Corporates eager to adopt digital mindset, agile structure

• Organisational structure for Brick & Mortar world places a damper on innovation
• Accenture forced to innovate due to “paranoia” of being left behind

“IF you think about market trends right now, the demand for petroleum products is flattish and may even contract over time,” says Shahrizal Yang Razalli, head, executive vice president and CEO’s downstream office, Petronas.

Demand could potentially even dwindle as engines become more efficient and will require less fuel, as well as increased popularity of hybrid and electric vehicles. Shahrizal was speaking in a panel at the Petronas Group ICT Forum 2018 held October 23-24. With the theme, PETRONAS First, the two day event showcased the group’s digital solutions and explored digital transformations taking place around the world.

Shahrizal’s panel was entitled ‘Why Innovation Matters More Than Ever’ and was moderated by Digital News Asia’s founder, Karamjit Singh. The panel also featured Amran Hassan, head of innovation at Maybank Bhd and Mohan Sekhar, senior managing director and lead, Advanced Technology Centre, Accenture, India.

According to Shahrizal, the digital transformation of Petronas is driven both through the pain points of the organisation and the trends in the market. “The objective is to run our assets in the most reliable, efficient and safest way possible. Our innovation revolves around achieving this objective.”

What drives innovation?

“With the advent of technology, a lot of solutions are readily available. The key for us is to identify the pain points. For Petronas, it’s been a major shift since we started to embrace some of these solutions with our engineers looking at our systems and thinking about how to improve efficiency,” he added.

Fully aware of the future changes in the oil and gas landscape, Shahrizal says the question for Petronas is, “How do we tap into the retail side knowing that the fuel demand will contract?” He believes the answer lies in innovating to deliver superior customer experience in order to push more volumes and sales.

Shifting focus to the banking sector with Maybank, Amran bluntly set the context by stating the main goal of the business is to increase revenue or cut cost. “When we look at innovation we must have a line of sight within these two objectives. If there are internal pain points that cause our staff to be unhappy, for example, but solving it does not reduce cost or increase revenue, we don’t do it.”

Similarly, Amran shared that improving customer experiences at Maybank are also heavily dependent on how it can help the bank reap more revenue, referring to this as the “cold hard truth that is not so sexy about innovation”.

Meanwhile, Accenture is in the business of helping their clients set foot on going digital. “With so much of hype and technological transformation, our clients are confused and they don’t understand what they need to do,” Sekhar said, adding that most of them just follow what others in the industry do without considering if they really need to.

When organisations were previously asked to pinpoint the innovators within their companies, often they often referred to the IT personnel as the ones in-charge. Sekhar said, “That is completely wrong. With the way the world is changing, innovation cannot be outsourced and has to be a cultural change.”

The digital mindset

As far as Accenture’s own digital mindset goes, Sekhar gives it a rating of 7 out of 10 and achieved after “a lot of hardwork and heavy lifting”. According to Sekhar, the advantage of Accenture in this aspect is its technological workforce who are cognizant of the rapid changes.

Having said that, he shares that the main motivator behind the company’s digital mindset is the “paranoia of keeping up with changes in the industry”.

As far as Maybank goes, Amran rates the company’s digital mindset at 4.5. Despite employees being eager to embark on the transformation journey, there are other hurdles to surpass.

Amran shares that all employees were onboard to improve processes since the very beginning. “So the mindset is already there, but the challenge is executing in the current structure. Staff lack resources and have very little time to engage in projects when they already have their business-as-usual responsibilities to fulfil.”

However, the bank is slowly moving towards a more tactical approach with the CEO of Maybank, Abdul Farid Alias, directly overseeing the ideas he believes are most strategic.

Shifting focus to Petronas, Shahrizal believes the key factor in digital innovation is the commitment of management. Rating the company’s digital stance at a 4, he talks about some initiatives Petronas has taken to further propel itself.

“We have given birth to about four ventures in the space of one year,” said Shahrizal. The company has decided to innovate based on desirability to customers. “We ask ourselves, would our customers buy this? It must add value.”

Fear of failure

Karamjit asked the panellists whether their organisations are empowered to fail in the quest for innovation, especially since most large companies are risk-averse. “To us, failure is not a full stop. In Petronas, failure is an opportunity to reflect and improve on ideas. We believe in failing fast but pivoting even faster,” shares Shahrizal.

In Maybank, a lab approach is adopted for new ideas. Amran says the initial stages of ideation revolve around the potential outcome rather than the chance of failure.

“In a business context, it is actually not okay to fail. It is not okay to lose money from our investors. We have to make sure that anything we do will provide us a platform to improve,” he says.

Related stories:

PETRONAS, TM EMBARK ON CROSS-INDUSTRY DIGITAL COLLABORATION

HOW COMPANIES CAN RAISE THEIR DIGITAL QUOTIENT

MAYBANK SEES E-DUIT RAYA TRANSACTION VALUE DOUBLING THIS YEAR