ASEAN can benefit by simplifying business through technology, says SAP ahead of WEF

According to Scott Russell, President and Managing Director of SAP Southeast Asia, digital technology can prove an invaluable tool in helping businesses in the region simplify their business processes. This is especially true when it comes to the newly created ASEAN Economic Community (AEC).

“Businesses should start thinking simple in order to maximize opportunities that arise within the AEC,” said Russell. In support of this, Russell highlighted a recent survey by Asian Development Bank and Institute of Southeast Asia Studies which found that less than 205 of businesses in this region are AEC-ready.

Recording a combined GDP of US$2.6 trillion in 2014, ASEAN is the 7th largest economic bloc in the world and the 3rd largest in Asia; a zone that encompasses a market of 622 million people. Russell said while the creation of the AEC delivers abundant opportunities for the Southeast Asia (SEA) region, it also creates new business challenges and complexities, which must be managed by companies of all sizes if they are to remain competitive in the integrated marketplace.

The 10-member countries of ASEAN (the Association of Southeast Asian Nations) – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, the Philippines, Thailand and Vietnam – had signed a historic landmark agreement in end 2015 that would lower business restrictions and enhance trade opportunities to make ASEAN more competitive.

“The beauty of ASEAN lies in its diversity. Yet this diversity also results in high barriers to entry for businesses. Across the region, businesses are operating on different regulatory frameworks and policies, and running on varying levels of infrastructure maturity,” he said ahead of the World Economic Forum (WEF) on ASEAN which will be held in Kuala Lumpur on 1 and 2 June 2016.
Russell is a panelist at the upcoming WEF and will be touching on the topic of digital transformation.

“If I were to describe what it is like running a business across ASEAN in a word, it would be ‘complex’,” said the IT veteran, regarded by many industry observers as a “visionary in the field”.
Other challenges for the region include manpower issues, increasing population size that stress national industries, disagreements on key regional issues such as the haze, territory disputes as well as national security, he added.

Russell believes there is only one way to resolve complexity, and that is to simplify through the use of digital technology.

“Digital technology is not only an enabler, but also a great simplifier that will level the playing field for businesses across the region. For instance, organisations can embed regulatory nuances into business processes built within the technological layer,” he said.

He gave the National Heart Institute in Kuala Lumpur as an example. Last year, it made the decision to digitise its processes to gain real-time insights into inventory levels and improve workflow efficiency, while effectively meeting the new Malaysia Goods and Services Tax (GST) Act 2014.

Russell also said that ASEAN’s young demographic is more technologically savvy and are using the internet a lot more. In a region where 50 per cent of the population are under 30 years of age, and 90 per cent of those under 30 have access to internet, digital is the future. It’s no surprise that traditional businesses are starting to feel the pressure to digitise their business.

With technology levelling the playing field, younger organisations can have stronger digital capabilities and strategies to engage customers, partners, and employees much better than a multi-national company can. Another major challenge is manpower, and Russell said the war of talent will only get tougher as labour movement across ASEAN countries increases with the AEC. Organisations should take a more sophisticated approach to sourcing and managing talent.

“Talent management is both an art and science. The use of big data and analytics will grant companies the added advantage of being predictive rather than reactive, enabling them to manage the workforce with foresight rather than in hindsight,” he said.

“Crucially, harnessing digital technology enables companies of all sizes to gain footholds in new markets, and provides the opportunity to establish a prominent global presence to realise their potential of becoming significant players in international markets,” he added.

“At SAP, we we are ready to enable digital business and to provide unprecedented innovations required in today’s digital economy,“ he concluded.