Face to Face - ChinaSourcing [English]

MOFCOM Public Information Service

Home > Research > Face to Face

APAC enterprises to face major digital transformation in 2016: HDS CTO

MIS-ASIA | 2015-12-09

Enterprises in the Asia Pacific region will experience a major digital transformation in 2016 as they strive to improve key tech and non-tech functions, according to the Business and Technology Predictions for Asia Pacific in 2016 released by Hitachi Data Systems Corporation (HDS) on December 2, 2015.

According to Adrian De Luca, chief technology officer of Hitachi Data Systems Asia Pacific, "Digital transformation is fast becoming an organisational issue. It is no longer just CIOs who are championing the need for digital change, but leaders across all business functions. For example, CMOs are finding that traditional ways of marketing are not as effective any more, while CFOs are discovering that consumer and supplier transaction models have shifted. There is now an almost universal understanding within businesses that all functions need to look at how they transform their own practices through digitisation."

De Luca also cited five key trends that will continuously shape the IT and business landscapes in Asia Pacific next year.

Firstly, traditional enterprises will transform into digital natives. According to a report from Gartner CIO Agenda Insights, the confidence levels among CIOs that they will see more of their revenues flowing through digital channels have increased from 16 percent last year to 37 percent this year. This proves that digital initiatives are not just coming from the CIO but from all functions of the businesses, De Luca said.

Secondly, partnership between the government and companies will turn smart cities into reality.  According to De Luca, integration of their intellectual property and assembly of ecosystems of technology providers can create the needed solutions to build smart cities. Business opportunities in the sector are huge, with the annual smart city investment in technology alone set to quadruple to US$11.3 billion by 2023, according to Navigant Research.

Another key trend is that cross-modal IT will help unify business silos. The two modes followed by IT organisations to meet the needs of digital enterprise include applications that handle traditional systems of record; and systems of insight such as big data analytics. De Luca said that the need to fuse these two modes will intensify as the organisations strive to optimise the cost of running their systems, as well as incorporating their systems of insight into new business processes and customer interactions.

Fourthly, multicloud will enable transregional business. The emerging Trans-Pacific Partnership (TPP), which promotes free trade among involving nations, will affect the investment in technology infrastructure in the Asia Pacific region.

De Luca explained, "This opening up of the market will have an impact on how businesses consume cloud and expand the options that they have today. With as many as 70% of organisations either using or evaluating hybrid clouds nowadays, as well as provisions in the TPP to protect offshore data and avoid electronic duties, creating a multicloud across continental borders to allow businesses to expand becomes viable."

Lastly, bridging the IT talent gap will be more challenging to the companies. Appealing to the interests of the best young talent while investing in increasing the productivity of existing employees will be critical to bridging the gap in the long run.

"The working practices of 'Gen Z' workers are vastly different from those before them. With this generation expected to work an average of 17 jobs in their lifetime, they will develop a broader variety of skills as well as be exposed to multiple industries during their careers. Companies will need to figure out how to tap into this. They are driven more by their contribution to society than the logo of the company they work for," said De Luca.

Governments have also recognized this generational shift through changing the labour market, introducing new tax incentives and passing laws to allow easier investment.  To further develop talents, governments have also focused on continual learning. Singapore, for instance, is investing S$1.2 billion (US$0.9 billion) in technology development to improve its public sector.

Author: Adrian M. Reodique   Editor: ChengYF