Pushing through the pain, to reap the benefits
Businesses looking to digitally transform their organisation, can look forward to a number of advantages. However, the process comes with its own host of challenges. Older brick and mortar type establishments have more obstacles to overcome, than startups who are born as a digital enterprise. Despite the challenges, the benefits are significant enough for companies to venture on a journey of transformation.
During Microsoft’s announcement of the findings of it’s recent digital transformation study, EITN had the opportunity to speak to Nando’s Chickenland Malaysia Sdn Bhd’s IT Director, Andre Chan. Nando’s is a food and beverage (F&B) company, famous for it’s Peri Peri roast chicken, that operates over 70 outlets in Malaysia and 11 in Singapore. It started on its digital transformation journey a little over 18 months ago and one of its first initiatives was to get a realtime picture of its daily sales performance.
“Very few F&Bs are cloud based F&Bs – where the servers are in the cloud. When the servers are in the cloud, getting data is easy. In a legacy business, the servers are in almost every outlet. Only way to get back data is during what we call end of day tasks. The data is sent to us and only then do we know what the total sales is, ” said Chan.
“Prior to the [digital transformation] journey, knowledge about how the business performed comes one day late. So we only know how we performed today, tomorrow. In many organisations that is how it is. But a company that has moved digitally can tell you what the sales are now, even though we are still using legacy systems,” he added.
Nando’s worked with Microsoft to take the data from their legacy system and make it available in realtime. The data from the restaurants are pushed into the cloud and once there, it becomes available for their data crunchers to work with.
And what is the benefit of this? “The benefit of knowing your sales now, is knowing what actions should be taken. We are a company that sells chicken. Knowing the number of chickens that’s available for sale is important. Going to a Nando’s restaurant and not being able to order peri peri chicken… that is so wrong,” pointed out Chan.
Knowing the status of sales in real time, allows Nando’s outlet managers and the area or central managers to take the necessary action throughout the day.
Realtime sales data is only one aspect of Nando’s digital transformation journey. There is also work being done in HR, finance and its supply chain. “It’s an ecosystem [transformation],” explained Chan, where everything is inter-related.
Digital transformation has made things easier for Nandos’ employees as well as its suppliers as the company has also set about digitally transforming these partners. It doesn’t mean anything that Nando’s can do EDI, when its suppliers do not accept EDI, said Chan.
This statement illustrates a key finding in Microsoft Asia’s Digital Transformation Study. The study showed that Malaysian business leaders were prioritising their digital transformation strategies in 4 areas – empowering employees, engaging customers, optimizing operations and transforming with new products, services or business models. The Microsoft Asia Digital Transformation Study surveyed 1,494 business leaders from Asia, including 113 from Malaysia. All respondents were pre-qualified as being involved in shaping their organisations’ digital strategy and were from organisations with over 250 employees or above.
Michal Golebiewski, Chief Marketing & Operations Officer, Microsoft Malaysia said “The Microsoft Asia Digital Transformation Study has shown that business leaders have started to act on the need for digital transformation to address the challenges and opportunities within their organisations. We have learnt that organisations that do not evolve fast enough will be less competitive or even obsolete as they face disruptions in every industry.”
“It was interesting to learn that 88% of business leaders felt that new data insights would lead to new revenue streams. And yet, it is a concern to see that while there is widespread acknowledgement of the need to transform, they are doing so incrementally,” he added.
Golebiewski also brought up the constant pressure from newer, agile and tech savvy players disrupting industries across Asia. “The transformation of products and new revenue models provides the greatest opportunity for organisations to truly lead rather than be disrupted. Leaders need to rethink business models, find new data insights which lead to new revenue streams,” he added.
One such disruptor is Doctor2U who are changing the way healthcare is provided to the average person. It started in October 2015 and is the digital arm of the BP Healthcare Group.
“We started of as a digital healthcare company. Basically as an Uber for doctors – to get a doctor to a patient’s door in 60 minutes. All our products and services are built on top of the Microsoft Azure cloud computing platform. It gives us a lot of flexibility…and we can scale as quickly as we need to without having to get our own servers. We were born in the cloud and born digital,” explained Keegan Flynn, co-founder of Doctor2U.
Doctor4U is a small company with 15 employees ranging in age from 23-30. Flynn felt that companies that are entrenched in bureaucracy and standard operating procedures, would have a bigger challenge in changing management’s and employees’ perceptions and getting them on board.
“We are all aligned to the digital trend [at Doctor4U] but we have to push against the current with the traditional model of healthcare. Major healthcare companies, and insurance agents, with the way they do business and the way customers are being served – one of our biggest challenges is getting our customers and the market comfortable with ordering healthcare services through a mobile app,” he added.
Even Chan, brought up the issue of resistance to change and admitted that getting the entire workforce to pull together was a challenge. “Some employees have embraced the change while others find it difficult. It’s not easy to change when you haven’t started from day 1. The millenials are the easiest because they are socially engaged,” he said. He added that it’s very positive to see the older generation adapting.
Doctor2U also spoke about the advantages of leveraging of the expertise of their technology partners. “If you are a small business and trying to do things like cyber security or data storage on your own, you are really going to put yourself at risk. Don’t try to reinvent the wheel when there are these great platforms available,” elaborated Flynn. By doing this, they are able to focus their efforts on growing their product offerings and growing their customer base.
According to Flynn, 25 percent of Doctor2U expenses are invested into technologies and the right protection. The company keeps its operating cost low by minimising on capital expenditure and keeping operating costs such as salaries low. “All our doctors are part time contractors who pick up requests in their free time. No need to pay salaries of full time doctors or nurses. Basically our costs go into marketing, salaries and subscriptions to IT platform such as Azure and data storage,” said Flynn.
Other findings from the Microsoft study were that:
Despite a majority of business leaders being aware of the urgent need to transform digitally to address the changing business climate, the transformation journey for most organisations in Malaysia is still at its infancy. Only 34 percent of business leaders have a full digital transformation strategy and less than half (47 percent) are in progress with specific digital transformation initiatives for selected parts of their business. 19 percent still have very limited or no strategy in place.
The top barriers to digital transformation are, in order of priority, lack of organisational leadership skills, lack of supporting government policies and ICT infrastructure, cyber threats and security concerns, uncertain economic climate and lack of a digitally skilled workforce.
The infographic above provides more findings from the study as it relates to Malaysia.