The Right Way to Transform Your Business Digitally
What is Digital Transformation?
Simply put, digital transformation means the digitisation of everything previously done by human labour, utilising systems and obtaining data that can be used for further analysis.
Digitisation is a wondrous thing. One can use it to completely digitise and visualise your procurement process; automate your inventory management; monitor, analyse and manage the performance of your online store space; and also use Big Data to analyse your sales and customers. More, there are now also AI-driven processes such as data analysis, store selection, and product selection. Once digital transformation is fully implemented, there will be nothing left to do but to sit and wait for money to roll in.
Factors Affecting Digital Transformation
Costs and Return on Investment
The most important consideration in a company’s adoption and implementation of a digital transformation strategy is still the return on investment, and the cost of implementation.
This applies especially for companies that are more local, smaller in size and budget, and do not command as large or valuable a customer base as, say, an MNC would. In a situation where their customer base is not that big, companies would be asking the following questions about any investment into systems that they plan to make:
- how much productivity gain or results can it give them?
- how long it will take to break even?
- Will the product become obsolete before the break-even point?
Different companies have different expectations, and if the answers to those questions do not meet their expectations, then digital transformation may not seem attractive to these companies.
Let’s take an example everyone is familiar with–bank accounts. Has Singapore’s banking system changed over the years? We can see that even now, we still can’t see the timestamps of our transactions reflected on the DBS and UOB i-banking apps, only the date stamps. Neither can we see transaction IDs.
Many might argue that banks’ apps are improving nevertheless. For example, Mission Bank’s app has been getting more and more beautiful, offering more and more functions, and providing a better and better UX.
However these are all just cosmetic changes; the actual base layer has not changed.The reason for this is likely that upgrading the base layer is considered not worth it. However, companies in Southeast Asia must take note that not upgrading a piece of technology deemed non-cost-effective (in this case, an app’s bottom layer) may make it even harder and more expensive for other technologies (in this case, an app’s top layer) to function.
Business Priorities
Every enterprise engaging in digital transformation or upgrading has different priorities–some, such as supermarkets, want to improve their supply chains. Others, such as utility companies, may want to prioritise improving their sales process, because everything starts from having an adequate pipeline.
How companies perceive this investment will depend on what kind of return on investment they expect from it. Generally speaking, big companies tend to value improvement of internal processes more, while smaller companies tend to value external sales.
Challenges Facing Digital Transformation in Southeast Asia
Multi-Nationality & Multi-Culturality
Digitally transforming companies and industries in Southeast Asia can be challenging, because although the countries in the region have a high population cumulatively, individual countries can vary drastically from one to another in culture, religion, language and social values. This makes it challenging to create universal systems and carry out market analyses.
Feasibility of Big Data and AI
Another challenge is the potential unfeasibility of using Big Data and AI to drive digitisation in some areas of the region. For example, it’s pointless to talk about Big Data and AI without sufficient data samples. Only when one has collected enough data can trends be identified and the data used for analysis, and only then can so-called AI come into play.
With some countries in Southeast Asia having rather low populations that potentially do not offer enough data points (such as Singapore when catering to its own local market), it is important for every Southeast Asian country to be careful with AI and Big Data, because the conclusions may not be that accurate.
Increased Localisation Cost
The process of digital transformation has to be a sustained one. As a top-down strategic decision whose roadmap has to be implemented by various company departments downstream, It is definitely not something that can or should be done overnight as a matter of principle.
This is all the more so in Southeast Asia, where individual countries are not really high in population, and are divided by linguistic and cultural differences. It is very difficult in such a situation to create a universal system that can satisfy all countries at once. The need for localisation will greatly increase the cost of upgrading and iterations.
The Right Approach to Digital Transformation in Southeast Asia
Although Southeast Asia’s market landscape presents a host of challenges and potential obstacles to digital transformation, this doesn’t mean that it’s not worth it for Southeast Asian countries to digitise. However, the key lies in finding the right approach to mitigate these risks and challenges and maximise the chances of successful implementation and greater savings and productivity.
The right approach is for companies in Southeast Asia to take it slower, and draw on the experiences obtained in larger markets, to find the best way to proceed. Take American or Chinese systems; once they have been implemented and validated, market competition will drive prices down and lead to more mature product versions.
The fact is that digital transformation in Southeast Asia is not impossible; companies simply need to adopt tried and tested solutions like what Sunmi POS device for example can do, to drive the process in an intelligent and less risky manner that keeps costs down, and eventually creates savings, convenience, and increased returns.
Digital Transformation of Retail with Sunmi POS
Waiting till this mature stage before implementing the system into your local market would make it less risky. The Sunmi POS device are an example of this; they have been perfected in function and reduced in cost through intense competition in China’s market, to solve the need of physical retailers to digitise, track, and sell their products through online channels.
Besides, our Sunmi POS solution digitises your product inventories, allowing you to keep track of them and even sell them online via the software in a Smart POS device created by our technology experts which integrates your offline store presence with the wider online world, reducing costs and increasing efficiency. The automation thus provided allows you to manage your sales and inventories more intelligently and in a less labour-intensive way.
Together with localised after-sales and support teams, our Sunmi POS solution have helped numerous local retailers to solve their retail pain points and better capture value in their processes and systems. Many major convenience store chains and minimarts already utilise our Smart POS device and software to go fully digital, and streamline their sales and inventory management.
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