In a sixth guest article written exclusively for just-auto, Dato Madani Sahari, the CEO of Malaysia Automotive, Robotics and IoT Institute (MARii), outlines how Malaysia is helping industry players to digitalise their entire business value chain for better results and performance. It's an opportunity that the COVID-19 pandemic has further opened up.
It is common that the concept of digitalisation is perceived by many in its present common visible manifestation.
My generation viewed digitalisation as the movement from analogue or mechanical functions towards electronic functions – digital watches, for example, showed the time directly in the form of digits instead of needing to understand how the big and small hands on the clock face told the time. Another example is the transfer of paper based documentation to its digital equivalent.
Semantically, the evolution above refers to the digitisation, where physical elements are converted into an electronic, or "digital" form.
Digitalisation, refers to a holistic and systemic transformation of a business's model and value proposition, where the business verticals evolve – from strategy formulation to operations –resulting in a shift of paradigm in which the business is technological at its core, and value is derived from the products services it can deliver through the technology it has developed.
This means that business intelligence and data on aspects such as customer relations, demographics, market segmentation, product and processes reliability become core decision making tools to deliver the best for its consumers. This also means that digitalisation can only happen when there is digitisation.
Amazon, for example, started to gain popularity as an online retail outlet for books, and today allows buyers to shop online for anything under the sun. However, while Amazon is generally identified by consumers as an online retail portal, the true value proposition of the company is in the digitalisation of the retail industry – driven by business intelligence and data of the millions of people who buy from them, allowing them to assist businesses towards better sales strategies to sell their products. In essence, the value does not only make buying easier, but also makes selling easier.
The digitalisation of Malaysia has been a long-term aspiration for quite some time now.
The digitalisation of Malaysia has been a long-term aspiration for quite some time now, with numerous government organisations tasked to lead its policy formulation and ecosystem development. As the nation's industries begin seeing a convergence with digitalisation at its core, new solutions and frameworks are now in high demand, which is now in hyper-acceleration due to health security needs from the COVID-19 outbreak.
MARii, an agency under Malaysia's Ministry of International Trade and Industry (MITI), has been developing numerous novel solutions to allow industry players to digitalise their entire business value chain in order to deliver better and more cost effective products and services based on intelligent manufacturing practices, driven by design thinking derived from sound decisions from accurate information – which is based on the myriad angles provided by big data management and analytics.
While this chain of data driven processes were developed for the automotive sector since 2015 from its days as the Malaysia Automotive Institute, the overall goal for MARii was to develop technologies that would spin off to other industries – as the same technology was founded on the same needs for all sectors, catalysed by the automotive sector which had the wide technology ecosystem to spur its development.
The COVID-19 outbreak has provided a window of opportunity for the nation's businesses to shift business paradigms towards the strategies that are data driven.
The rebranding exercise to MARii provided an avenue for more industries to embrace the technologies that have been utilised by the automotive sector to create the complex products and services we see today – and when it comes to a technology which exists as a binary element, it is much simpler to implement compared to the transfer of physical technology to other sectors.
The challenge for digitalisation, therefore, lies not in its ability to be expanded to less complex industries, but rather in the perception of digitalisation in terms of its usefulness.
As mentioned in numerous columns that have provided me opportunity to share my thoughts, the COVID-19 outbreak has provided a window of opportunity for the nation's businesses to shift business paradigms towards the strategies that are data driven, resulting in accurate business decisions – which is the true definition of digitalisation.
While the consumers' needs will forever be the same – the COVID-19 outbreak has created urgency, and education – for the consumer to indulge in online services to fulfil those needs. For businesses, the goal is not to only satisfy this need by providing an online option, but using digitalisation to better predict their needs through the data derived from the orders from customers.
This allows the business to better structure and schedule manpower, equipment and transportation needs. It also allows for better planning of materials, production and cashflow requirements through the use of trends analysis.
This understanding is the foundation of digitalisation, in which instead of becoming merely a sales portal, businesses now deploy an arsenal of applications to process and predict its entire business functions, digitally.
In this regard, MARii is taking the initiative to accelerate its entire arsenal of technology solutions, training and development programmes to allow businesses of every sector to access a value proposition of digitalisation. While the COVID-19 pandemic has opened opportunities and realisation among consumers, we must take heed to the fact that digitalisation is here to stay, and transform our business thinking in order to stay relevant in the long term future.
The writer is the chief executive officer of Malaysia Automotive, Robotics and IoT Institute (MARii).