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COVID-19 drives digital transformation

‘Business, technology, people’ are success factors

Over the past five years, “digital transformation” has become a buzzword in Thailand. There has been an atmosphere of excitement and pride in achievement as the vast majority of Thais felt their way cautiously into the new digital environment.

Internet usage rose to almost 100 per cent and phone numbers exceeded the total number of Thai people.That was before Covid-19. For businesses, the exciting pace of change has now become a panicked imperative. Digital transformation must happen; the crunch has come.

Until the early months of this year, Thais were becoming actively involved in digital matters. Industries were adapting, particularly commercial banks. Internet banking and mobile banking had seen substantial growth, and up to 70 or 80 per cent of banking transactions were being enacted digitally.

That the COVID-19 pandemic is speeding up the pace of change is perhaps most evident in the retail sector. Many people who earlier did not have to make food orders online have now learned to do so. Businesses that are close to consumers, in particular, have seen radical changes.

In the frontline of the transformation is Bangkok-based business-solution provider Bluebik Group. The firm’s Chief Executive Officer Pochara Arayakarnkul told The Story Thailand that the COVID-19 health crisis had affected organizations in two ways.

First, the behaviour of customers has changed because they are unable to leave their homes, so businesses without a digital channel are unable to sell their products.

Businesses that expect customers to visit their outlets are heavily affected. Many of them have resorted to a delivery platform. Businesses that are mainly based in shopping malls have had to do their marketing through social media, and adopt new techniques such as relying more on social-media influencers.

Second, employees have found it more difficult to carry out their work, so there are impacts within organizations. Businesses with no arrangement for working remotely have been affected. Many of them are adapting by allowing their employees to make greater use of notebook computers. People can now work from anywhere through virtual private networks (VPNs), and some companies are moving their systems to cloud computing.

Another important issue is financial management, where any missteps can increase the risk of business failure. Accordingly, many businesses are shifting towards digital options to increase revenue while cutting costs. One such option, for example, is opting for software-as-a-service and paying for it by month of usage, as a cost-cutting measure.

However, succeeding in digital transformation is not simply a matter of buying technologies or using certain devices.

Understanding ‘business, technology, people’ as success factors for digital transformation

Bluebik believes that businesses themselves must adapt to better suit the digital world.
First, certain aspects of the business have to be better understood: how the business differs from others, and from which group of customers the greatest revenue will come.

Customer behaviour must be known and understood, along with the company’s costs. Understanding these matters will allow a business to obtain the right technology to solve its problems, Pochara said.

Second, in adopting a technology to adapt your business to the digital world, the advantages and weaknesses of the technology must be well known, as well as its cost. While some systems may be expensive, they can also bring substantial returns. For instance, cloud computing may not be cheap, but it is highly flexible.

Third, a business needs a thorough understanding of human attitudes and behavior, since both customers and employees are human. Any change can easily bring opposition, since opposing change is a part of human nature. Going completely digital changes the way work is done, so it is inevitable that difficulties will be faced in adopting a new technology. A way must be found to gradually familiarize both the people in an organization and its customers with the new business format, so that they feel more comfortable with it.

“After careful analysis, you may choose the best technology, but if nobody agrees to go in the same direction, the idea will never succeed,” Pochara warned.

Pochara said that in his experience, there were both successful and failed organizations – as well as those that succeed to an extent – when it comes to digital transformation.

However, most businesses meet with failure, as only a small number of organizations have a clear understanding and vision about business, technology and personnel.

“I believe that in this crisis, nobody has a choice. Despite early failure, businesses must persevere with their plans. They will succeed finally. But those who succeed early in their transformation have a better chance of winning,” he said.

Leadership more important than corporate size

Pochara said the size of an organization was an important factor in digital transformation. Large organizations tend to get more opposition from the people involved, despite a good understanding of technology and business. Therefore, the leader’s ability to tackle problems is essential. While small organizations may be highly flexible, they lack the resources to find alternatives. They may come up with poor business analysis, or be unable to afford the most suitable technology.

“Business size poses different challenges. Leaders with capability and understanding have a better chance of success in digital transformation,” he said.

Many corporate leaders are able to identify the challenges ahead when beginning digital transformation. The main challenges are as follows:

An understanding of business and setting a strategy. Some organizations may lack business understanding and view digital transformation as something that does not require a strategy. They can think only of digital marketing or buying technology, and this will bring them problems.

The ability to use technology. Most companies rely on an adviser or “system integrator” to help with system development.

Resources. Organizations may make the mistake of expecting their full-time employees to carry the burden of digital transformation. They end up failing because digital transformation requires interconnections between processes, technology and personnel.

Lastly and most importantly, leaders may ignore the need to manage the change; they are unable to communicate and persuade efficiently. Good leaders must be able to communicate and convince others that the company is on the right track towards success, and they must be able to ensure that everyone is going in the same direction.

Bluebik helps with end-to-end digital transformation

Pochara said Bluebik was possibly the only company in Thailand offering digital transformation as a service, from setting the strategy to installing an assistive system.

Organizations are assisted through the entire process, from beginning to end. Most of its customers are large- and medium-sized organizations that plan large-scale digital transformations. Bluebik is able to “fit in” at any stage, or assist with the entire process.

It offers five services:
1. Digital strategy: How to increase profit and growth.
2. Prototype creation: Designing products or services, helping customers to design ideas and introduce prototypes for testing to determine the chances for success.
3. Use of various technologies: A lean system, artificial intelligence (AI), e-commerce, mobile applications, and social-media connections.
4. Management of large and complex organizations: In some cases, the work is undertaken with other tech firms supplying or installing the required system. Teams are available to manage the business to the same standards of its own personnel, in addition to providing advice.
5. Big data: Digital transformation brings in data that can be used after being processed with artificial intelligence and machine learning. As a result, new business opportunities can be identified.

“In the next three to five years, things will change completely. The current crisis is forcing most companies to turn digital, and those that remain unchanged will not survive,” Pochara concluded.

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