Digital transformation across APAC: exclusive CA interview

AvantiKumar

In a recent exclusive interview with Computerworld Malaysia, IT management solutions company CA Technologies' chief technology officer for Asia Pacific and Japan, Stephen Miles, noted that in today's application economy, Digital Transformation has reached every aspect of business, with India and China among the countries in the region seeing the most significant impact.

He said that adopting modern technology and communications to transform one or more key aspects of the business to achieve a state of digital readiness has now become a mainstream activity to drive return on investment (ROI).

Stephen Miles - CA Technologies 

Photo - Stephen Miles, Chief Technology Officer, APJ, CA Technologies

 

How do you define digital transformation?

'Digital transformation' about exploiting modern technology and communications to transform one or more key aspects of your business.

This is often associated with customer engagement, but could also be concerned with transforming your core business processes, your workforce, or the way you engage with suppliers and partners. Digital techniques can also be used to simply enhance and optimise the way you do things.

What's the overall picture we are seeing in relation to digital transformation activity across the Asia Pacific and Japan? How is this different to Malaysia?

More than two-thirds (69 percent) of businesses surveyed in the Asia Pacific acknowledge that digital transformation is important and are committed to it.

This strongly suggests that those who have yet to start on the journey see the value and are already thinking about it, and this is a scenario we are seeing in Malaysia as well.

In addition, Digital Transformation in APJ is being driven as a coordinated strategy across half of the organizations (50 percent), with many projects underway in multiple areas of the company, including customer services, sales and marketing, and product/service development.

Beyond high level revenue and profit motives, the top three drivers, or potential drivers, of digital initiatives in organizations in APJ are: improved customer satisfaction (across the world, this is the #1 driver of digital initiatives), better workforce productivity and improved customer experience.

 We therefore expect the focus on customer experience across APJ including Malaysia to increase.

As a result of digital transformation, 43 percent of respondents in APJ have already seen measurable increases in customer retention from their digital transformation initiatives and 42 percent have seen an overall increase in revenue. It pays to embrace digital transformation in the application economy.

How did Asian countries fare relative to each other? Where would you place Malaysia in this overall landscape?

On a country-level, we are seeing progress at different paces. India and China are ranked first and second globally.

The general trend that we have observed is that developed countries such as Australia, Japan, Singapore, South Korea, are at the bottom half of the table, whereas emerging markets like China and India are at the top.

 In more developed economies, digital transformation has reached a certain maturity and saturation level that businesses no longer see massive impact on their operations. This is in stark contrast to emerging markets where the effects of adopting digital technologies is still transformative.

There were also many other variables that went into scoring this on the index. This includes cultural differences, which could affect how conservative or optimistic their responses are.

In Malaysia, while we do not have the specific figures, we observed that an increasing number of companies are recognising the importance of a digital presence to customer engagement and market development.  

However, many companies have yet to actively embrace the innovations needed to deliver that transformation.

How are various industries responding to digital transformation?

From the survey, Freeform Dynamic developed the Digital Effectiveness Index (DEI) using measurements based on a combination of responses to questions about market competitiveness and business scorecard metrics (such as customer retention, customer acquisition, profitability, new income streams, share of market, overall revenue and profit).

Using this measure, a group of top-performing organizations has emerged - the Digital Disrupters, identified as the top 12 percent of respondents in APJ.

In this elite group of Digital Disrupters in APJ, or those well on their digital transformation journey, respondents are already seeing impressive business benefits, including 2 times higher revenue and 2 times higher profit growth.

And it turns out that digital disrupter have common characteristics.  They are:
- 2.4 times more likely to have advanced agile practices in place
- 2.4 times more likely to have broadly implemented DevOps
- 2 times more likely to leverage APIs for mobile app development.

We expect the rest of the companies to quickly get on the digital transformation bandwagon.

Within verticals, we see a strong showing from Telecom, Retail and Consumer Electronics firms with the public sector, consumer packaged goods and healthcare sectors definitely needing to accelerate their digital transformation further.