Going Digital: It’s all about purpose, planning and people

Last updated: 06 January 2020

Published on: 02 December 2019

By Jeremy Chan

When the German inventor Karl Benz patented his ‘motorwagon’ in 1886, the business owners of his time who were involved in horse husbandry, saddle-making or carriage assembly probably didn’t bat an eyelid. After all, in those days, horse-drawn carriages were the main mode of land transportation; a wheeled contraption hardly seemed like a threat to the industry at large.

But we all know how that story ends.

At the SG:D Industry Day on 17 October 2019, speakers and panellists highlighted that a similar form of disruption is currently taking place—this time driven by digitalisation. Across the globe, companies that embrace cloud computing and artificial intelligence are pulling ahead of their competitors that are slower to incorporate these technologies into their operations.

Dr Michael Grebe, Managing Director and Senior Partner at Boston Consulting Group (BCG) Munich, called this the separation of leaders and laggards. “More than 60 percent of digital champions (digitally enabled companies) outperformed their peers in terms of time to market and cost efficiency,” he said during his presentation at the event, adding that the gap between the digital leaders and laggards is widening.

In for the long haul

Citing BCG’s analysis of more than 5,000 global companies, Dr Grebe emphasised how digital leaders achieve their success: on average, digital leaders have more than ten percent of their workforce in digital roles and invest more than five percent of their operational expenditure into building digital capabilities.

“Whereas the digital laggards only pilot [digital projects], the leaders can actually scale up the pilots and connect them to the core of the business,” he said.

However, embedding digital technologies into day-to-day operations is easier said than done, noted Mr Ang Kiam Meng, Group CEO and Executive Director of the Jumbo Group of seafood restaurants; and Mr Joshua Koh, CEO of Commune Lifestyle, both panellists at that morning’s keynote panel. The two business owners cautioned against jumping into the development of IT solutions without first figuring out where digitalisation can bring the greatest value to a company.

Another key lesson is to think ahead for the long-term. “A lot of times, when we start [an IT project] it is about quick fixes,” said Mr Koh. This could lead to the creation of an IT solution that plugs a short-term gap but cannot be integrated with the next digital platform that comes along, resulting in a “white elephant”, he added.

Mr Ang agreed, noting that IT vendors ought to work closely with companies to perform deep analyses of business needs and future ambitions before starting to develop a solution. “The way I see it, the coding and testing [of an IT solution] is very simple if you have already done a proper analysis of the user requirements,” he quipped.

Going deep into the customer’s psyche

While some IT solutions are meant to cover a broad range of business activities, others perform better when they are applied to a very narrow domain. Chatbots are a case in point, said Mr Dennis Tan, Executive Vice President and Head of Consumer Financial Services at OCBC, during the panel discussion.

“We can always teach a chatbot to do many things, but from our own experience, having a chatbot focus narrowly on one thing and doing it really well adds a lot of value to the customer,” he said, using OCBC’s Emma chatbot as an example. Instead of fielding the entire range of customer queries, Emma only deals with home and renovation loan matters and can provide clear and meaningful responses on those topics to customers.

“Since last year, we’ve also worked with IMDA’s Digital Services Lab to get Emma to take instructions and converse back to clients through voice,” he said, adding that Emma is on its way to understanding ‘Singlish’ and pronouncing words like ‘Hougang’ in a Singaporean accent.

Power to the people

Amid all the hype over technologies and customer value, employees often get left out of the conversation, despite the fact that they are usually the ones helping to translate the outputs of digital tools into profit. Therefore, digital solutions must be easy to use by the relevant personnel.

“Something as simple as [a more intuitive] interface could allow users to assimilate digital tools [such as artificial intelligence] better,” said Mr Steve Lee, Chief Information Officer and Senior Vice President of Changi Airport Group, during the panel discussion.

With new ways of working come new risks, but as the adage goes, ‘no risk, no reward’. Hence, Mr Lee recommended that organisations create an environment where it is safe for employees to test their ideas and fail, picking up lessons along the way.

“And of course, [companies ought to] constantly train and upskill people, who are the 'heart' of the business. Because in the end, Services 4.0 is still about people serving other people, not machines serving us,” he said.