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ASEAN enterprises face hurdles in digital transformation

Southeast Asian firms know what it takes to transform digitally, but they are not as adaptable as they would like to be, a survey has found

Enterprises across Southeast Asia are prioritising growth and customer experiences to ready themselves for the post-pandemic world even as they continue to struggle with talent issues, cloud adoption and gaining insights from data.

Those were the key findings of a survey by Oxford Economics which polled 600 senior executives – including 400 from small and medium-sized enterprises (SMEs) – across Singapore, Malaysia, Thailand, Vietnam, Indonesia and the Philippines.

Commissioned by SAP, the survey found that customer experience has been a strategic imperative for survival and growth, with over a third (35%) noting that service excellence is now their primary source of value and differentiation.

These include personalisation (59%), providing high-quality products and services (55%), ensuring data protection and privacy (53%) and offering competitive pricing (51%).

“Having gotten a foothold on the pandemic’s disruption, businesses across Southeast Asia are at a crucial transformative point to achieve long-term competitive growth,” said Verena Sow, president and managing director for SAP Southeast Asia.

“Regardless of industry, businesses must embrace true business transformation into intelligent enterprises while keeping in mind that customers are the lifeline to survival and sustainable growth,” she added.

SMEs also found it more challenging than larger companies in keeping pace with uncertainties and external challenges in the current business environment.

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They cited difficulties in adapting to a rapidly changing marketplace, keeping up with customer needs, retaining customers and driving repeat business as the top barriers to meeting their strategic priorities.

When it comes to the use of technologies, more than half believed that automation would help them to improve process efficiency and reduce errors, risks and costs, while freeing employees to focus on higher-value tasks.

Others had trouble competing with larger firms (50%), and lacked the technology for analytics (43%), a capable and motivated workforce (40%) as well as adequate data (38%).

“In an ever-increasing digital economy, the enterprises that thrive are those that adapt the quickest. There is a strong need to shift mindsets while constantly seeking new ways of working and redesigning processes. It is only by doing so that businesses can find a way that works best and stay ahead of the competition,” said Siow.

Short-term actions

To address their challenges, Southeast Asian enterprises have employed short-term actions to improve customer experience by investing in user-friendly digital experiences (39%), reducing prices (38%) and increasing after-sales maintenance (37%).

Yet just 58% said they have made at least moderate progress towards digital transformation and even fewer (45%) have made moderate progress towards transformation.

Notwithstanding these challenges, SMEs saw their nimbleness and ability to build trust with customers as their inherent competitive advantage against larger competitors, which can give them the strong foundation they need to experiment with new technologies and business models.

“Flexibility is a crucial ingredient of success today and through our new Rise with SAP initiative, we are confident customers will get the flexibility required to accelerate the speed of digital transformation and excel in the diverse environment they operate in – wherever they are on the digitalisation spectrum,” said Siow.

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