Beyond technology adoption
Calyn Yap 
Digitalisation can help companies simplify and reduce manual processes and costs in operations, driving better efficiency that may then translate into savings for consumers

THE impact of digitalisation in businesses can no longer be ignored. As a result, businesses are increasingly seeking ways to transform their operations digitally. Despite varying definitions, digital transformation goes beyond the adoption of technology.

Digital transformation is a confluence of technology, processes and business models, which can enable the creation of new products or services, or new verticals for businesses.

It also provides better focus towards improving customer experience. Digital transformation strategy also provides a clear pathway in helping to create a viable digitalisation plan.

“Digitalisation is a method to simplify how we do business and to engage with consumers directly, a trend that has been emerging over the past five years,” says Zurich Insurance Malaysia Bhd senior vice-president and general insurance market management head Junior Cho.

Internally, for example, digital transformation can help companies simplify and reduce manual processes and costs in operations. This improves efficiency that may translate into savings for consumers.

“The most important thing is that it enhances engagement and brings flexibility to brand-building initiatives,” Cho adds.

According to Oracle Corp Malaysia Sdn Bhd’s head of application and Asean human capital management Bernard Solomon, people and processes play an integral role in any digital transformation plan.


Challenge to upskill talents

While technology improves efficiency and growth, it can be a challenge to upskill talents to analyse data for actionable insights, and turn the insights into informed business decisions. As a result, says Solomon, human resource and finance departments will need to incorporate new processes and address talent issues.

Microsoft Asia Digital Transformation Study last year showed that business leaders in Malaysia are embracing the Industrial Revolution 4.0 by transforming into a digital business. Their aim is to enable future growth, and at the same time, leverage new data insights to create new revenue streams.

To Microsoft, the process of transformation has four key pillars. This includes engaging customers, empowering employees, optimising operations and transforming products and business models.  

Digital transformation can also lead to the creation of new products or services to address market needs and engage customers better. For instance, Cho points to Zurich Insurance’s introduction of business insurance Optimuz in August 2015, which was meant to cater to SMEs’ needs.

Using the platform, intermediaries/agents, partners and SME owners can choose either conventional or takaful insurance plans for up to 11 types of coverage as well as the amount of coverage depending on their current business needs, with fire coverage as the anchor protection.

With SMEs being involved in the various industrial sectors, the ability to customise benefits and coverage limits would enable them to manage costs better.

“We found that there was a void and need to simplify SME offerings using a digitalised solution, as well as to provide a personalised experience and customised offering. The key is to provide different options and to meet the needs of varying segments.

“It’s essential to drive awareness for SME owners, but the most important thing is to continue offering that flexibility and simplicity so they don’t feel overburdened or over-insured,” he says.

As a result, Zurich Insurance’s platform has been seeing double-digit growth over the past few years. Cho also says that the new digital platform plays a major role in simplifying the processes and increasing efficiency without the need for manual approvals for payout on simple cases.


Building a digital ecosystem

While driving innovation in digital technologies is important, it is vital to also focus on building a digital ecosystem. Businesses can do this by leveraging technology and partnerships to create part of the digital ecosystem. Businesses can also find new ways to reach potential consumers and build new sales channels.

As an example, says Cho, Zurich Insurance can now embed insurance and make it appear to be a lifestyle product by partnering with e-commerce players. Through e-commerce, Zurich Insurance could offer insurance as an option when consumers purchase a luggage bag, in anticipation of their travel plans.

“It then becomes another avenue to offer insurance to the consumer. It’s selling existing products but we are also meeting consumer needs within a digital ecosystem.

“Part of what we want to do is not just to position ourselves in a digital [ecosystem], but understand what consumers want,” Cho says. To him, it is a sheer waste of resources if companies invest into the business without understanding customers’ needs and wants. “Focus on the consumer experience you want to provide, set clear expectations on what to achieve with digital transformation. Testing and learning allows you to get customer feedback on the process of digital transformation,” Cho explains.

He advises SMEs to place consumers in the centre of every digital transformation initiative and focus on the consumer experience.  

Unfortunately, businesses tend to have unrealistically high expectations upfront on the return on investment, instead of working through the cycle of trial and error.

Digital transformation, Cho stresses, is a journey and not an end-goal. Hence, businesses must have the flexibility to pivot when necessary to test new ideas, learning and implementing successful initiatives.

Pillars of digital transformation

ORGANISATIONS need to develop a data-driven culture and build up a strong digital ecosystem to gain the benefits of digital transformation, says Microsoft Asia president Ralph Haupter.

By doing so, he believes they will be able to create a value chain by gaining new insights through new data sources, expanding their digital products and services and build data as a capital asset.

According to the Microsoft Asia Digital Transformation Study 2017, there are four key pillars for digital transformation. These pillars are:

1. Engage customers: Consumers are more savvy than ever before. They now have access to data, ensuring they are frequently updated on a product or service. To stand out, organisations will need to deliver a new wave of deeply contextual and personalised experiences while balancing security and user trust.

2. Empower employees: The nature of how we work — and the workplace itself — has undergone a dramatic evolution. Organisations can empower their people and help them do their jobs better with the power of mobility, which allows employees to collaborate from anywhere, on any device, and access apps and data they need, while mitigating security risks.

3. Optimise operations: Technology disrupters such as the Internet of Things are accelerating the potential for businesses to optimise their operations. This can be done by gathering data across a wide, dispersed set of endpoints, drawing insights through advanced analytics, and then applying those learnings to introduce improvements on a continuous basis. Organisations in manufacturing, retail, and even healthcare can shift from merely reacting to events to respond in real time, or even pre-emptively anticipating and solving customer issues.

4. Transform products & business models: The opportunity to embed software and technology directly into products and services is evolving how organisations deliver value, enabling new business models, and disrupting established markets.

This article first appeared in Focus Malaysia Issue 274.