The power to disrupt - in the hands of Malaysia's SMEs

In Malaysia, more than 90% of businesses are SMEs, mainly operating in the services and manufacturing spheres, can turn decline into new growth.

By AvantiKumar
Nov. 28, 2016


Image (CIO) - Digital disruption


Malaysia's small and medium enterprises (SMEs) can become disrupters by better engaging emerging technologies as innovation accelerators, analyst and industry leaders said during a recent closed door session in Kuala Lumpur.

Market intelligence specialist IDC research director for Asean Chin Jun Fwu noted that we are in an era of the third platform, which is pillared by cloud computing, mobility, social media and big data analytics.

"This creates a new set of six innovation accelerators: robotics, 3D printing, cognitive computing, VR/AR (augmented reality), next-gen security and most importantly, IoT," he said.

As governments and large corporates make the push to the digital economy, SMEs risk getting left behind in the flurry of Big Data and Internet of Things (IoT) that customises products and services to individual consumers rather than the mass market, Chin said.

Enterprises can face competition not just from their peers but also from other industries, with banks and telcos being disrupted by tech players like AliPay or WeChat, so why don't SMEs turn the tables and become disruptors themselves? he said.

Chin gave an example of a local company turned disruptor where GS Paper and Packaging decided to evolve based on two megatrends: aging population and increasing urbanisation.

From decline to growth

"As a result of the first trend, GS Paper changed towards manufacturing adult diapers - and then took it a step further, working with healthcare providers on implementing chips in these diapers towards providing better healthcare for adult patients," he said.

"Urbanisation meanwhile will lead to the need for better sanitation systems in metropolitan cities. GS Paper decided to supply toilet paper, aligning this to solutions like Amazon's 'Dash' button so toilet paper can be delivered to customers' doorsteps," Chin said.

"This shows how an organisation in a declining industry leveraged multiple technologies so they now no longer just compete with other traditional players but even disrupt other businesses," he said.

SAP on SMEs in Malaysia 

Photo - SAP Malaysia managing director Terrence Yong (centre) together with IDC ASEAN research director Jun Fwu Chin (left) and SAP head of analytics and insight (Southeast Asia) Kathleen Muller

"In Malaysia, more than 90 percent of businesses are SMEs, mainly operating in the services and manufacturing spheres," said software giant SAP Malaysia managing director Terrence Yong.

"It is these two sectors that are likely to benefit the most from participating in the digital economy, but they are also the most likely to suffer if they do not innovate," said Yong.

He said the digital economy was about individualisation - so how do manufacturers engage with customers to give them the things that they want at the time that they want it, and at a cost which is efficient?

"Big data tools pools a lot of data together on top of predictive capabilities to identify individual customer preferences. That way, businesses can identify what you like and market real-time offers or rewards to you based on this," Yong said.

"This is particularly important to the services sector, which thrives on delivering meaningful experiences to customers," he said, adding that SAP's boardroom planning software, for example, where virtual reality (VR) lenses and connectivity to enterprise resource planning meant that managers could choose the supplier best able to deliver a specific item on a rush job.

"We also have a service provider that looks into Twitter feeds to form perceptions of what you are feeling based on the words you use such as 'like', 'don't like' or 'prefer' - and building on these perceptions with predictive algorithms, deliver certain capabilities to you," Yong added.

Also present, SAP head of analytics and insight for Southeast Asia Kathleen Muller said the reality, however, was  most of the companies in Malaysia do not know how to use and consume all the data at their disposal to make better business decisions.

"In order to simplify and optimise your business processes, you need to use that data to help tell you, your C-suite (top senior executives) and your employees about what you need to do next - not in the next year, but in the next day - how to change and be agile to remain relevant," said Muller.

This article was first published in Computerworld Malaysia 28 November 2016.