The digital transformation imperatives for 2017

Digital disruption continues apace around the world, forcing enterprises to change the way they do business and interact with customers.

Source: CenturyLink. Tan.

"Enterprises are moving from the awareness stage to the adoption stage when it comes to digital transformation. They are embarking on their IT transformation journey and starting to adopt and adapt to digital disruption," said Tan Kit Yong, Regional Director, Southeast Asia, CenturyLink.

According to CenturyLink’s Asia Pacific Hybrid IT Readiness Report 2016, 63% of respondents see the strategic role of IT as achieving growth momentum, while 50% see it having a strategic role for digitally transforming the organisation, Tan said. Organisations are also looking for a managed service provider with the right credentials who provides secure services that meet key performance indicators (KPIs) when it comes to pricing, performance, availability and service delivery, he added. 

Source: Software AG. Schulz.

“In the coming year, the relevance of digital disruption in the region is only going to increase as more digital startups and private equity firms will set their footholds in Singapore and other key markets in the region such as China and Indonesia,” said Anneliese Schulz, VP of Asia, Software AG. 

“Asian businesses, particularly in Southeast Asia, will face challenges due to evolving e-commerce and digitisation. Companies will struggle in terms of finding the right resources, and training and developing staff as per the changing business landscape.” 

TechTrade Asia asked vendors what 2017 might bring for digital transformation at the industry, enterprise and consumer levels. While not every letter of the alphabet may be represented, here's what they said in alphabetical order:

A is for agility

Source: CA Technologies. Miles.

Agility will be key, says Stephen Miles, CTO, Asia Pacific and Japan, CA Technologies. “Against a backdrop of constant economic disruption, creating a business model that is built to last is out of step with the new digital reality. A key factor for enterprises to succeed in today’s application economy is to stay agile or 'built to change' – able to sense, react and adapt to shifting market dynamics.

"Software should now be the core component of a business’ DNA, as it has increasingly become the main point of interaction with customers regardless of which industry they are in. Those who embrace this new paradigm will be able to accept and act on better ideas that can drive rapid, continuous improvement in customer experience. Software lies at the core of business agility, and companies should pay equal attention to key areas like agile, DevOps, and security, to deliver value to customers,” he said.

B is for Blockchain

Source: Solarwinds. Adato.

At a time when companies are finding it difficult to deal with data management and security, Blockchain provides a solution, Leon Adato, Head Geek and Technical Evangelist at SolarWinds noted. ”Supply chain use cases, for example, are now being tested and implemented to ensure the safety, security, and integrity of the information associated with these processes. In 2016, a multitude of companies – banks in particular – began to test Blockchain in lab environments, yet few are using it in practice. One of the roadblocks is agreeing on a common protocol, which has yet to take place. The other roadblock, of course, stems from a lack of proven security practices, especially for financial organisations,” said Adato.

“We predict that in 2017, Blockchain will gain steam as a buzzword and much more research will go into the technology and its functionality, although it’s unlikely there will be any effective new capabilities able to be readily implemented. However, 2018 will prove to be much more action-packed in terms of companies figuring out how to take advantage of data ledger technology to solve their data management issues.”

C is for customer - and channel

Source: Avaya. Spence.

Richard Spence, MD, ASEAN, Avaya, said that digital transformation begins and ends with the customer. “In today’s digital era, customers today use multiple channels to connect and engage with businesses. With the widespread penetration of smart devices, customers have true mobility and businesses must cater to their expectations of omnichannel, anytime and anywhere connection,” he explained.

“The modernisation process must start with where the customer interacts most – the customer experience centre. This goes back to the basics of business success...User experience is king and in 2017, customer experience will become the new battleground for organisations. It is crucial that businesses fast-track their digitisation process to meet with the growing digital needs of their customers and stay ahead of the competition.”

Source: Riverbed Technology.
Engelhardt.

Riverbed Technology's Bjorn Engelhardt, Senior VP for Asia Pacific & Japan, agrees. “Companies will continue to struggle with digital transformation, but it is important to keep the end goal in mind – why, or who, are we transforming for? After transformation, what value are we bringing to our customers? Only with proper planning will we be able to reap the benefits of digital transformation to provide new and innovative services to our customers,” says Engelhardt.

D is for digitisation or digitalisation

Source: Hitachi Data Systems.  Skingsley.

“(This) year’s trends are being driven by a clear enterprise demand to deliver on all the promises of digital transformation, with the Asia Pacific region set to lead the way. Regardless of industry, IT is seeing a fundamental shift as enterprises embrace the new revenue streams, efficiencies and possibilities provided by digitisation,” said Russell Skingsley, CTO, Hitachi Data Systems Asia Pacific, listing the development and deployment of applications and services with fewer defects and less wasted effort as one benefit. “It’s really about putting the power of innovation into the hands of those with the best ideas.” 

Schulz of Software AG echoed Skingsley's observations, nothing that 2016 has seen the adoption of digitalisation all across Asia. “In developed economies, such as Singapore, Hong Kong and South Korea, digitalisation has observed a higher demand primarily driven by the opportunity to save costs in the current volatile economic situation and the need to stay competitive in this era of digital disruption. Enterprises in Asia are starting to see the return on investment (ROI) from their investments made in upgrading their digital infrastructures as they can now leverage these upgraded digital infrastructures to accelerate digital transformation within their organisations,” she said.

“In 2017, we will see Asian countries making further investments into digitalisation that will result in completely new business models further disrupting the industry. Through digitalisation, capabilities in the areas of real-time analytics and Internet of Things (IoT) will gain more relevance as it will not only help businesses increase efficiencies and revenues, but will also help to define the roadmap to success for the future.”

“Industries such as financial services (FSI), telecommunications and retail have led the way of digitalisation in the region in 2016. With the coming year, we will also see manufacturing and healthcare organisations investing heavily in digitally enhanced infrastructures to drive business transformations,” Schulz added.

E is for enterprise-grade mobile devices

Source: Zebra Technologies.
Goh.

More consumer-grade devices are embedded into business operations every day – including smartphones, tablets and laptops – spurred on by bring your own device initiatives, observes Ryan Goh, VP of Sales and GM, Zebra Technologies Asia Pacific. "While portable, flexible, and seemingly cost-effective, these devices do not possess the technological capabilities, features or durability required to achieve the high levels of performance required in today’s enterprise settings," he explained.

"In 2017, enterprises will continue to look for new ways to enhance and expand the functionalities of their devices to try to achieve the level of performance on par with that of enterprise devices. We foresee the continued rise in demand for single enterprise-grade mobile devices that incorporate a plethora of functions and services – including the ability to scan barcodes, measure objects using mobile dimensioning technologies, connect to the Internet or intranet, make voice calls, and more."

On the subject of mobility Michael Björn, Head of Research, Ericsson ConsumerLab, noted that consumers also want the future to remain fully mobile, implying that demand for battery-friendly, instant and fast connectivity is set to grow rapidly. "In that sense, reality time means it is time for 5G networks," he said.

F is for five big brands

It seems simplicity is what consumers yearn for, with implications for the industry. More than two out of five advanced Internet users would like to get all their products from the biggest five IT companies, according to the Ericsson ConsumerLab's annual trend report* The 10 Hot Consumer Trends for 2017 and beyond. Of those, three in four believe this will happen only five years from now.

H is for human resources

Digital transformation has to be supported by skilled talent, driving growth in outsourcing to meet demand, Tan of CenturyLink said. "According to CenturyLink’s Asia Pacific Hybrid IT Readiness Report 2016, 58% of organisations in Asia Pacific cited lack of skilled manpower as a reason to outsource, alongside cost reductions (62%) and new technologies deployment (59%)," said Tan. "Keeping existing talent and finding people with the right skills exposes the human side of digital transformation."

I is for information

The success of a business will continue to become more dependent on the quality of exchanged information and how up-to-date it is, says information logistics expert Retarus. "Existing manual processes are often prone to error and tend to be time intensive. To optimise operating processes, communication processes have to be bundled, consolidated and digitised at a reasonable cost. The data should also be transmitted directly to the devices or applications which need the information and have the ability to process it further," the company said in a statement.

"Only dependable, secure and customised business communication facilitates close customer relations and customer retention, helping companies to gain a significant competitive advantage on markets which are saturated and highly competitive. Thanks to reliable provision of services, automated process communications and integration, as well as transparent reports, enterprises can now use innovative communication services to carry out transactions more efficiently and ensure faster interaction with customers."

M is for machine learning (ML), including artificial intelligence (AI), deep learning and other forms of cognitive computing

There is increasing acceptance of AI in our lives. The Ericsson ConsumerLab research states that 35% of advanced Internet users want an AI advisor at work, and one in four would like an AI as their manager. At the same time, almost half are concerned that AI robots will soon make a lot of people lose their jobs.

"AI capabilities are moving fast and chat engines will not only answer requests, but will engage conversation in a language of choice, withstanding the Turing test** for a minute or longer. Banks, retailers and other industries will use this to facilitate omnichannel (communications) as AI chatbot engines become part of interaction in every channel, driving and enhancing the customer experience. Support organisations will embrace chatbots to solve simple service requests in a cost-effective way," said Schulz of Software AG.

Adam Judd, VP for Asia Pacific Japan at Brocade says ML algorithms "stormed onto the mainstream stage" in 2016. "ML algorithms can now be trained on all sorts of data, thanks to the availability of high-powered processors, 'big data' collection architectures, and open source software implementations," he noted.

"We will continue to see ML expand in importance as a fundamental technology driving innovation in every industry. In the context of network technology, ML techniques will be applied to problems that were previously thought to be impractical to solve. The tech talent crunch that we saw in 2016 will get even worse in 2017 as demand rises for the most talented ML scientists and engineers."

N is for networking

Source: Brocade. Judd.

Networks will be the source of power and value creation in the era of digital transformation, adds Judd from Brocade. "We are entering the Network Age where everything is going to be interconnected. As we move to digitise everything from retail to cities, networks are at the centre of new and disruptive business models. They are at the heart of competitive advantage and the source of transformation sweeping through every industry, changing the way we live and do business," he stated.

"By 2016, the Internet was already a ubiquitous part of life for most of us. In 2017, we can expect to see continued disaggregation of hardware and software leading to more cost-effective networks, at increased capacity, to offer more flexible service models across an expanding footprint. We will see advances in wireless network technology, and a subtle shift in security postures of enterprise endpoints. Users will be more connected, more often, to the networked resources they need to be most effective."

According to Judd, software-defined networking (SDN) and network functions virtualisation (NFV), which garnered much interest in 2016, are "nearing the level of maturity needed to find real solutions" this year. "In 2017 we can expect to see complete software-defined network infrastructure solutions that are commercially available, multivendor, based on a viable ecosystem of SDN and NFV components. Proprietary platforms will begin to feel uncomfortably closed as users realise the extent of their lock-in," he predicts. 

"Adoption will rise, beyond the early adopter service providers, as enterprises and private data centres begin to see a manageable path to achieve the value of a flexible infrastructure."

On the wireless front Judd sees more integration of local Wi-Fi and mobile data networks. "Devices will roam seamlessly between different network technologies, and those technologies will be deployed by a surprising diversity of network operators. Moreover, devices will begin to use multiple networks simultaneously, shifting data traffic seamlessly as network connectivity changes due to capacity, resource connectivity, and mobility," he said.

"In parallel, a new generation of wireless networks will begin to adapt to user demand by shifting capacity to where it is needed. The new status quo for wireless connectivity, which will begin to emerge in 2017, will be a nearly-invisible unification of different wireless networks behind the scenes of an always-on, high-capacity wireless user experience."

O is for open source

Damien Wong, VP and GM, ASEAN, Red Hat, describes open source as "a way of innovating and collaborating to create groundbreaking ideas". "Today’s most innovative technologies, from the Internet of Things (IoT) to machine learning, are all being driven by open source. All across Asia Pacific, we’re seeing exceptionally strong growth in the open source movement, as the open source ecosystem increasingly plays a key role in offering customers broader choice," he said.

Open source technology has helped Singapore's Nanyang Technological University (NTU) seamlessly integrate its private and public clouds. "This new hybrid cloud architecture allows NTU to enjoy more flexible computing, while offering substantial performance improvements, as well as time and cost savings. Users can now quickly access resources on demand, as opposed to manual provisioning – what used to take at least a day to complete can now be achieved in just 30 minutes," Wong said.

For 2017 Red Hat predicts that many CIOs will develop a holistic digital strategy that leverages open source for innovation, as opposed to focusing on using open source for cost-cutting. "This would incorporate a broader and more forward-thinking strategy of remodelling the entire business to become more agile and innovative, rather than just updating IT infrastructure. To this end, open source technologies thus present an ideal approach in terms of flexibility, a reinvention of processes, faster innovation through ecosystem collaboration, and scalability," Wong said.

S is for smart vehicles

They come under many names today - self driving cars, connected cars, autonomous vehicles, driverless vehicles, intelligent vehicles, referring to cars that are networked and can interact with their drivers in more versatile ways, right down to vehicles which can drive themselves. The industry has been simmering for a while, and is coming to a boil in 2017. Ericsson Consumer Lab research, for instance, states that one in four pedestrians would feel safer crossing a street if all cars were autonomous, and 65% of them would prefer to have an autonomous car.

Brocade's Judd has predictions for networked cars as well. "Opportunities to improve vehicle maintenance and driver convenience are already being explored by car makers, but the real opportunities are only just beginning to become apparent," he said.

"In (2017) users will begin to realise the promise of being able to connect their cars and homes, to share telemetry and driving conditions with nearby vehicles, and integrate more fully with the driver’s IT experience – safely integrating personal calendars, messaging apps and more into the driving experience."

Source: Ixia. Bhat.

U is for (more) 'Uberisation'

Naveen Bhat, MD, Ixia, Asia Pacific, expects 2017 to be a year where technology will continue to replace physical, manual and, increasingly, intellectual processes. Just as Uber disrupted the taxi industry, new companies and technologies will offer new choices to customers, Bhat said.

"Disruption will continue to take place in more and more verticals – beyond transport (Uber, Grab etc), housing (Airbnb) and food & beverage (UberEATS, Foodpanda, Deliveroo etc) – we will see more changes especially in the technology scene," he said.

"Virtual reality (VR) and artificial intelligence (AI) are some existing examples of how ‘traditional’ technologies have been displaced or regarded as laggards with VR and AI jumping on board the disruptive technologies bandwagon. We will see more verticals face or be affected by the Uberisation of Things and when this happens, technology will either save or break the economy."

V is for virtual reality (VR) and its cousin augmented reality (AR)

Brocade's Judd identified 2016 as the breakout year for consumer VR, noting that headsets were available for video game systems just in time for the 2016 holiday season, while several popular smartphone brands now have VR functionality.

"In 2017, we can expect to see VR and AR systems focused primarily on entertainment and education. But as the platforms become more established, toward mid- to late 2017, we can expect to see experimental applications in communications, data visualisation, and enterprise situational awareness," he said.

Björn of the Ericsson ConsumerLab said: "Beyond real time, I believe we should be talking about reality time. In fact, what we call reality becomes ever more personal and subjective. Consumers not only surround themselves with the like-minded on social networks, but also are also starting to customise the way they experience the world with augmented and virtual reality technologies."

Almost four out of five VR users believe VR will be indistinguishable from reality in only three years. Half of respondents are already interested in gloves or shoes that allow them to interact with virtual objects, said the Ericsson ConsumerLab. Another finding is that over half of people would like to use AR glasses to illuminate dark surroundings and highlight dangers. More than one in three would also like to edit out disturbing elements around them.

On the down side, one in three also want motion sickness pills for use with VR and AR technology - a request three in 10 also made if they are passengers in autonomous cars.

Interested?

Read the TechTrade Asia blog posts on:

Telenor Group's Asian entrepreneur survey, with tech predictions for 2017

Software AG's forecast for retail in 2017

2017 predictions for IoT, and the year's outlook for analytics

NVIDIA's push for self-driving vehicles

View Ericsson ConsumerLab's infographic illustrating the top 10 consumer trends for 2017 (PDF)

*The insights in the 10 Hot Consumer Trends for 2017 report are based on Ericsson ConsumerLab's global research activities over more than 20 years, as well as data points from an online survey of advanced internet users in 14 major cities across the world, performed in October 2016. Although the study only represents 27 million citizens, Ericsson ConsumerLab their early adopter profile makes them important to understand when exploring future trends.

**In the Turing Test, a human conducts a conversation with either a human or an artificial intelligence. The artificial intelligence is deemed to have passed the test if the human tester is unable to distinguish it from a human.