After 2 years of Covid-19 travel restrictions, AIBP is back meeting up with our ASEAN stakeholders. In our recent Advisory Board Meeting in Malaysia, the board members weighed in their views on innovation and transformation within the local ecosystem.
Key takeaways include:
- Fine tuning assessments of return on investment (ROI) on technology investments
- Incorporating Environmental, Social, Governance (ESG) goals into the business
- Improving awareness on Data Security.
Looking beyond traditional metrics in ROI assessments
While financial metrics like revenue and cost savings are the most common, projects often touch on various dimensions, looking beyond a monetary amount to measure the benefits gained would provide a better assessment of overall returns.
In 2021, AIBP conducted a study of 448 listed companies across 5 markets in ASEAN, where we looked at the correlation between IT spending and business performance. This study is based on data between 2011 and 2020.
In ASEAN, interviews with IT professionals have shown that firms tend to lean towards incremental innovation rather than disruptive innovation.
Especially as companies progressively incorporate the ESG goals into business plans, there is a consensus that ROI can be perceived with a variety of both tangible and intangible metrics. The maturity of metrics would differ from organisations in different industries and it is something that has renewed focus by senior managers.
Improving Awareness on Data Security
It is also interesting to note that according to the ASEAN Enterprise Innovation Survey 2021/22, nearly half of the enterprises in Malaysia have implemented their digital transformation plans, while 28% have identified the strategy they intend to implement.
22% of surveyed enterprises expected a more than 75% ROI on new technologies in 2021, up from 8% the previous year.
Aside from positive returns, new technologies also introduce new threats. Data security is a crucial consideration for enterprises and customers, and enterprises need to consider not only the protection of data, but also the privacy of data. Acknowledging the potential of technology to drive enterprise development, organisations are equipping their operations to stay ahead of the curve.
National Strategies for Malaysia’s Digital Economy
With the launch of the National 4IR Policy in 2021, Malaysia continues to push towards harnessing the full potential of the Fourth Industrial Revolution for the digital development of the nation, targeting an increase in productivity across all sectors by 30%. Aligned with the Shared Prosperity Vision 2030, the policy outlines 4 policy thrusts, 16 strategies and 32 national initiatives to build a sustainable future for its citizens.
Malaysia also introduced the National Science, Technology and Innovation Policy (NSTIP) 2021-2030 last year, bringing the concept of Science, Technology, Innovation and Economy (STIE) to emphasise the significance of Science, Technology, and Innovation (STI) in shaping the country into a high-tech nation. The policy aims to increase Gross domestic expenditure on R&D as a percentage of GDP (GERD/GDP) to 3.5% by 2030.
Source: Ministry of Science, Technology and Innovation (MOSTI)
Stronger Partnerships and Local Ecosystem Development to drive innovation
Undeniably, both the government and local industry are working on several fronts in order to enable the digital transition and push the national digital economy agenda.
Yet, in order for digital economy benefits to materialise at scale, adoption and implementation challenges by local enterprises have to be recognised as key barriers that may delay the progress of various policies. Strong partnerships within local ecosystems are key in improving the probability of success.
Throughout our role of driving digitalisation ecosystems in Malaysia, we have seen first hand how the discussion on digital transformation has changed from understanding the benefits to deriving real value, both financial and non-financial from implementation projects.
AIBP is excited to have the opportunity to meet up with our stakeholders in Malaysia and look forward to more in person discussions over the next few months.
AIBP Conference & Exhibition Malaysia will be held in Kuala Lumpur on 18 – 19 October! If you wish to join us, you may register interest here.
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2 June 2022