight the challenges that SMEs face in responding to the call of Digital Transformation. Firstly, to implement and execute a Digital Transformation road map, takes years and this journey is expensive and complex, as perceived by SME owners. Secondly, many companies that I encounter have expressed that Digital Transformation theme is a nice to have, but amidst the current landscape and COVID situation, the utmost business priority is to stay afloat and survive. Thirdly, owners of SMEs know the importance of Digital Transformation, but don’t have access to trusted partners and consultants. Finally, there are a lot of cases where Digital Transformation projects fail, due to lack of competence from partners and resistance from staff.

To anticipate growth and leverage on the advantages of Digital Transformation, it is important to keep a clear focus and set goals based on opportunities at hand. Firstly, the cost of implementing a Digital Transformation roadmap is reducing via a fixed scope and fixed cost model. This is because there are many used cases available and increasing number of mature solutions available in the market that currently makes implementation much more templatised and smooth. Governments are also offering Grants to aid this process. Thirdly, the accompanying services and offering from Cloud technology providers and their rate of innovation is also a huge contributing factor to the SME’s ability to scale their business. Finally, the firming of Enterprise Resource Planning (ERP) software as a core and backbone to SME’s Digital Transformation strategy is becoming more and more crucial and mature. The available options for ERPs are plentiful in the market today.

With this forming the background, there are much to be expounded and discussed specifically on this topic by industry thought leaders and players in relation to Digital Transformation of growing SMEs in Malaysia.