Friday, 3 September 2021
Businesses in Malaysia have now realised that digital transformation and cloud adoption is critical to their continuity and sustainability. With more people working remotely and staying home, businesses have to be nimble and adapt to the fast-changing market landscape in order to be productive and better equipped to preserve their customer base. Investing in cloud remains to be one of the most viable solutions available to small and medium businesses who want to survive in the digital economy.
It was only quite recent that digital transformation has become a buzzword for businesses across the globe. Embarking on a digital strategy not only enables internal work alignment and efficiencies, but also with faster turnaround to product development and go-to-market, companies are able to command their market effectively and reinforce brand value.
Realistically, it used to be that the digital transformation playbook was only accessible to organisations with big IT budget. While the big boys are investing to migrate their operations to the cloud, automating processes and adopting digital work practices to improve productivity, small and medium business owners face restraints in their ability to embark on a full-scale digital transformation on their own. This can be from internal limitations like lack of technology know-how and limited budget for infrastructure investment, to external restraints like the inability to hire and retain local expertise due to shortage of skilled talent.
Despite these challenges, National statistics have indicated an accelerated adoption to digitalisation among Malaysian businesses. In 2020, approximately 50% of SMEs have embraced the use of e-commerce platforms to sell their goods or services, a growth by approximately 30 percentage point from previous year.
On a global standing, most businesses in Malaysia have still some ways to go on their digital journey. According to the 2020 Asia Pacific SMB Digital Maturity index, Malaysia has improved to digital maturity Level 2 but still lagging key markets like Singapore, Australia and Japan.
Nevertheless, the current environment is supportive of a rapid global change towards digitalisation. Here are the main reasons why now is the right time for SMEs to embark on a digital transformation journey.
Like any other market, the COVID-19 pandemic has served as a catalyst to the acceleration of digital transformation among businesses in Malaysia.
Customer behavior has changed as consumers confined to the indoors turned to the internet and everything digital to get things done. There is an increased need for online ordering, digital payments, and other e-services. Consumers are now spending more time on social media and subscribing to streaming and gaming services. Furthermore, service “at the tip of the finger” and the expectation for automated responses and resolutions have become trademark of the digital economy.
This newly acquired “always-online” behaviour has propagated across all age groups and social divide because of the situational needs. This is expected to continue beyond the pandemic in the advent of 5G technology which brings with it a wider application for IoT. Businesses need to be equipped to appeal to this new breed of customers or face losing its base.
What is clear from the past one and half year, companies with a robust technological backbone bounced back faster from the global pandemic crisis than those without. The pandemic proved that technology is a means for businesses to thrive and innovate. Businesses previously taking the wait-and-see approach are now seeing the true cost of not going digital as their business get impacted.
For example, factories heavily reliant on manual processes and not fitted with automation have grind to a halt as they were unable to adhere to health and safety order that limit the number of operators at one time. Furthermore, managing factories not hooked up digitally to the internet is next to impossible.
Then there is the competition from new entrants of digital native companies that run their operations on cloud allowing them to turnaround products faster and reach their customers efficiently. Being digital puts in them in the possession of millions of data. With advanced technology like cloud analytics and artificial intelligence (AI), they can personalise offerings and better understand their target market.
Businesses need to innovate their operation in order to stay robust amid future disruptions while at the same time keep up with the much leaner and agile digital cloud natives.
Despite the growing global adoption, cloud services in Malaysia is still limited and mainly based on offshore pricing. However, that is hoped to change soon.
The government launched the MyDigital initiative to anchor Malaysia’s digital economy by 2030. MyDigital is dedicated to empowering SMEs and Malaysians to gain better digital access. It will ensure the implementation of the national digital infrastructure plan that will boost connectivity through optical fiberisation across the nation. The government is adopting a Cloud-First Strategy and set an optimistic target for 80% of public data to be moved to a hybrid cloud system by December 2022.
With the heavy investment from the government to improve connectivity, major cloud players will be able to enter the local market and offer quality services, inadvertently providing opportunities to Malaysian SMEs with a much more competitive pricing. These cloud service providers (Microsoft, Google, Amazon and Telekom Malaysia) are expected to invest between RM12 billion and RM15 billion to build and manage hyper-scale data centres and cloud services in Malaysia over the next five years. With this in mind, small and medium businesses cannot afford not to get onboard the cloud train else be left behind.
But what exactly is cloud? Read on to get familiar with some cloud basics.
In its simplest term, this means having access to servers, analytics, programs, intelligence, storage and networking systems over the internet. It is delivered as a “pay-as-you-go” model which means businesses only utilize what is required and scale up as the needs change. By adopting a cloud model, SMEs can have access to advanced computing power and solutions that only large corporations could afford a few years back.
Subscribing to cloud computing services frees the business from the ordeal of building, managing and upkeep of their own data servers and other typical IT needs. This makes it a cost-effective solution which is suited for most SMEs as they need only to rely on the cloud providers with the logistics, system updates and protection of physical storage and hosting.
Cloud computing provides greater flexibility and opportunity for innovation. Businesses do not get locked into any long-term expenditure which leaves room for funds to be better invested elsewhere like product development and commercialization.
Cloud computing can be delivered as IaaS, PaaS or SaaS. The common premise would be these services is accessible anywhere and anytime making it particularly handy for remote teams that are distributed all over the globe.
This is where a black-box server infrastructure and resources such as data storage, networking and virtualization layer is delivered via cloud. Some examples of IaaS include Google Cloud, Amazon Web Service, and Microsoft Azure.
The PaaS model is where the service provider hosts an application stack, with operating systems, middleware and other runtimes into the cloud environment. It is mostly suited for software development as it provides the platform to build applications. Some examples of PaaS include Heroku, Google App Engine, and Red Hat OpenShift.
This is the most common cloud-based service that provides out-of-the-box applications or services to suit various business needs such as digital marketing, ecommerce, accounting, data analytics, customer resource management, and many more.
Probably the most important aspect of cloud computing is the many productivity gains that businesses will experience from the vast computing power and storage.
Cloud computing provides businesses with all the processing power needed for heavy workloads of business automation. Furthermore, it has made it possible to harness the power of artificial intelligence for processes that require fast recognition and decision-making. Businesses can test, deliver, monitor, and detect issues in their products/services faster, therefore, releasing better products to the market.
The raw flexibility and power of the cloud allows businesses to retrieve and process real-time data from business applications, social media, sensors, and many more sources. This is a game changer as businesses process complex data faster and gain more analytics insights to help deliver personalized products and services.
Business downtimes often result in the loss of revenue and productivity. Cloud technology has made it easy for large data, applications and services to be replicated over distributed servers to balance the workload. Businesses are always ensured of uninterrupted and consistent digital services to their customers. The ability to deliver outstanding customer experience will rank SMEs highly and provide the competitive edge needed.
Cloud service providers are invested in ensuring their servers are secure from cyber attacks and other online vulnerabilities. This is because they have the economies of scale to implement the most advanced and rigorous security of their cloud servers. Businesses and their customers who are using the digital services are protected from exposure to these cyber threats.
If you are an SME embarking on a digital transformation journey, going to cloud by your own may feel like an impossible task. It is best to engage with a trusted solutions provider that can assess your business needs from all fronts and work together to formulate a Cloud-First strategy. With the right partner, you will receive the necessary guidance and be assured of success.
Are you ready to harness the power of cloud?
Celcom have been standing with Malaysian businesses for more than 30 years to deliver the widest mobile network nationwide. As a one-stop digital solutions provider, we bring a comprehensive and end-to-end service ranging from connectivity to innovative business solutions that is tailored to simplify the digitalisation of your business and enhance productivity.