How to Drive More Productivity, Reduce Cost to Benefit from Digitized Business Process in Business Operation?

by | Oct 7, 2019 | Uncategorized | 0 comments

Digital transformation continues to be one of the most debated topics among the SME and individual alike in Malaysia Central, North, South East Coast, Sabah, Sarawak. In Malaysia, government has made tremendous effort to grow economic, improve productivity, increase employment opportunity and accelerate innovation. SMEs in Malaysia represent 98.5% of total business establishments, contributing to 37.1% of the Malaysia Gross Domestic Product (GDP) and 66.0% of total employment in 2017.

 

Digitization of Business Process & Operation

With much nation initiative on the awareness of technology, government gearing towards Industry 4.0, many enterprise and SME still ponder the potential of digital transformation and how it drives more productivity, reduce cost and benefit from digitization of business process and operation. As Transformation is a continuous process, SME have gone thru beyond the computerisation era; an adoption and usage of digital devices that are more geared towards individual usage and limited business application, while digitization is defined as business process transformation including new business model, performance optimization, customer engagement management, virtual office operation, social platform, support services and feedback loop thru business app riding on the resources mobility and various IT hardware. Let us examine the benefit of digitization and how it can align SME to achieve highest productivity and build outstanding niche product & services. 

To be truly digitalised, SMEs must re-engineer and refresh their businesses by assessing and ensuring that their business strategies, business models, processes, and infrastructures are aligned and fully integrated to support their digital transformation”

Source: Malaysia Digital SME Study 2018, SME Corp. Malaysia & Huawei Technologies (M) Sdn. Bhd

Most companies have “gut-feeling” where they want to go, want to be more agile, quicker to react, and more effective, want to know more about how the digitization of business process can bring new and improved value in a company, which ultimately thrive for progress to an efficient and high productivity organisation?

To help show the way forward, let me break this down for you…

Digital Disruption, the Rise of New Business Model

The era of digital disruption is the reality now, whether you desire it or not. It is not a choice but   rather that means breaking old habits and rethinking outdated mindsets. This refer to rethinking and reinventing new ways of working that focus on nothing, but creating value in constructing high performing organizational models to optimize your operation management, enhance marketing channels, which lead to creation of a great brand, thrive in the fast-changing business environment. It is by no mean, digital disruption create an opportunity for organisation revaluate itself and to gear organisation to set themselves apart from the crowd, to become new innovative competitor.

Source: McKinsey & Company: An Incumbent’s Guide to Digital Disruption

It is no longer a perception, digitization will save your company money. But still, company cannot justify to put a side resources in the digitization strategy, until they can gauge the core element in their organisation such as the start-up cost, the speed of access, the ability of business process be captured and remodel, operation efficiency, critical information visibility, quality engagement internal and client, brand recognition, and innovation of great products.

It is no longer a perception, digitization will save your company money

Indirect Cost and Benefit of Digitized Business Operation 

The effect of digitized process is tremendous, especially when currently OPEX is being consider in many small and medium enterprise, where the digitized business process mobile app with the ability to run in tablet and smart phone reflecting lower cost of operation,  and made possible under SAAS (Software As A Service) platform model has gain popularity – “pay as you grow”. The Operation expenditure model has gain traction and gradually been adopted rather than capital expenditure, which involved a bigger start-up cost. Here is the interesting part, immediately when a company decided to digitize the business process, whether it is internal and external, the transformation and cost savings continue, as different teams pour their work activity into a centralised information pool, spark off a drive for a better speed and  improvement processes, which will lead to the removing of inefficiencies and automating the steps in the process, which may need more human effort, expensive cost-of repeating task to gather pieces of required information and which is time consuming for employees, supplier and client.

Now, this is important, you can see such wide benefit of digitization business process, but enterprise need to commit to a next-generation operating model framework that combines digital technologies and operations capabilities in a well-sequenced way to achieve step-up change improvements.

Let me walk you through…

In Search for The Practical New Business Framework 

Generally, to see the cost benefit of digitization of business, there is a need to have a practical framework which has the capability to have constant measurement on the important core process in the most complex situation in one organisation. ie. Handling of sales process & collection, how many touch points has incurred to customer in order to achieve a complete sales cycle. Another example is how long is the time, the material request can be approved, with ability to be cross checked with inventory and buyer requirement? In other scenario, how much time those actions are taking, and whether they are boosting revenues and cutting costs.  But what does that mean? Such constant measurement, tracking, calculation will affect the impact of their digital initiatives more accurately, realignment of platform when necessary, to harness a different output.

It is no longer a perception, digitization will save your company money. But still, company cannot justify to put a side resources in the digitization strategy, until they can gauge the core element in their organisation such as the start-up cost, the speed of access, the ability of business process be captured and remodel, operation efficiency, critical information visibility, quality engagement internal and client, brand recognition, and innovation of great products.

Such constant measurement, tracking, calculation will affect the impact of their digital initiatives more accurately, realignment of platform when necessary, to harness a different output.

Key to Building a Successful Business Model through The Successful Framework

Yeah, until recently, every businesses of multiple size begin to see the potential of utilizing an app for their business process, probably the Key to building a successful business and to gain competitive edge in company is to have a framework that able to take frequent measurements of what is working and what isn’t, how much time those actions are taking. The truth is by adopting digital modified business with the framework of virtual office riding on effectiveness of mobility thru employing business app on a mobile device to transform a business process to anywhere, anytime, chances are that the framework can become reality and effective, creating a true unique entity in its own industry, as a result, business can run as productively as possible, grow solidly.

It is no longer a perception, digitization will save your company money. But still, company cannot justify to put a side resources in the digitization strategy, until they can gauge the core element in their organisation such as the start-up cost, the speed of access, the ability of business process be captured and remodel, operation efficiency, critical information visibility, quality engagement internal and client, brand recognition, and innovation of great products.

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