KUALA LUMPUR – SAP SE yesterday announced the findings of its new study of enterprises in Southeast Asia, including Malaysia, uncovering the state of businesses and their strategic priorities, as well as challenges and opportunities for post-pandemic growth.
The regional study’ Digital, resilient, and experience-driven: How enterprises in Southeast Asia can prepare for the new economy’ reveals that enterprises in Southeast Asia are gaining steady momentum prioritising growth and customer experiences. However, they face significant challenges in the areas of talent attraction and retention, cloud adoption, and gaining insights from data.
Conducted in collaboration with Oxford Economics, the study surveyed 600 senior executives, including 400 from SMEs with less than $500 million in revenue, across Singapore, Malaysia, Thailand, Vietnam, Indonesia, and the Philippines.
Forging A New Experience-led Growth Path
As economies begin to identify emerging pockets of growth, enterprises have also continued to adapt with resilience, transforming their operations to meet evolving consumer expectations in a new digital economy.
Enterprises in the region identify customer experience as a strategic imperative for survival and growth, with more than a third (35%) saying service excellence is now their primary source of value and differentiation. Positive customer experiences have also become the foremost strategic consideration for businesses in the region, with key factors being personalisation for the customer (59%), providing high-quality products and/or services (55%), ensuring data protection and privacy (53%) and offering competitive pricing (51%).
For large enterprises in Malaysia, the percentage was even higher for service excellence at 39%. Meanwhile, emphasis on improving the customer experience, service excellence and product excellence was at 45%, 39% and 27% respectively. On the data protection and privacy, and competitive pricing fronts, the percentages were at 66% and 81%, respectively.
Meanwhile, Hong Kok Cheong, Managing Director of SAP Malaysia, added that, by transforming their business models into becoming intelligent enterprises, local organisations should be able to respond to individual customer needs, engage talent in new ways and create disruptive business models that are critical industry imperatives.
Set against their larger counterparts, SMEs in the region find it increasingly challenging to keep pace with uncertainties and external challenges in the current business environment. SMEs surveyed cite difficulty adapting to a rapidly changing marketplace (40%, vs. 29% of larger enterprises), keeping up with changing customer wants and needs (38% vs. 43%), and difficulty retaining customers or driving repeat business (34% vs 30%) as top challenges to meeting their strategic priorities.
Becoming Best Run: Hurdles to Overcome
As enterprises adapt their operations to overcome both internal and external challenges, many of them recognise technology as an enabler to help drive greater business outcomes.
Automation and digital technologies are most believed to support business goals by increasing process efficiency and reducing error, risk and cost (56%). This is followed by reducing overhead costs (45%), allowing employees to focus on higher-level business tasks (39%), and increasing productivity through transformation and intelligent process automation (37%).
A deeper dive into the internal challenges to improving customer experiences reveals businesses’ hurdles around gaining visibility over their operations and the lack of digital tools that help them to track and direct strategic business priorities. Those surveyed cite difficulty competing with larger organisations (50%), lack of technology for analytics (43%), lack of capable and motivated workforce (40%), lack of adequate data (38%), and difficulty scaling for growth (33%).
To secure quick growth, enterprises surveyed are employing short-term actions to improve customer experiences, with many investing in user-friendly digital experiences (39% have made this change across the organization), reducing prices (38%) and increasing after-sales maintenance (37%). Yet, just 58% say they have made at least moderate progress towards digital transformation, despite the ability of such tools to grant them insights into opportunities to improve their customer experiences; among SMEs, even fewer, just 45%, say they have made moderate progress towards transformation.
Notwithstanding these challenges, SMEs see their nimbleness and ability to build trust with customers as their inherent competitive advantage against larger competitors, which can give them the strong foundation they need to securely experiment with new technologies and business models.
Skilled Talent a Key Engine for Growth
Along with technology, enterprises in the region understand that an engaged workforce will help unlock future growth in a fast-growing digital economy.
Even as enterprises forge ahead towards business recovery, many recognise that their workforce is crucial to driving success. In line with this, businesses surveyed expect moderate growth over the next three years in employee productivity (74%); customer loyalty and satisfaction (71%), market share (71%).
However, upskilling talent is cited as the top internal challenge by one in three (35%) of enterprises surveyed to meet strategic goals and the evolving organisational and customer needs 29% of enterprises face an inability to gain insights into the employee.
With talent critical to supporting agility and transformation, and this has seen businesses surveyed take steps to improve employee experience during this time—including streamlining organisational processes (29%), investing in employee training and development (38%), and modifying flexible work policies (25%).