Digital transformation adoption lags amongst Malaysian enterprises: Dell

• Budgets, lack of desire, management support amongst the reasons
• Some organisations addressing issues by upskilling, adopting new tech

MALAYSIAN enterprises have been challenged to adopt digital transformation in their respective businesses but despite the emphasis to do so these past two years, organisations aren’t getting on board as quickly as they should, a new study has found.

Speaking to the media when revealing the findings of the Dell Technologies Digital Transformation Index (DT Index), Dell EMC Malaysia country manager KT Ong (pic) said only 18% of Malaysian businesses are categorised as digital adopters, which are defined as companies that have digital plans and innovations in place in their organisations today.

“We’ve talked about being on the cusp of a tremendous change for some time now,” Ong said. “But the data shows that Malaysian enterprises [as a whole] are lagging behind in the adoption of digital transformation.”

The data for Malaysia was part of a larger global study, which polled 4,600 respondents from 42 countries and was conducted by Vanson Bourne. As part of this study, 100 business leaders in Malaysia from mid- to large-size companies were surveyed in the last quarter to gauge their organisations’ place on the DT Index scale. This is the first time the Dell study included Malaysia in its scope.

The research firm examined digital business efforts by examining Malaysian organisations’ IT strategy, workforce transformation initiatives and perceived performance against a core set of digital business attributes. The complete global results will be released in early 2019.

• Aside from the 18% who indicated they’re merely digital adopters, the study revealed the following:
• A mere 3% are digital leaders – organisations in which digital transformation, in its various forms, is ingrained into their businesses;
• Twenty-eight percent are digital evaluators – those who are cautiously and gradually embracing digital transformation, planning and investing for the future;
• Forty-one percent are digital followers – those who have few digital investments and are only  tentatively starting to plan for the future; and
• Ten percent are digital laggards – those who do not have a digital plan and who have limited initiatives and investments in place.

Quizzed as to why Malaysian enterprises are still in this state despite the many endeavours by government agencies such as the Malaysia Digital Economy Corporation (MDEC), other vendors such as Dell, as well as analyst firms to push the going digital agenda, Ong clarified that since it’s the first time for Malaysia, there is no point of comparison with the past.

However, he suggested that one of the main reasons for the less than enthusiastic adoption of digital could be the fact that many Malaysian enterprises do not see the urgent impetus to go digital.

“It could range anywhere from senior management not standing behind digital transformation efforts to no budgets allocated to do so or refusal to change because their businesses are doing well today.

“It could also mean that companies are fearful of change or it could be that they acknowledge the need to change but don’t know how to go about doing so,” he said.

Ong also suggested that many organisations today are still grappling with ‘keeping the lights on’ while being pressured by tight budgets.

“IT managers may be used to 10 guys keeping things running but today, they may have to live with three guys while the rest have been redeployed to do something else,” he explained. “They are given the same budget as before but they have to use part of that budget to innovate.”

Further revelations

Dell’s DT Index also noted that the top five barriers (in descending order of importance) to digital transformation are the lack of budget and resources; data privacy and cyber-security concerns; the lack of the right in-house skill sets and expertise; the lack of senior support and sponsorship; and the immature digital culture: lack of alignment and collaboration across the company.

Ong said the survey noted that 85% of Malaysian business leaders believe that digital transformation should be more widespread throughout the organisation, while only 10% strongly agree they’ll disrupt rather than be disrupted within five years.

“The next digital era has arrived and it’s reshaping the way we live, work and conduct business, which means that time is of the essence. Genuine transformation needs to happen now, and it needs to be radical.”

However, the report isn’t all gloom and doom as Ong noted that some businesses have indicated that they’re taking steps to overcome their hurdles.

He added that about half of those surveyed in Malaysia have indicated that they plan to develop the right skills sets and expertise in-house, such as teaching staff how to code, using digital technologies to accelerate new products/services development and equipping IT leaders with business skills and business leaders with IT skills.

In term of investments, Ong said a number of businesses are beginning to experiment with nascent technologies.

“The survey revealed that almost a quarter (24%) will be investing in cognitive systems, 16% in quantum computing and virtual/augmented reality (VR/AR), while 14% will look into commercial drones and 13% intend to explore blockchain technology.

“We’re at a crucial intersection where technology, business and mankind meet,” said Ong. “However, only technology-centered organisations will reap the rewards offered by a digital business model. This is why digital transformation needs to be a number one priority.”