Photo - Terrence Yong, Managing Director, SAP Malaysia.
Enterprise solutions provider SAP has declared plans to help local enterprises grow in tune with Malaysia's digital economy aspirations to achieve developed high-income nation status by the year 2020.
In an exclusive with Computerworld Malaysia, Terrence Yong, who recently returned to Malaysia to take up the role of SAP's new country managing director, said "SAP was betting big on Malaysia's digital economy aspirations."
Some industry observers have commented that Yong is probably the youngest professional to lead an international multinational company in Malaysia and that his business acumen and deep knowledge of the various industries together with his understanding of applying technology to increase productivity and operational efficiencies make him one of the industry's most refreshing thought leaders.
Yong said he has a personal mission of helping local enterprises compete more effectively. He also said his aspirations included leading "SAP Malaysia to the next stage of development and growth, particularly in the fulfilment of the Digital Malaysia vision".
"As we know, Digital Malaysia is a national agenda that draws from the huge opportunities created by the digital world to harness the country's ICT capabilities," he said. "It is built upon a vibrant domestic ICT industry, transformative use of digital solutions by government, businesses and citizens, as well as a robust enabling ecosystem,"
Yong elaborate that goals included are to increase the country's Gross National Income, enhance business productivity and improve the standards of living. In other words, the vision of Digital Malaysia is to enable the country's digital economy so that Malaysians can thrive within this new business environment.
Third wave of IT transformation
"At SAP, we unquestionably understand the direction of the digital economy," said Yong. "In a nutshell, the digital economy represents the third wave of IT transformation, and has the potential to be the biggest yet - triggering even more innovation, productivity gains and economic growth than the first two waves."
According to Yong, the first wave was introduced to the IT economy when the initial wave of IT transformation automated individual activities in the value chain, from order processing to manufacturing resource planning. "Productivity increased dramatically and we also saw the standardisation of processes across companies."
"The second wave represented the Internet economy to which unleashed the second wave of IT-driven transformation. Consumers have access to computers and computers are all connected, changing how we communicate and transact," he said.
"We now stand at the brink of the third IT transformation - the digital economy - after the rate of adoption of new technologies has accelerated over the past decade," said Yong. "We have 3 times the economic opportunity now through the digital economy than what we have seen over the last 20 years.
"By 2020, the total size of the digital economy is estimated to be US$90 trillion," he said. "And against today's borderless global economy, Malaysia and our enterprises have the opportunity to further leapfrog ahead over other countries if we are able to reimagine our business models and proactively evolve to stay relevant."
Digital Economy success
Yong said SAP's view is that the secret to succeeding in the digital economy "is speed in gaining the right insights at the right moment."
However, he also felt that organisations can only really master complexity and extract transformational value if these insights are connected to the core of their business. "Companies need to start by building a flexible digital core at the heart of their organisation which is why we are working daily with top customers in the world to simplify, innovate and digitize business."
Engaging the total workforce, including employees and contractors - changing work will drive a step change in productivity to ensure business sustainability, said Yong.
"At SAP, we understand this, which is why our customers represent 98 percent of the world's most valuable brands. We are the No. 1 business cloud, with more than 80 million users," he said. "Seventy-four (74) percent of the world's transactions touch our systems. With SAP S/4 HANA we reimagined and reinvented how business processes will work in real time with simplicity and higher value."
"We understand the power of integrating the world," said Yong. "Nearly US$1 trillion in commerce runs through our digital business networks. Our hybrid solution powered by HANA is the de facto standard re-inventing the customer experience and CRM space by seamlessly integrating services, marketing, commerce and sales."
Yong's comments on HANA also included:
· With advanced in-memory computing technology such as SAP S/4HANA, companies can finally free themselves from running the business in batch mode and building complex procedures to get around the limitations of legacy technologies.
· S/4HANA is SAP's new generation of ERP solution running in real-time, integrating predictive, big data and mobile.
· The digital core allows companies to run simple and enables the digital value chain.
According to Yong, knowledge of that alone is often insufficient. He mentioned that because of this, SAP also helps empower customers to execute on their digital strategy by using a 5-pillar strategy, namely:
· Outcome-based customer experience across all channels
· Re-platform core business processes and bring together transactions and analytics in real time to be smarter, faster and simpler
· Workforce engagement including employee and contractors
· Supplier collaboration to accelerate growth innovation
· Assets and Internet of Things to drive real-time insights and new business models
Disruptive technology today
"Disruptive technology is changing the landscape of businesses around the world today," said Yong. "Thus far, early adopters are winning - and inevitably will continue to do so."
"In the digital economy, we are already seeing innovators leveraging hyper connectivity to deliver new products and services that provide greater flexibility, service and value to both consumers and businesses," he said.
"When we look around us, we see companies like Uber," Yong said. "Now Uber is the world's largest taxi company yet it doesn't own any taxis! We are aware of the ongoing debate surrounding Uber in Malaysia, and while I am not endorsing or criticizing Uber, I'd like to highlight that they are driving disruption in public transportation. Airbnb is another good example of a company that is causing disruption in the industry without actually owning any assets."
"These early adopters are shaking up the marketplace because the rules are different in the digital economy - it levels the playing field and is relevant to businesses of every size, industry and region in this new digital economy," he said.
"Digital disruption is not only here to stay, it is also threatening every business model in every industry. Research shows that companies that have embraced the digital world and executed on their digital strategy are seeing real shareholder and stakeholder value," added Yong.
In dealing with recent government policies with regards to the digital economy, Yong said that the recent Budget 2016 was centred on the enrichment of the Nation and the citizens - in other words, the People Economy, which is critical in fuelling growth to Malaysia's digital economy.
According to Yong, this year, SAP was glad to hear about education-focused initiatives that will cultivate digital literacy among the future generation.
"The Digital Tech@Schools programme to teach Computing skills in school curriculum nationwide is potentially a game-changer in the country's education system. This programme will nurture and enable tomorrow's digital leaders with advanced digital literacy skills, computational thinking and cognitive skills, which are fast becoming pre-requisites for higher paying jobs. I am glad that the agenda is now mainstream," he said.
"SAP Malaysia is also helping develop human capital for Malaysia," said Yong. "A crucial factor affecting how businesses are run now is the fact that this future generation - millennials - are entering the workforce. Companies need to treat millennials just like any other employee, but must recognise that they are different from previous work generations."
"SAP under the MyUniAlliance programme spearheaded by MDeC has to date trained 5,000 millennials in Malaysia and is expected to increase to 3,000 per year from 2014," he said. "Nineteen (19) Institutes of Higher Learning [IHL], including two foreign universities, have benefitted from the programme. These IHLs bring SAP's technology and best practices to students in undergraduate and graduate programmes."
"The other initiative that caught our eye is Malaysian Communications and Multimedia Commission (MCMC) allocating RM1.2 billion to improve the country's telecommunications infrastructure," said Yong. He noted that these include "rural broadband projects which will see a four-fold increase in Internet speed from 5Mbps (megabits per second) to 20Mbps; a National Fibre Backbone Infrastructure; High-Speed Broadband; and undersea cable systems. "This initiative is certainly in the right direction as there is a correlation that the more advanced a country's broadband capabilities are, the greater it will prosper as a country," said Yong.
In closing, Yong reminded us that SAP is the largest business cloud company and has the most innovative digital platform in SAP HANA. They also offer the most comprehensive services and relevant solutions across 25 industries and have the most global ecosystem in the world. "Most companies don't know what they need in the digital world but they do need to bet on the best platform and partner and that would be SAP."
"With the combination of what we've achieved in the last 5 years, we are ready to enable digital business and to provide unprecedented innovations required in this digital economy," he said.
"Through years of organic innovation and more than US$30 billion in strategic acquisitions, SAP has transformed and, today, we have the best solution portfolio and expertise required to enable the digital business strategy of our customers. This is why SAP is running 74 percent of the world's transactions and more than 295,000 companies are using SAP around the world - and this cuts across 25 industries and 12 Lines of Business," said Yong.
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