MDEC developing ‘digital maturity index’ for digitalisation

• Aims to define, measure digitalisation in a bid to help companies in their journey
• Asean Data Analytics Exchange on track, to be housed in Bangsar South

MALAYSIA is in the process of trying to develop an index to measure how mature organisations are in their quest to become digitalised, according to the Malaysian Digital Economy Corporation (MDEC).

Speaking to the media at the sidelines of the General Electric (GE) Digital Advantage Conference, MDEC chief strategy officer Siva Ramanathan (pic, above) said Malaysia currently does not have a specific index or metric to measure the digitalisation of organisations, but that MDEC is looking into developing one.

“It’s currently now in the planning stages,” Siva said. “If all goes well, we are going to push ahead with it and have a digital index that measures and tracks how well Malaysian-born and Malaysia-based organisations are doing in going digital.”

Digitalisation is a term used to describe the journey an organisation takes to disrupt their own business models and at the same time re-inventing itself through innovation to develop new products and services to bolster revenue and profits. It does so by using newer digital technologies such as cloud, mobile apps, advanced analytics and the trends such as the connected Internet, also known as the Internet of Things (IoT).

Formerly known as Multimedia Development Corporation or MDeC, MDEC was renamed to reflect this evolution in mandate as it seeks to focus on growing the national digital economy contribution to Malaysia’s total gross domestic product (GDP) and transforming Malaysian organisation into a ‘digital economy.’
 
Asked what is the timeframe for which this process will take, Siva emphasised that this is a very new idea and “that it has never been done before” so it will take time.

“I’m not going to lie to you and say it’ll happen by next year because it will not,” he stressed. “This is an ongoing journey for us and it’ll take more than a year as we need to get buy-in from our stakeholders and also work with other relevant ministries – such as the Department of Statistics – as we can’t do this ourselves.”

Siva explained that the process firstly involves benchmarking and establishing a baseline for the index, which would require cooperating with other relevant governmental agencies and stakeholders. Next is to establish what elements go into the index, how to evaluate organisations, and how to track their maturity, he added.

“We haven’t worked this out thoroughly yet and we shall be looking at other models from other nations such as those employed by the European Union,” he revealed.

“There is a whole science behind coming up with an index. It’s a process and you’ve got to be able to track maturity but we can’t be doing everything at the same time. Right now, we’re pushing adoption of digitalisation in organisations and the next step is to track and measure their progress.”

Noting that other advanced countries which have forged ahead in digitalisation such as Singapore and Korea, Siva argued there must be complete buy-in from top [ministers/government] right down to bottom [citizens and companies].

“We must do the same [here in Malaysia],” he declared.

One of the advantages of developing such a digitalisation index is so that the government, through an agency like MDEC, will be able to become more transparent and circumspect when giving out incentives, Siva said.

Arguing that the government can no longer be just handing out incentives to buy equipment, Siva said having a digitalisation index will help it decide which companies are worthy of receiving these incentives.

“Say for a manufacturer, we can use the index to decide how far along its digitisation maturity is, benchmark it with the best-in-class, and decide whether it qualifies or not.”

Adax on track
At the briefing, Siva also revealed that the establishment of its Asean Data Analytics Exchange (Adax), scheduled for the end of this year, is on target and will be based in Bangsar South, a suburb about 15km southwest of Kuala Lumpur City Centre.

In April, MDeC director of innovation capital Dr Karl Ng told the media Adax had been mooted with the objective of boosting big data analytics (BDA) adoption by businesses. However, he said plans to form the Adax was then at a “conceptual stage only,” and that MDEC was looking at where to best house such a facility.
 
“We have received a good response so far. The industry really wants this; the suppliers, the partners really want this,” he declared then.

Siva confirmed that Adax will be ready by year-end and will be a crucial milestone for MDEC to encourage the use of BDA amongst Malaysian companies. He also revealed that within Adax, there are three focuses – talent development, software testing environment, also known as a ‘sandbox,’ and a BDA startup hub.

“Say a telco has a challenge that they want to address. They can come to Adax, partner with us to look into how to solve the problem. At the same time, they can engage with startups – who are good at solving problems – to aid them with solutions to their challenges,” he said, adding that this is one way Adax can help the industry.

GE Asean president and chief executive officer Wouter Van Wersch (pic, right), who also at the media briefing, noted that many Malaysian organisations are beginning to realise the advantage digitalisation is bringing to their businesses, and claimed that they’re willing to change to keep up with times.

He added that this is one of the reasons why GE has chosen to host a digital transformation conference here in Malaysia so that the company can share its knowledge with Malaysian organisations and to learn from other thought leaders in their journey to digitise their companies.
 
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