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Tech & Innovation

5 Steps to plan your digital transformation

Five key areas decision makers should consider while planning for a digital transformation. Inspired by Sun Tzu’s Art of War, the concepts and examples are based on my views and lengthy experiences in the IT industry.

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By Yeo Siang Tiong
General Manager for Southeast Asia at Kaspersky

Being in the IT industry for the last 28 years, I had the chance to observe the many advancements and upheavals in the field – advancements in technology, changes in standards and protocols, mergers and acquisitions, layoffs and re-organizations. But I have never seen Southeast Asia (SEA) transforming at a breakneck speed until this pandemic. 

This transition boils down to one segment – digital. In fact, the region has reached more than the forecasted 310 million online consumers for 2025 in 2020, five years in advance. Thanks to the 40 million first-time internet users last year from Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

As a result, there is now an urgent need for businesses to reconsider their infrastructure, their business model, and their ways of doing transactions. The stakes are higher for firms to wade through this digital wave, with this global crisis in the background.

So today, I want to share five key areas decision makers should consider while planning for a digital transformation. Inspired by Sun Tzu’s Art of War, the concepts and examples are based on my views and lengthy experiences in the IT industry. These 5 areas are – 五事:道、天、地、将、法。

  1. Alignment – Alignment from the board level or CEO to the last men in the front-line like the customer support and sales is important. If aligned, the men will fight the toughest war. The “Shared Values” and “Strategy” in the McKinsey 7-S Model are probably the closest elements to this concept. 

Unfortunately, the modern management theory sees the shareholders as the ultimate people to please, with employees as mere digits akin to the factory workers of the Industrial Age. Coupled with disproportional use of debt-based leveraged buyouts, owners are no longer owners and alas, the employees who staked their well-being on the company, their voices are hijacked. 

Fortunately, this is probably true only for the larger corporations where the gains are meaty. Nonetheless, for all corporations of various sizes, the spirit of the company is the thread that weaves all together. Without a clear sense of direction and purpose that is well communicated, the individual parts can be difficult to summon and align.

Applying this logic to digital transformation, the whole company from the C-suite to the groundwork staff should be structured correctly, aligned, fully aware and on board.

A good example is how companies pivot into digital retail. It is important that the company is well aligned to execute this. The company needs to understand that digital retail is another channel to reach the same customer. So for companies who does not have a consistent strategy for omni-channel, they end up setting up a new department to target this without rallying the other conventional channel to join the race, causing fault lines to divide the company.

  1. Natural elements – Natural elements refer to climate and timing. In this era of digital transformation, timing is the more appropriate element. Interestingly, the concept of timing is also reflected in many ancient Chinese classical philosophical studies, like Lao Tzu’s Tao De Jing, who advocated in flowing with “Tao”. 人法地,地法天,天法道,道法自然. For those who observed the masters in executing the TaiChi movement, counteracting the enemy’s strokes involves the timing of absorbing their strikes by moving along the force, not against. 

Not going so far, we are well aware that the current pandemic has been causing major disruptions across all industries and entities in Southeast Asia. Based on “Tao”, businesses, no matter what shape or size, should move along with the on-and-off lockdowns and restrictions. How? There is no other way but to harness the power of technology. 

With transactions online predicted to hit $1.2 trillion in SEA by 2025, it is timely to start shifting your physical records and dealings online, from forms to be filled, payment, and other in-between affairs. If you have not started or considered it yet, you should do so now.

  1. Physical elements – You may ask how physical elements are related to a non-physical environment such as the internet. During the ancient time, this will be about the soldiers’ marching distance and the war’s type of terrain. Currently, and in digital transformation, it is about your market that you operate in (terrain).

Identifying the right market is critical. This is not just a geographical market identification, it is also identifying the approach to the market, and targeting the correct audience type that fits into the company strategy. For example, a clothing line manufacturer may choose to directly market to the consumers. The manufacturer may choose to go for un-addressed country to avoid conflicting with the existing ecosystem of business partners, or may choose a new target audience (youngsters), reaching them through social media influencers, and selling it purely online.

  1. Managers – One cannot execute a plan without the management’s approval. This pandemic showed that innovation is needed to thrive and our recent survey revealed that managers play a crucial role to enable it. 

A great majority (96%) of surveyed companies confirmed that their board plays a direct role in business innovation. This means that if innovation has more weight behind it, there will be more drive and this not only changes the way businesses operate, but their deep-rooted culture and corporate DNA. 

These are welcome findings and a reminder to loop in your C-suite about your digital transformation plan.

Aligning this across the structure is also important. Execution needs to be aligned all the way to the last person in the hierarchy. That means, the many layers of managers are key to its success, and not just lip service from the top. At times, we see the drive from the top, but the effort is thwarted by managers, especially line managers who are used to addressing old markets, using old tools, or are simply not convinced. 

Qualities we need to look for in good managers are : wise, trustworthy, benevolent, courageous, strict ( 将者,智、信、仁、勇、严也。)

  1. Structure and Protocols/Process – Technological advancements freed us of the need to maintain roads for military supplies, to marshal armies in proper subdivisions, and to control military expenditure. However, this was changed to the need to plan our steps, consider our assets, redefine our protocols, and train our employees regularly. 

For instance, the same survey revealed that 95% of innovations in a company fail before the launch and the culprit is lack of planning. Reverting back to digital transformation, it is important to have defined protocols, comprehensive security measures and tools at hand, and a clear road map and division of tasks to make it possible. 

It is important to equip your company before diving into an irreversible transformation. Be sure that you have the updated and secured tools, revisited and adapted your process flows to a digital-first approach, and trained all your employees about securing and managing your evolving IT environment.

What part then, does cybersecurity play in this transformation? One thing that companies mistakenly think is that cybersecurity stifles innovation. In our recent survey, 54% of our respondents shared this thought. But news about data breaches and ransomware attacks should be considered a clear warning about this thinking. Any such breaches will set the company back in terms of digital transformation as it shakes the transformation at the foundation layer. This is akin to old times when you move the front troops too fast, stretching the supplies line and risking the hijacking of your food supplies, and starving the front troops before they reach the destination.

So yes, it is essential that your digital transformation plan include a comprehensive look into cybersecurity at the earliest.

Tech & Innovation

5 Tech trends that will shape businesses in 2022

Here are the tech trends that businesses need to look out for this 2022 as listed by SAP SE. 

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Over the last two years, organizations of different sizes and industries have realized, even more, the critical role technology and innovation play in business and society. The latest developments in technology provided more ways to ensure more connected enterprises, enabling them to survive and thrive amid the ‘never normal.’

However, these advancements in technology have just begun. As organizations prepare for the post-pandemic world, technologies that have been introduced in recent years are expected to continue evolving. The latest advances will also further transform how people interact and work. 

Here are the tech trends that businesses need to look out for this 2022 as listed by SAP SE

Embracing Digital Transformation

Since the pandemic started, the speed at which digital transformation is fundamentally changing the business landscape has dramatically increased. The developments that could have happened in a decade or so were made possible overnight in many industries.

In the Philippines, the digital sector contributes significantly to its economy. This reality indicates that organizations in the private and public sectors will continue strengthening their digital transformation initiatives. Backed by strong government support, these transformations can unlock PhP5 trillion worth of economic value by 2030, according to a recent AlphaBeta and Google report.

Nurturing Sustainability

Nowadays, embracing sustainability has become an integral part of organizations, with business leaders considering it a strategic priority. Aside from top and bottom-line, forward-looking organizations add sustainability and even purpose as dimensions to driving business success. 

Among these organizations is Metro Pacific Investments Corporation (MPIC). As a leading infrastructure investment company, MPIC commits to contribute to the achievement of the 17 United Nations Sustainable Development Goals (SDGs), particularly SDG 9, which seeks to ‘build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation.’

Recently, MPIC strengthened its digital core as it embraced cloud solutions that can help consolidate, modernize, and standardize its enterprise resource (ERP) systems on a single platform. The integration into the cloud is part of the group’s sustainability philosophy of integrating business and environmental stewardship into their investment strategies. It helps improve its operations and augment sustainability initiatives, especially since SAP, MPIC’s technology partner, embeds sustainability into its core business processes.

Meanwhile, consumers are making apparent shifts to more sustainable products and services. According to a Kantar report, 75 percent of Filipino consumers seek out brands that offer ways to alleviate impacts to the environment. Even employees now make career choices based on their employer’s responsibility towards the planet. Thus, it is now even more integral to invest in innovation that considers environmental welfare while fostering economic and social development.

Integrating Decision Intelligence, Hyper-automation

In the Philippines, the Department of Trade and Industry noted that Artificial Intelligence (AI) adoption can increase the country’s gross domestic product (GDP) by 12 percent or equivalent to $92 billion by 2030.

Digital tools like AI, including augmented analytics and simulations, make “Decision Intelligence” a realistic approach to improve organizational decision-making. Each choice or decision in such a system result from multiple process iterations, refined with the help of analytics and data intelligence. With these digital tools, decision intelligence may support and enhance human decision-making and potentially automate it, hence augmenting organizational processes to be more efficient.

Meanwhile, scalability, remote operation, and business model disruption are also becoming possible with the use of Hyper-automation. Before the pandemic, businesses have been automating many processes through technologies like Robotic Process Automation (RPA). This trend will continue to grow for automating business and IT activities using a disciplined, business-driven approach. 

Rising Low-Code, No-Code Tech 

As content creation becomes even more relevant, graphic and website designs have been streamlined so users can simply “drag” and “drop” elements to create engaging content. This trend will extend to no-code AI, where users can create systems by simply “dragging” and “dropping” ready-made modules, removing the “programming language” barrier through simple interfaces. Consequently, it will allow users to create complex and robust AI systems.

Ensuring Total Experience (TX) 

Due to the pandemic, organizations needed to have an excellent Total Experience (TX) strategy or a holistic program that combines customer, user, and employee experiences. With this strategy in place, organizations can help enhance customer satisfaction and employee productivity. 

Organizations need to focus on weaving in these experiences instead of working on them individually to help ensure that they will be more satisfied as teams that work as an integrated unit. This trend is expected to continue as businesses eliminate communication and process silos and emphasize providing unified experiences to their employees remotely working while interacting with customers.

Collaborating with a Technology Partner

As these trends arise, organizations need a technology partner to help them achieve their business goals this year and beyond. For SAP, embracing technology means ensuring that the organization becomes an intelligent enterprise. 

As a technology partner for businesses in the country, SAP helps make it easier by offering solutions like Rise with SAP, an intelligent enterprise framework to help kickstart businesses’ digital transformation journey. In the Philippines, MPIC is the first organization to adopt this cloud technology through this Business Transformation as a Service (BTaaS), offering consolidated solutions and services needed for business transformation in one package.

Rise with SAP also includes SAP and its whole ecosystem of partners assisting organizations in changing at their own terms and pace to be an intelligent and sustainable enterprise by simplifying engagement and providing a guided journey.

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Strategies

Bad news? Send an AI. Good news? Send a human

For a marketer who is about to deliver bad news to a customer, an AI representative will improve that customer’s response. This would be the best approach for negative situations such as unexpectedly high price offers, cancellations, delays, negative evaluations, status changes, product defects, rejections, service failures, and stockouts. However, good news is best delivered by a human.

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Photo by Alex Knight from Unsplash.com

Researchers from University of Kentucky, University of Technology Sydney, and University of Illinois-Chicago published a new paper in the Journal of Marketing that examines the customer response and satisfaction implications of using AI agents versus human agents.

The study, appearing in the Journal of Marketing, is titled “Bad News? Send an AI. Good News? Send a Human” and is authored by Aaron Garvey, TaeWoo Kim, Adam Duhachek.

Are we more forgiving of an artificial intelligence (AI) agent than a human when we are let down? Less appreciative of an AI bot than a human when we are helped? New research examines these questions and discovers that consumers respond differently to favorable and unfavorable treatment at the hands of an AI agent versus another human.

Consumers and marketing managers currently are in a period of technological transition where AI agents are increasingly replacing human representatives. AI agents have been adopted across a broad range of consumer domains to handle customer transactions, including traditional retail, travel, ride and residence sharing, and even legal and medical services. Given AI agents’ advanced information processing capabilities and labor cost advantages, the transition away from human representatives for administering product and services is expected to continue. However, what are the implications for customer response and satisfaction? 

The researchers find that when a product or service offer is worse than expected, consumers respond better when dealing with an AI agent. In contrast, for an offer that is better than expected, consumers respond more favorably to a human agent. Garvey explains that “This happens because AI agents, compared to human agents, are perceived to have weaker personal intentions when making decisions. That is, since an AI agent is a non-human machine, consumers typically do not believe that an AI agent’s behavior is driven by underlying selfishness or kindness.” As a result, consumers believe that AI agents lack selfish intentions (which would typically be punished) in the case of an unfavorable offer and lack benevolent intentions (which would typically be rewarded) in the case of a favorable offer. 

Designing an AI agent to appear more humanlike can change consumer response. For example, a service robot that appears more humanlike (e.g., with human body structure and facial features) elicits more favorable responses to a better-than-expected offer than a more machinelike AI agent without human features. This occurs because AI agents that are more humanlike are perceived to have stronger intentions when making the offer. 

What does this mean for marketing managers? Kim says, “For a marketer who is about to deliver bad news to a customer, an AI representative will improve that customer’s response. This would be the best approach for negative situations such as unexpectedly high price offers, cancellations, delays, negative evaluations, status changes, product defects, rejections, service failures, and stockouts. However, good news is best delivered by a human. Unexpectedly positive outcomes could include expedited deliveries, rebates, upgrades, service bundles, exclusive offers, loyalty rewards and customer promotions.”

Managers can apply our findings to prioritize (vs. postpone) human to AI role transitions in situations where negative (vs. positive) interactions are more frequent. Moreover, even when a role transition is not entirely passed to an AI agent, the selective recruitment of an AI agent to disclose certain negative information could still be advantageous. Firms that have already transitioned to consumer-facing AI agents, including the multitude of online and mobile applications that use AI-based algorithms to create and administer offers, also stand to benefit from our findings. Our research reveals that AI agents should be selectively made to appear more or less humanlike depending upon the situation. 

For consumers, these findings reveal a “blind spot” when dealing with AI agents, particularly when considering offers that fall short of expectations. Indeed, the research reveals an ethical dilemma around the use of AI agents – is it appropriate to use AI to bypass consumer resistance to poor offers?

“We hope that making consumers aware of this phenomenon will improve their decision quality when dealing with AI agents, while also providing marketing managers techniques, such as making AI more humanlike in certain contexts, for managing this dilemma,” says Duhachek.

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Strategies

GoDaddy shares web design trends and tools for your business in 2022

With this new year, GoDaddy, the company empowering entrepreneurs worldwide, shares some website trends and tools for 2022, to help entrepreneurs and small businesses stand out online. 

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With more digital space being taken up by entrepreneurs and creatives, it has also become increasingly challenging to cut through the online noise. Having a business website, once just enough to help a business stand out from the competition, needs to now become a business home on the internet with engaging and impactful web design features designed to capture and sustain the attention of a more active and discerning online audience. This moves engaging and impactful web design from a nice-to-have to a must-to-have for online businesses. 

With this new year, GoDaddy, the company empowering entrepreneurs worldwide, shares some website trends and tools for 2022, to help entrepreneurs and small businesses stand out online. 

Trend 1: Mini-Max Principle

While minimalism could be summarized as “less is more,” sticking exclusively to its core elements, such as clean lines and muted colors, could seem repetitive or even boring. 

However, using this principle, along with pops of color to help stand up and bring attention to areas of your website,  can be a welcome addition on a website. Experimenting with text, image and content sizes could also prove beneficial.  For example, attention to mall details such as bigger buttons, could go a long way in terms of user experience and making your business website more navigable and easier to use. Another detail that sometimes gets taken for granted is typography. Larger text in some sections for emphasis or for visual-break purposes, can help in making your website more unique and for some, easier to read. 

Trend 2: Have a Hero Visual 

Selecting a singular, strong image for your hero section, or the first page of your website that website users will see, can help you more quickly stand out. A key visual that evokes focus, as well as displaying your brand’s values and offerings, versus a clutter of images to fill up a web page, often will resonate better with your viewing audience. 

Image selection is crucial with using those images that feature and support your brand.  Integrating an appreciation for nature and the outdoors are also emerging as a top trend option for images. Influenced by a yearning for travel, or for being outdoors in general, lifestyle shots showing people engaged in activities or those evoking a sense of place, are becoming more popular and appreciated by audiences.  

Trend 3: Leverage a Little Throwback 

Trends come and never really go. Case in point: the staying power of the ‘90s in fashion. The same is true for web design, where we’ll see references that are retro in nature, with websites having helpful information and showcasing a business’ products and services in easy to find spots on a website, never really goes out of style. Be creative and on the lookout for elements that can harken back to times when the Internet as we know it was only beginning to take shape, when people were trying a variety of ideas and innovation in terms of web design, content, and web layout. Try a few web design ideas to see what works best for your business and your brand and engages with your customers.

Consider mixing in modern aspects with retro features, such as serif fonts and smoother textures for your website, along with white spaces, so as to mix modern and retro aspects to further engage with your audiences and tell the story of your business and your brand. 

Choose the Right Website Creator Tool

Using a robust website creator tool can help a business reflect current design trends into their design templates. GoDaddy for example, offers its GoDaddy Website Builder, an easy-to-use web-based tool that gets entrepreneurs and creatives started with a template they could choose from thousands of free options, along with high-quality images available. This tool also comes with a dashboard to manage everything website-related from one place, on a variety of devices, to keep your business running. 

“At GoDaddy, we offer an integrated suite of online tools to help empower entrepreneurs at every stage of their entrepreneurship journey online, helping turn their website into prime digital real estate. When it comes to staying current with trends, our tools are both easy to use, and have options to allow your business website to have a seamless user experience, whether you’re going for a contemporary, retro,  trendy, or some other look and feel that best matches your business and your audience’s preferences,” said Tina Shieh, Marketing Director for Southeast Asia, GoDaddy. 

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