Uncertainties of the year 2020 have brought to the surface the conflicting objectives between digital transformation and everyday business in Asia Pacific.

What are some key challenges organizations in Asia Pacific faced along their digital transformation journey in 2020? And how has the COVID-19 pandemic and other global events impacted digital transformation initiatives?

The uncertainties of 2020 certainly helped to surface some key conflicts between digitalization goals and everyday business objectives.

DigiconAsia finds out more about the conflicts of transformation – and how organizations can overcome these challenges – in an interview with Josep Garcia, VP and GM, Asian Growth and Emerging Markets (GEMs), Red Hat.

Josep Garcia, VP and GM
Asian Growth and Emerging Markets (GEMs), Red Hat.

What were some key challenges as Asia Pacific companies implemented their digital transformation initiatives in 2020? Have there been any particular issues that were common across organizations in the region?
Josep Garcia (JG): The global events of 2020 have led to many new business requirements, such as the rise of remote working and increased appetite for digital customer engagement. In response, many APAC organizations have heavily focused on ensuring that their IT infrastructure can support those changes to achieve business continuity. However, this means that they have less IT budget and time to spend on innovation, which is crucial for business growth in the future.

Additionally, APAC organizations are faced with an increasing pressure to innovate faster to keep up with evolving customer demands. Companies, like Singapore’s DBS Bank, have shown that success in the digital age requires the ability to bring experiments to production quickly and continuously introduce incremental change. This agile way of innovation calls for a culture of collaboration, which is not inherent to every organization and needs more than adopting new technologies. 

What are some transformation goals that are in conflict with everyday business objectives?
As mentioned earlier, it can be challenging for organizations to balance the need of keeping the lights on for business continuity and accelerate innovation efforts for growth. Often organizations struggle to do so, as they usually don’t have the right IT architecture in place, limiting their ability to build, run, and integrate new applications into their existing systems or new technology that’s coming out of the cloud.  Digital transformation has been on corporate agendas for some time now, but the recent consumer shifts are challenging the paradigms that slowed transformation in the past.

However, balancing these goals is not an impossible task, as exemplified by Standard Chartered Bank. The bank used Red Hat’s open source solutions to revamp its legacy channel applications (i.e., internet banking and mobile banking) into a microservices driven, cloud-native solution. The move enabled it to reduce its infrastructure cost, scale and support a several-fold increase in traffic, shorten time to deploy and go-to-market for applications, and greatly simplify the production rollout and recovery process.

How should organizations in APAC strive to overcome these ‘conflicts’ of transformation, especially in 2021?
JG: The approach organizational leaders take toward transformation will impact their success or failure. Laying the foundation for continual transformation is the key to success. They can do so by firstly modernizing their infrastructure. More than a third (39%) of APAC organizations said they were able to better control their costs for IT maintenance after transforming their IT infrastructure, according to a Harvard Business Review Analytic Services survey titled “Understanding APAC’s Success in Digital Transformation”. The less organizations spend on maintenance, the more financial resources they can devote to innovation.

Besides technology transformation, APAC organizations also need to embrace an open culture — one that encourages collaboration, inclusivity, adaptability, and transparency. They have to understand and accept that the best ideas don’t necessarily come from the top, so they should empower everyone in their organization to initiate and iterate change rapidly, if they want to accelerate innovation. 

Collaborative cultures, open and transparent processes, and industry-tested, open tools provide the agility and security needed to support transformation—today and tomorrow. This is why we’ve been helping many APAC organizations, including Australia’s Heritage Bank and Malaysia’s AmBank, transform their culture and IT architecture through Red Hat Open Innovation Labs. During the residency, customers will gain first-hand experience on how to use open source technologies, apply agile development methodologies, and adopt DevOps practices to solve legacy problems or address new challenges such as developing cloud-native applications. They will also get immediate and direct experience with the open principles and open culture that can help them solve business challenges and meet the demands of today’s market in an accelerated fashion.

Any words of advice for organizations that are about to begin or restart their transformation journeys?
JG: The good (and bad) thing about digital transformation is that there’s no single, simple solution. Changing how you work with technology tomorrow depends entirely on how you work with technology today.

Embracing digital is a long-term strategy, not a short-term tactic. It must involve lasting cultural and technological change in order to bring lasting organizational and business success. It doesn’t have to be revolutionary or disruptive; evolutionary, incremental, and iterative progress is still progress. Organizations should therefore focus on driving small, incremental changes. By rapidly prototyping and reiterating, organizations can continuously improve their solutions and keep up with the accelerating pace of business. This goes beyond adopting new technologies – it calls for a culture that allows employees to be part of agile teams that are empowered to innovate and deliver more value to the company.

Since embracing all those capabilities is no easy feat, organizations should turn to third parties like the Open Innovation Labs residency to get hands-on experience on building their digital muscle to gain business agility. The ultimate goal should be to get comfortable with change before the market demands it, because the market will demand it. Whether your business flies planes or sells newspapers, the threat of disruption looms.