Expert insights: Five steps to preparing for digital transformation
THE Malaysian manufacturing industry growth recently declined for the third successive time, driven by faster drops in output and new orders according to Nikkei Malaysia Manufacturing PMI.
Based on the declining results, it looks like Malaysia’s manufacturers and businesses are still a long way from competing with other Southeast Asia countries, such as Singapore and Thailand.
To boost their progress, Malaysia launched the Digital Transformation Acceleration Programme to support businesses and manufacturers to digitally transform.
Malaysian businesses and manufacturers need to adapt to the changing technology landscape and act accordingly to embrace digital transformation.
However, digital transformation can be an exceptionally complex process. With that in mind, here are five key steps companies need to take to prepare for a successful digital transformation journey.
1. Align your business transformation strategy to your business goals
Avoid investing in new technology for the sake of it, or because you feel you should. It is essential that businesses identify where technology change is needed most.
Start by assessing your overall business goals and ask what objectives your business wants to achieve in the short, medium, and long-term.
Then ask what technology will help achieve those goals.
For example, it might be that your primary focus is to expand into new markets quickly.
If so, holding off on that AI investment you’ve been planning, and instead make sure you have a solid cloud infrastructure that can support your mission-critical processes from multiple locations might be a better idea.
2. Invest in the right technologies
Digital transformation means different things to different businesses and certainly, heavy spending alone is not going to guarantee success.
The Aberdeen Group, for example, has identified three digitalization technologies that have the potential to impact operations–the Internet of Things (IoT) because of its ability to provide operational intelligence, the cloud for its scalability, and big data analytics, which can transform data into predictive and actionable insights.
But there’s no one size fits all.
According to research, 19 percent of manufacturers are planning to invest in inventory management, 18 percent cloud, big data and customer relationship management, and 17 percent are planning a mobile technology implementation.
There are multiple options, and businesses must ensure that they are investing in the technologies that are right for them.
While one business may see immediate benefits from implementing cloud infrastructure, a manufacturer operating out of just one facility might want to look at other options first.
For example, they might instead see more immediate ROI from keeping data on-premises, but implementing an ERP solution that uses big data to track orders against stock and supply chain information in real-time.
However, if they choose right, their ERP technology should be flexible enough to accommodate growth and an eventual move into the cloud.
3. Ensure buy-in from key stakeholders within your business
After you’ve identified how digital transformation can support your business goals, you must bring stakeholders on board because successful digital transformation strategies change how businesses work.
They impact people’s jobs, how they complete tasks, and also how they work together.
Staff from the boardroom and beyond need to feel they have a personal and professional stake in the changes being made.
Helping them understand the reason for the business’s investment will make it easier to overcome any potential resistance to new processes.
This is particularly important when digital technologies are being implemented to automate tasks that are otherwise completed by staff members, or when it might not be immediately obvious how an investment will deliver ROI.
4. Turn insight into action
Businesses today are collecting more data than ever, but simply amassing vast amounts of information as a result of digital transformation, is not enough.
The key lies in being able to use insights effectively, to guide change or identify new revenue streams.
The latest data analytics suites can provide businesses with crucial information about customer trends and predictions, or information about how products are performing.
Some businesses are already using this sort of data, to turn insights into action.
For example, Karangkraf Media Group used technology to configure its business processes accurately at just a push of a button.
The company saved the equivalent of 50 working days used to compile and analyze data, and about RM80,000.
Karangkraf has also been able to sync its data across several branches to enable improved management and enhance the decision-making process.
5. Continually reassess your digital strategy
Understand that digital transformation is a journey that is never complete.
New technologies are being launched all of the time—from robots that complete tasks on the production line quicker than humans, to machines that can fix equipment problems without intervention.
All of these bring with them multiple possibilities for Malaysian manufacturers and businesses.
It’s important to therefore constantly adapt your digital transformation strategy to new possibilities, reassess your journey, and question your rate of digital change—does it match up to your customer expectations?
How does it stack up against your business goals? If these change, perhaps your technology should too.
Adapting to the digital world can be a challenging undertaking, however, there are plenty of resources that can help you along the journey.
Innovative enterprise resource planning solutions (ERP) solutions, combined with Industry 4.0 developments, are already helping to automate production lines, streamline supply chains, and provide the intelligent data manufacturers need to react quickly to changing consumer demands.
For Malaysian businesses to take a place among the world’s production leaders, deploying advanced technology to drive manufacturing efficiency and business growth, is going to be the way forward.
Contributed by Vincent Tang, Regional Vice President, North Asia, Epicor