Digital Transformation Leadership Blackbox (DTLBB) – Malaysian Context

DIGITAL TRANSFORMATION LEADERSHIP BLACK BOX (DTLBB) – MALAYSIAN CONTEXT GO DIGITAL – THE NEW NORM

From just another business buzzword, today, the force of digital is affecting almost every industry. Pierre Nanterme, CEO of Accenture highlighted in World Economic Forum (2016), digital is the main reason just over half of the companies on the Fortune 500 have disappeared since the year 2000. Current businesses are characterised by rapid, dynamic evolvement, powered by technological advancements like the IoT, virtual human-machine interfaces, and AI (Dixon et al., 2020). Businesses today, are at crossroads; whereby, in order to survive, or thrive, they are facing restructuring and transformational decisions; in view of rapidly advancing technology. Digital Transformation (DT) refers to a business’ assimilation of information, infrastructure, practices, and individuals; with digital facets- to become more effective and efficient with fast turnaround targeted impact. This multi-staged process is also about organisations providing enhanced values to stakeholders via digital portfolios (Rossi, 2015).

The cases of LEGO and Starbucks present an excellent example of digital transformation. LEGO moved up the value chain post restructuring and digital transformation with a new revenue channel from movies, mobile games, and mobile applications. Starbucks focused on building a digitalised customer experience by focusing on their loyalty. Mobile Order and Pay App became their primary digital transformation agenda by providing a convenient and easy buying experience (Petersen, 2016). In essence, companies such as LEGO and Starbucks experienced new business value exchange and competitive advantage (IDG, 2018) facilitated by digital transformation.

From a Malaysian perspective, the Dell Digital Transformation Index (2018) reported that nearly 55% of Malaysian businesses lack adequate resources to effect digital transformation. In addition, 48% were worried that they would lag behind in the transformation process; with 27% indicating that they were not prepared at all to initiate the transformation process. Marketing interactive also reported in the same report that, 3% of the respondents agreed to have embedded digitalisation fully in their business. Such businesses were the only ones to have successfully undergone any kind of transformation lifecycle.

Amidst this background setting, DT in Malaysia is supported by the government through the Shared Prosperity Vision 2030, which postulated the digital economy’s role in driving economic growth as indicated by MEA (2019). The launch of the Malaysia Digital Economic Blueprint, or MyDigital, on 19 February 2021 provides a road map to the digital economy’s role in pushing forward its economic recovery. By 2025, Malaysia expects the digital economy to contribute 22.6% to its GDP by creating 500,000 new jobs,

(Left) Professor Ir. Ts. Dr. Vinesh Thiruchelvam (dr.vinesh@staffemail.apu.edu.my), Deputy Vice Chancellor & Chief Innovation Officer, Asia Pacific University of Technology & Innovation (APU). (Right) Dr. Murugappan (muru@mcmc.gov.my) Head, Human Capital Division, Malaysian Communication yjk,./1Multimedia Commission (MCMC).

Internet access for every household, and complete access to an online learning environment. Malaysia is also keen to invest around RM70 billion for the national digitalization agenda, which is expected to foster e-commerce adoption by 1.2 million micro, small, and medium-sized enterprises in the next 5 years. The MyDigital agenda aims to integrate with the global value chain through a sustainable digital ecosystem that facilitates high-value jobs, innovative and productive firms, and narrowing the digital divide phenomenon. This is yet another milestone in Malaysia’s digital transformation evolution.

With the above focus, the government launched the “Jalinan Digital Negara” (JENDELA) focusing on optimizing the existing digital infrastructure and enhancing the connectivity for the entire nation. Further to this, initiatives like “Program Pemerkasaan Pendigitalan Usahawan Kecil” (Pupuk) is seen to be catalyst to spur the growth of local micro entrepreneurs by leaps and bounds spearheaded by Kementerian Komunikasi Multimedia Malaysia (KKMM), through the support of various government agencies, led by MCMC in-cooperation of MDEC, SME Corp, INSKEN, HRD Corp, BSN and private entities like Shopee, AEON, Telekom Malaysia, among others, working together to provide training programmes and conduct on-boarding sessions to assist micro entrepreneurs, specifically to spur the growth of digital economy. The efforts to further strengthen the digital economy is also driven by MDEC and SME Corp led by MITI and MEDAC through various other initiatives that focuses on the developmental scope for SMEs as well. All these efforts are inclusive of the digital matching grants by BSN, values up to totaling RM 300 million worth of allocation provided by the government. Further to this, towards the aspiration of Pupuk, Pusat Internet Komuniti (PIK) is being transformed as Pusat Ekonomi Digital Keluarga Malaysia (PEDi) with five (5) key transformational initiatives. The branding and objective of the PEDi focuses on digital economy with each PEDi having “IKON USAHAWAN” to empower and motivate local entrepreneurs, “PANEL PENASIHAT” consisting local leaders to support PEDi in planning and implementing socio economic programmes at PEDi for the benefit of local community. Six hundred (600) Rakan Digital PEDi will be engaged to nurture local entrepreneurs as well as drive implementation of PUPUK at the PEDi sites. In short PEDi has been activated as one of the touch points to reach out to micro entrepreneurs, digitalisation adoption of businesses towards participating in the digital economy.

In addition, the exponential growth of e-commerce proves that the industry is one of the key drivers of growing Malaysia’s digital economy. Thus, “Pelan Accelerator Kurier Negara” (PAKEJ) is another government initiative to support the three times growth of the e-commerce industry from seven (7) parcels per capita to twenty one (21) parcels per capita by 2025. PAKEJ will complement the ecosystem for digital economy by establishing the complete network for last mile delivery for e-commerce logistics support. Thus, having infrastructure mapped out, developmental scope of digital economy strengthened and finally the last mile delivery completed, it is well mapped out vision in driving digital economy to Shared Prosperity for all Malaysians.

The inclusion of technology and connectivity is an indication of the awareness at a national level of the increasing importance of the digital economy as a major influence in shaping society. With such potential, emphasis is being placed on growing the required digital talent to realise the economic benefits of these projections as well as grow the leadership to ensure the success of both private and public digital transformation endeavours.

Authors

Professor Ir. Ts. Dr. Vinesh Thiruchelvam (dr.vinesh@ staffemail.apu.edu.my), Deputy Vice Chancellor & Chief Innovation Officer Asia Pacific University of Technology & Innovation (APU)

Dr. Murugappan (muru@mcmc.gov.my) Head, Human Capital Division Malaysian Communication Multimedia Commission (MCMC)