KPMG's "Transforming the Enterprise of the Future" report reveals that 76% of senior leaders believe that generative AI, neural networks, and digital twins will significantly enhance the likelihood of transformational success. This highlights the importance of advanced technologies in driving transformation.
However, despite rapid technological advances, only 29% of senior leaders consider their technology foundation readiness very high. Research finds that a lack of resources, skills, or expertise, stakeholder resistance to change, stakeholder and employee resistance, competing business goals, and a lack of funds or an unclear business case limit digital transformation within organisations.
Uniqueness of digital transformation in ASEAN
In South East Asia, unique characteristics drive digital transformation. Lyon Poh, partner, Technology Consulting, KPMG in Singapore, lists down some characteristics unique to ASEAN, including the rise of digital consumers that fuel growth in e-commerce, digital payments, and mobile penetration, citing data from KPMG's Powering Asia's Innovation Economy that around 60 million individuals joined this group in Southeast Asia since the start of the pandemic.
Poh also explained that "ASEAN benefits from strong government support in prioritising digital infrastructure and connectivity development."
According to KPMG, fast-growing emerging countries such as Cambodia, Lao PDR, Myanmar, and Vietnam (CLMV) are most attractive for foreign direct investments due to the ASEAN community's roadmap to 'Empower ASEAN 4.0', prioritising development in digital infrastructure and digital connectivity. Further, their high growth potential, resilience, diverse opportunities in different sectors for small and large businesses, open trade policy, and geographical location have magnetised investors to the region.
Poh also mentioned the deep focus on fintech development across ASEAN, such as blockchain, cryptocurrency startups by payments businesses and wealth techs, embedded finance, digital and open banking, and digital wealth management.
"Lastly, the region places a strong emphasis on digital resiliency through cybersecurity measures. These safeguards protect digital assets, mitigate cyber threats, and ensure regulatory compliance, thereby supporting digital innovation while maintaining consumer protection and data privacy," said Poh.
Localising digital transformation initiatives
In localising digital transformation initiatives, Poh said that ASEAN organisations try to balance alignment with group directions and remain sensitive to local cultures, practices, and regulations.
"While regional organisations are catching up with global peers in maturing and scaling their digital transformation initiatives, they need to be sensitive to regional idiosyncrasies," Poh said.
He added that finding the balance involves adapting to local needs through culturally relevant user interfaces and integrating user preferences and behaviours into digital solutions.
He reminded, "Ensuring compliance with country-specific regulations while also adhering to regional collaboration and agreements, such as the ASEAN Framework Agreement on Digital Data Governance, is crucial."
Poh also notices a pattern in which ASEAN organisations focus on developing resilient and sustainable digital infrastructure to protect against ESG risks.
"Financial institutions are partnering with ESG solutions and data providers to monitor their asset portfolios' performance against their committed ESG goals and ensure that climate disclosures are aligned with the International Sustainability Standards Board's (ISSB) standards," Poh explained.
Lastly, he said organisations foster regional tech talent by developing skills and capabilities through uniquely designed training programmes and upholding a culture of innovation and entrepreneurship.
Technology-led transformations
Poh is aware that technology-led transformations are expensive and do not guarantee success, especially since they are usually done for the long term and must adapt to evolving market forces. Even so, Poh believes in the power of leadership to spark transformations.
"Technology can improve efficiencies, help enterprises create new revenue streams, reveal competitive insights, and unlock innovation. However, it is leadership rather than technology that will define the outperformers in the years ahead - no app or platform can deliver long-term value without vision, inspiration, and motivation," Poh said, citing a KPMG report on the top recommendations to improve the success rate of technology-led transformation.
He said it starts by "establishing a culture of trust, shared values, and alignment to the strategic vision." A KPMG report revealed that 73% of digitally mature enterprises have high levels of trust in their leaders.
Poh also reminds organisations to set robust tech and data foundations with collaboration, innovation, customer satisfaction, financial performance, and agility as foundations and sequence and manage initiatives "to maximise its value and minimise disruption across the enterprise while maintaining an enterprise-level view of the change, aligning on programmatic governance, and continuously tracking the value of the transformation."
Transformation: a journey of continuous reinvention
Transformation is not a one-time, short-term event. KPMG asserts that organisations that can unlock capacity and value are those that excel in four key areas: resilience, digital maturity, partner ecosystem alignment or investment in partnerships, and orchestration capabilities.