Businesses in Asia Pacific are investing more in digital than their counterparts around the world and unlocking far greater rewards. Seizing the full gamut of digital opportunities, however, will require a dedication to a digital-first approach and commitment to a changed mind-set that embraces collaboration, new skill acquisition, and a rethinking of the man-machine relationship.
The digital era has ushered in one of the most important business transformations and Asia Pacific is poised to reap the rewards. The region will account for over 53% of the global internet population by 2020. Asia’s digital story is all about massive growth. According to a recent study, companies are digitalising every aspect of their business, building new revenue models, reaching new customers, and making big money doing so. No longer just another channel, digital has become the channel to master.
The traditional elements of mass production and wealth creation—capital, labour and raw materials—are being redefined by digital, creating new value for businesses. From traditional conservative companies to progressive enterprises, all are looking to leverage digital to re-imagine their future.
The more one invests, the more one makes
Digital represents the future of money. Preparing for that takes vision and a solid strategy. Significant investments are required to win new markets, innovate and improve efficiencies, manage maintenance costs during the transition, initiate internal change, set out a digital roadmap, provide interdisciplinary company training, hire third-party consultants and possibly acquire companies while attracting digital-savvy talent.
Re-assess what you measure
As competitors are also investing in digital (heavily and faster, in many cases), the means for an organisation to keep enormous return on investment (ROI) afloat is by positioning customer experience as its “true north”. The fundamental question to ask: Does a product/service “talk” to customers directly, or does the marketing department have to spend millions of dollars to create fancy brochures and advertisements to communicate what the organisation does? The real purpose of a product/service is to provide convenience to customers, be useful, simplify their lives, and put them in control of things. To put it in perspective, the fast rise of third-party payment platforms such as Alipay (China), Paytm (India) and Mint Wireless (Australia), among others, reflects how success is measured in a digital world. In fact, Alipay is the largest online payment processor in the world today, having hit $100 billion in transactions in less than a year, with zero branches.
An organisation’s back office is a digital sweet spot
The cost-savings realised by digitalising back-office operations to eliminate inefficiencies vary by industry. Across industries in Asia Pacific, digital is helping to reduce costs—particularly through process automation in the back office—by 4%. These cost benefits are expected to more than double to 9% by 2018.
The technology platform is the most substantive advantage a company can create (anyone can copy Google’s interface, but no one can replicate its search algorithm). Investing savings to stay relevant and future-focused is a fundamental—and smart—move. Leaders who don’t use technology to reduce costs and then reinvest in digital will find it hard to pay for the innovation needed to win in the new economy.
The key financial performance indicator
Digital’s onslaught is already impacting work and business. Knowing how to handle the change is critical. Seizing digital opportunities requires new ways of work, responsibilities, skills and attitudes. The key to success is to first recognise digital as the key financial performance indicator, and then develop a strategy to get there. Making money with digital requires a change in mind-set, organisational structure, investment priorities, and overall business approach. If an organisation commits to a digital-first approach, it has a real chance of capitalising on the opportunities that digital unleashes.
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Cognizant’s recent research shows that if digital were a separate country, it would create an economy equivalent to a little more than the GDP of Thailand in just three years. If an organisation is on the digital side-lines, now is the time to jump into the express lane.
– Manish Bahl is senior director, Centre for the Future of Work, Cognizant.