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Community Blog Seeding Digital Transformation in Southeast Asia – Part 2: Challenges and Focus Areas

Seeding Digital Transformation in Southeast Asia – Part 2: Challenges and Focus Areas

Part 2 of this 8-part series discusses the first set of challenges business owners face while strategizing digital transformation for their enterprises and the focus points for a strong strategy.

By Shantanu Kaushik

In Part 1 of this series, we discussed how the majority of businesses have upgraded to get by in the industrial scope of things and how digital transformation is inducing technology into the mix by shifting the culture altogether.

This article discusses the first set of challenges business owners face while strategizing digital transformation for their enterprises and the focus points for a strong strategy that encompasses the core business values and requirements for an enterprise to embark on their digital transformation journey. We will start with the business owner’s perspective for this journey.

As we discussed previously, every organization has a unique digital transformation journey. The sections below detail the challenges some organizations face while contemplating a transformational plan for their enterprise.

Business Owner’s Perspective

The most successful business owners have a fair idea about the capabilities and limits of their organizational skills. They have precise information and can account for the capabilities and sustainable workloads of their teams.

The top administration of an organization looks for five major aspects while considering a shift or change:

  1. The total time for the transformation
  2. Business Impact
  3. Current Business Yield
  4. Projected Business Yield
  5. Costs Involved

They ask their management, HR, and sales departments to project numbers from all the points listed above. At this particular time, they can reach out to the cloud provider (or digital transformation partner) to assist with the numbers. Alibaba Cloud provides a cloud migration consultation service you can use to formulate a strong strategy.

Business owners depend on numbers to project how beneficial the transformation could be and how it will support them to stay in business or attain a better growth cycle. Here, Big Data assessment can be a vital tool. By analyzing the historical data of the organization, they can pinpoint the core transformation areas and focus on the areas (or departments) that need transformation first. Remember, business owners are mostly bothered by growth and profit, and everything else comes later.

Challenges and Focus Points

Any organization that decides to take up a newer way of conducting business will face hurdles. We will discuss digital transformation strategy later in this series.

Mindset

The first challenge an organization faces is restructuring organizational roles to encompass the business strategy the organization is using and the one that will be used during transformation.

Organizations must develop a mindset and approach to overcome this challenge. You need a dedicated Digital Transformation Team (DX Team) to induce a progressive mindset. The DX Team researches every aspect of the current business scenario and matches it with a related scenario post-transformation. This DX Team must create a list of focus areas for a strong strategy formulation.

The DX Team must educate the organizational staff about the change, so the changes are not surprising. We will call it the first layer (layer 1). We will discuss these layers in more detail in one of the future articles about strategy.

Business Process Handling

Another challenge organizations face is distributing their business processes according to a set hierarchy or priority. It depends on how optimized your current business processes are. It also depends on if you want to maintain the same set of policies after starting the transformation journey or do you want to add or remove some policies or streams under the current business process to induce a change.

The DX Team must also research the core technological practices they think can add to the overall value of the organization’s transformation. Different services involve the bulk sale and purchase of goods and raw materials. Supply chain management is one of these areas, and we will call it the second layer (Layer 2).

Funding and Costs

This is one of the biggest challenges and requires tremendous research on projected expenses. Any new change to the structure or functioning of an organization requires significant funding. There must a proper definition of expenses with allocation based on hierarchy and department priority.

Cost optimization is the third layer (Layer 3), and we will expand on it later. While cost optimization must be near perfect for the organization to sustain the added load of digital transformation, it also allows you to focus and shift resources with your current and ongoing practice to balance the equation.

Parallel Business Identity

Some organizations separate their current business practices from their digital side by starting a new venture that acts as a subsidiary of the current organization while adopting industry trends and practices to start the digital business transformation. This approach includes a phased migration of the business operations by sharing the operations load. Technologists can compare it to cloud bursting within a hybrid cloud environment.

This approach establishes a stable practice with similar business values as the core business while employing digital tools to conduct business and stabilizing it until it is ready to take over the entire practice of the parent organization. We will call this practice the fourth layer (Layer 4).

Continued in Part 3

In Part 3, we will introduce an organization that deals primarily in spices discuss its current business practices. The article will also discuss a proposed strategy and focus areas the organization can use to provide a seamless transformation journey. Then, we will elaborate on all the layers of digital transformation discussed above.

Upcoming Articles

  1. Seeding Digital Transformation in Southeast Asia – Part 3: An Introduction to Buttercup Spices
  2. Seeding Digital Transformation in Southeast Asia – Part 4: The Strategy
  3. Seeding Digital Transformation in Southeast Asia – Part 5: Application Migration
  4. Seeding Digital Transformation in Southeast Asia – Part 6: Resource Planning and Networking
  5. Seeding Digital Transformation in Southeast Asia – Part 7: Building a Smarter Supply Chain
  6. Seeding Digital Transformation in Southeast Asia – Part 8: Introducing AI for Better Workflow
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