This article first appeared in Digital Edge, The Edge Malaysia Weekly on August 28, 2023 - September 3, 2023

When hearing the phrase “digital transformation”, I know that for some people, it makes their eyes roll due to its reputation in corporate speak for being overused. However, this phrase is not just an aspirational goal but a functional one too.

From work meetings to shopping or connecting with family and friends, digital transformation has found its way into every aspect of our lives. While many people feel that it is a result of the Covid-19 pandemic, I have a completely different view.

Online meetings and online shopping and everything from artificial intelligence (AI) to machine learning (ML) have been around for some time. They did not pop up overnight. To some extent, businesses even began applying these technologies as part of their processes and business models to unlock a myriad of new market opportunities wrought by global shifts.

The Covid-19 pandemic merely gave businesses the jolt to be more adaptable and agile in embracing evolving environments, addressing changing expectations and dynamically tackling challenges, all in the same breath.

When we look at digital transformation from the point of view of businesses, it is like a Pandora’s box — it gets a lot more complicated at every turn. But it is the kind of complication that offers an abundance of opportunities.

Businesses that have successfully undergone digital transformation are well aware of the holistic architectural changes required, which cover everything from leadership styles, culture and processes to business experiences for employees as well as customers. It also entails muddling through misinformation, misconceptions and hype.

And all of this, when put together, can be extremely daunting and deters a lot of businesses from embarking on their digital transformation journey. In fact, in 2020, a study by Forrester revealed that as little as 45% of the Malaysian services decision-makers said that their firms were actively engaged in digital transformation. The number, however, did not change in 2021. Unsurprisingly, firms that shelved their plans to start digital transformation initiatives in 2021 were also more cautious to do so in 2022.

Below is a list of some misconceptions that businesses should know of as they chart the way forward through a steadier path in these stormy and turbulent waters.

(i) Digital transformation is for the big boys

Wrong! If you fall within the micro, small and medium enterprises (MSME) category, you are even more at risk of being drowned and require digital transformation the most to stay afloat and slowly navigate the waters.

Small businesses tend to get nervous because it becomes intimidating once they hear about the new technologies — whether it is the Internet of Things (IoT), big data, augmented reality (AR), blockchain or the metaverse — and jump to the conclusion that such transformation requires the pumping in of large sums of investment and an entirely new technologically trained workforce.

This leads them to believe that digital transformation is something that is only applicable to big businesses, which is simply not true. With that mindset, MSMEs are dodging opportunities and losing out to others.

A lot of these technologies have been democratised and are made widely available. They come at very affordable rates with very lenient payment plans. When it comes to leveraging new technologies, I urge you to take a quick glimpse at today’s business landscape and you will find many fields where start-ups have proven that their size and nimbleness are an opportunity.

In July last year, a report by HSBC and KPMG titled “Emerging Giants in the Asia Pacific” identified 10 potential unicorns in Malaysia, proving that with the implementation of technology, small businesses can grow from tiny acorns to mighty oaks on a par with the big market players and that are able to disrupt traditional markets.

(ii) Digital transformation means even more rigid processes

The very core of businesses are three things: producing high-quality products and services; selling as many of these products and services as possible; and steering far away from things going wrong.

This mindset, unfortunately, forces a system that is rather rigid because once you have something that works, you tend to keep doing it over and over again. I mean, why fix something that is not broken, right? Thus, the status quo is entrenched in decision-making and corporate culture.

However, this is not going to last. Today, innovation and creativity in business take precedence. Just 10 years ago, restaurants had to put out tables and chairs for customers to dine in. Today, these very same restaurants are looking at cloud kitchens for their business operations. A rigid process is not conducive to uncovering new product innovations that could potentially transform the business and way of work.

Applying technology to augment existing products and services to create new service offerings represents an investment of time, energy and resources that might not pay off and this, as a result, is avoided and shunned by rigid companies.

To achieve seamless digital transformation, businesses must have the willingness to take the road less travelled. Ask yourself, “If I want to be relevant in the next five or 10 years, what am I doing to revise my processes or to refine and evolve my product and service? What am I doing differently to stay ahead of the competition?”

The word “transformation” itself denotes evolution that is not in lockstep with what was done previously. Take it from me, without taking a chance and being open to a little bit of change, your business endeavours are always going to be cut off at the knees. Learn to be comfortable with the uncomfortable.

(iii) Digital transformation = humans being replaced

While it is inevitable that some roles may become obsolete in the near future, businesses damaging their brand reputation is just as inevitable if they become too eager to replace their existing team with new machines.

What is certain, however, is that the transition of tech-driven processes and automation must be managed delicately. For instance, businesses must strategise their digital transformation journey and consider redeployment opportunities with new training for employees who have skills that will be displaced.

Complex issues such as customer service will not be automated or given to machines to handle any time soon. I believe that basic human “soft skills” such as creativity, communication and problem-solving are and will always be a valuable resource to several businesses as other new technologies emerge in the coming years. Generating an understanding of how they may be utilised will be as vital as the implementation of any technology.

One thing is for certain, we naturally gravitate towards the human touch and as much as we feel technology is taking over our lives, we will require humans to power that technology. It is a matter of unlearning what we once knew and relearning new things to remain relevant.

So, whether we are tired of the phrase “digital transformation” or not, there is just no running away from it. There is a lot at stake for businesses and they cannot afford to lose out on the vast opportunities it presents.

The bottom line is businesses must strive to keep abreast with the rapid evolution of digital transformation, recognise its importance and learn to embrace new technologies and solutions to stay competitive.

It is a long and tedious process and you may get distracted and overwhelmed along the way by the flashiest technologies and their projected benefits but it is all part of the journey. What works for others may not work for your business. There is unfortunately no one-size-fits-all solution to achieve digital transformation. Each business must chart its path based on its specific situation and needs.

Transforming digitally is never something you should do on your own. Speak to the industry champions. If not, come to Malaysia Digital Economy Corporation (MDEC). Entrusted to drive the digital transformation agenda in the country, MDEC is an immersive space conducive to the fostering of innovations. There are plenty of digital transformation programmes that will help your business employ sound innovation strategies to guide you through your digital transformation journey.

Under programmes such as Digital Catalytic Programme (Pemangkin), the government is deploying nearly RM238 million in investment to industry developments, including digital infrastructure and education, to ensure the workforce is equipped with the necessary skills to succeed in the digital economy in various sectors.

Initiatives like 100 Go Digital, for instance, was launched to spur the adoption of digitalisation among traditional Malaysian businesses, while Digital Trade promotes interoperability and greater harmonisation of standards and regulatory approaches as well as facilitates trade within and across borders. Know that you do not have to embark on your digital transformation journey alone.

Mahadhir Aziz is CEO of Malaysia Digital Economy Corporation (MDEC), the government agency leading the digital transformation in the country

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