Digital Transformation in Singapore

A quick check on Google Trends shows that the online search interest in “digital transformation” has increased exponentially in the recent years. Global search interest has increased more than two-fold within the last two years. Why so? Is this just a passing buzz or something really worthwhile to bring everyone’s attention to?

digital transformation google trend

Relative interest worldwide for search term “digital transformation” on Google Trends from early 2000s to September 2018.

What exactly is this “buzzword”?

Digital transformation is the adoption of technologies that differentiate how businesses and organisations run, to create value, promote growth and increase competitiveness. For an owner of a physical store, this can mean moving its business online, getting a proper digital communication channel in place (e.g. email, online chat) and having a supporting delivery management system. By going online and digital, the retailer is able to overcome limitations caused by locality restriction, and bring its playing field to a whole new level by leveraging on its e-commerce platform. While digital transformation can be loosely understood as occurring at all levels – from individual (online social networking platforms), business (e-commerce), to the national level (Singapore’s Smart Nation initiative), we will focus on what digital transformation entails for organisations and businesses.

Nothing beats a real-life example to wholly understand and appreciate what a digital transformation journey (can) entail, and the value it can bring for a company. Let’s take a look at the classic example of how Pitney Bowes, an American company with roots in the sunset mailing industry, has evolved, by leveraging on digital tools to keep their business going, and growing.

The case of Pitney Bowes

Pitney Bowes is a nearing century-old company with its businesses grounded in the mailing device industry. However, with the rise of digital technologies in the 2000s, the company has the foresight to know that this will affect its business negatively and they cannot stay status quo. They started to acquire and diversify into different industries. In 2008, the financial tsunami swept by and its mailing business was badly hit. Also, the cost pressure arising from the numerous business acquisitions compounded the issue. There was a need to resolve this.

The company started looking into streamlining their business processes. As a result of acquiring so many businesses, the company was operating with several different supporting systems and had close to 40 general ledgers. There was a need to adopt a centralised system that was based on up-to-date technologies. Pitney Bowes acted swiftly with this adoption and it resulted in decrease in the company expenses by over 100 million. They then channeled these cost-savings to into product innovation.

Pitney Bowes’ strategic shift from just basing its business on the mail devices (which they see its value dwindle by the day) to technology-fueled growth markets such as shipping and e-commerce is worth highlighting. These developments fueled growth and increased competitiveness for the company, who reported their fastest annual revenue growth in a decade, in 2017.

As part of its digital transformation journey, Pitney Bowes combined mailing and the use technologies such as Internet of Things (IoT) to help businesses garner information to better deliver client-centric services. This helps companies, which they serve, use mail in a more effective way reach their target audience. In the same thread, Pitney Bowes use tracking and delivery information to predict when a parcel will reach the consumer as part of its shipping endeavour. Such value-add is important for companies to remain competitive amidst increasing consumer expectations.

The organisation continued to evolve and innovate. Pitney Bowes Commerce Cloud was introduced in 2016 to empower their clients to identify customers, uncover opportunities, power shipping, facilitate communication, and manage transactions.

You can check out the interview with Pitney Bowes’ Chief Executive Officer, Marc Lautenbach, on their digital journey via the following link: https://www.coursera.org/lecture/bcg-uva-darden-digital- transformation/interview-with-pitney-bowes-ceo-marc-lautenbach-iUlhI

(Resource credits: Digital Transformation course by Boston Consulting Group and the University of Virginia on Coursera)

As you can see from the Pitney Bowes’ example, digital transformation takes time and is not a once-off change. In fact, it is a continuous process that can help companies stay competitive and adaptable as a company’s goals, needs and environment evolve. When technologies are applied strategically, organisations can reap the benefits of staying competitive and relevant as such transformation can translate into efficiency, cost-savings and also propel new areas of growth for companies.

So is digital transformation a transient buzz? Clearly no, and it has been and will be an increasingly pervasive phenomenon.

Digital transformation is increasingly pervasive across industries, in fact, on exponential terms. While it was observed to be limited to a few industries in the ‘90s, such as the electronics industry, its reach has skyrocketed from the 2010s onwards, into all industries. One may wonder what are the underlying factors behind such a transformative climate. According to IBM Institute for Business Value, changes in worldwide connectivity, and consumer empowerment in terms of online data and varied choices (thereby leading to higher expectations), are the key catalysts of digital transformation.

A recent comment by Singapore’s Minister for Finance, Mr Heng Swee Keat at Singtel FutureNow Innovation Centre, a locality that aims to promote digital transformation amongst enterprises, sums the importance of being transformative digitally.

Minister Heng shared: “I believe, especially in this age of rapid technological changes, that innovation is critical to how countries, companies and individuals can continue to create value and benefit.”

A report by the World Economic Forum has also called companies to digitally transform now in order to compete effectively in this digital era: “We may still be in the early days of the digital revolution, but it is the strategic plays that companies make today that will define their long-term future in the digital economy.”

To see the full article on the launch of Singtel FutureNow Innovation Centre and Singapore’s Minister for Finance, Mr Heng Swee Keat’s sharing, please visit: https://www.straitstimes.com/singapore/manpower/theres-a-role-for-all-in-promoting-new-ideas-heng

To see the report by World Economic Forum on digital transformation, please visit:

http://reports.weforum.org/digital-transformation/digital-enterprise-recommendations/

So now what?

A mind-boggling question that many organisations have after knowing the importance of the digital transformation is – “So how and where do I start, which technologies should I adopt?”

No worries, we are here to help. We have planned out the concrete roadmap that your organisation can embark on and pieced them down into simple manageable steps.

Stay tune to the charted roadmap in our subsequent articles – and we promise to guide you well!

Do you know that “digitisation” is not the same as “digital transformation”? (To be placed as a side panel)

This is one term that you will commonly come across when trying to understand digital transformation – “digitisation”.

While at the first glance, both “digitisation” and “digital transformation” may seem to refer to the same thing, they don’t. The former refers to the conversion of information from an analogue, or physical form, into a digital one. A simple example is the scanning of a written report and converting them into PDF format. Digitisation can be seen as one of the many points in the journey of digital transformation where an organisation embark on, and it is usually during the early stages.

 

       

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