MALAYSIA'S DIGITAL PERFORMANCE INDEX - Accenture
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FASTER THAN EVER CAN MALAYSIA’S TOP COMPANIES WIN IN THE DIGITAL AGE? MALAYSIA’S DIGITAL PERFORMANCE INDEX
EXECUTIVE
SUMMARY
Fifty years after its inception, With digital accelerating growth
the Association of Southeast in the region, ASEAN’s digital
economy is projected to add
Asian Nations (ASEAN) is the
an estimated USD1 trillion to
world’s 6th largest economy the region’s GDP over the next
and the 3rd largest in Asia.1 10 years.2 To capitalise on this,
the Malaysian government has
set a goal of growing its digital
economy to 20 per cent
of national GDP by 2020.3
2 | MALAYSIA’S DIGITAL PERFORMANCE INDEX
As part of ASEAN – the world’s third largest
WE BELIEVE MALAYSIAN
market by population4 – Malaysian companies
can benefit from looking beyond national COMPANIES NEED TO DO
borders for new growth opportunities made MORE TO ENSURE THAT
possible by digital innovation. However, most
Malaysian companies remain in the early THEY REMAIN COMPETITIVE
stages of their digital transformation journeys. IN AN INCREASINGLY
Many have yet to realise improved financial
performance through the execution
DIGITAL GLOBAL ECONOMY.
of digital strategies.
To gauge the current level of digital
ACCENTURE HAS IDENTIFIED
transformation across corporate Malaysia, FIVE WAYS IN WHICH THEY
Accenture conducted an evaluation of CAN DO SO:
1
top Malaysian companies across multiple
industries, using Accenture’s Digital
Performance Index (DPI).
This index measures a company’s digital
Put digital at the core
performance across four key business of your business strategy
2
dimensions: planning, manufacturing,
selling and management. These measurements
show the extent to which a company plans
and executes digital strategies, creates digital Drive fast,
products and services, uses digital in marketing, iterative innovation
3
sales and customer service, and fosters a digital-
led innovation culture within the organisation.
Our analysis revealed that while 44 per Be hyper-relevant
cent of companies evaluated have digital
growth strategies in place, only 7 per to the customer
4
cent have announced dedicated budgets
to implement these strategies. And while
37 per cent of companies sold products and
Create flexible structures
services through mobile-configured channels,
just 15 per cent provided customers access that cut across silos
5
to delivery and services (e.g. click & collect, track
& trace) via digital means. Furthermore, only
11 per cent of companies regularly reviewed
the effectiveness of their digital investments.
Leverage the innovation
ecosystem
MALAYSIA’S DIGITAL PERFORMANCE INDEX | 3
MEASURING
THE DIGITAL
PERFORMANCE
OF MALAYSIAN
COMPANIES
Twenty-eight top These companies were scored using the
Accenture DPI framework, which is organised
companies in Malaysia across four key business dimensions – plan,
were selected for this study, make, sell, and manage. Each dimension was
broken down into three key action points along
providing an overview the value chain (see Figure 1), and a total of 42
business activities and 117 detailed behavioural
of the digital performance metrics were used to provide insights into
of leading players each company’s digital performance.
across industries such as: Companies were given scores between
1 and 4 for each business dimension,
Communications, Media, and the total score was averaged to derive
Banking, Insurance, Energy, an overall company score. Industry scores
were calculated from the average scores
Natural Resources, Utilities, of companies within the same industry, while
Public Transport and others. the Malaysia DPI score reflects the average
of these industry scores. All information
used for scoring was gathered from public
sources, providing a view of companies from
the perspective of investors and customers.
4 | MALAYSIA’S DIGITAL PERFORMANCE INDEXHere is a more detailed look at how digital applies in each of the
four key business dimensions:
PLAN MAKE
Looks at how digital trends are reflected Assesses the use of digital in innovation,
in strategic plans and their implementation. production and delivery. It evaluates whether
This covers the weight given to digital companies integrate digital into the design
in a company’s long-term strategic plan, and manufacturing process of their products
how that plan is translated across the value and services, and how digital streamlines
chain, and how investment and workforce activities across the supply chain.
allocations are planned.
SELL MANAGE
Evaluates a company’s management Examines the presence of digital technology
of the customer experience across digital and a digital mindset in a company’s corporate
channels. It analyses how digital is used culture and its internal operations. It evaluates
to engage customers, to sell through multiple how companies assess their own digital culture
channels, and to serve customers after a sale and infrastructure, and how they improve
has been made. efficiency and renew their resources with
the aid of digital.
Figure 1: Digital Performance Index: Business Dimensions and Action Points
PLAN MAKE SELL MANAGE
SEE DESIGN ENGAGE ASSESS
PLAN BUILD SELL IMPROVE
ACT RUN SERVE RENEW
DIGITAL CORPORATE
DIGITAL DIGITAL PRODUCTION DIGITAL CUSTOMER CULTURE AND
STRATEGY AND DELIVERY EXPERIENCE OPERATIONS
COMPANY STRATEGY COMPANY OPERATIONS
MALAYSIA’S DIGITAL PERFORMANCE INDEX | 5KEY
FINDINGS
Figure 2: Malaysia’s Digital Performance
Average DPI Score of Malaysian firms (Scores between: 1-4)
See 2.2
Avg
Plan 1.7 1.9
Act
Plan 1.6
Design 1.6
Avg
Build 2.1 1.7
Make Run 1.4
Engage 1.9
Avg
Sell 1.7 1.7
Sell Serve 1.6
Assess 1.5
Avg
Improve 1.5 1.4
Manage Renew 1.4
Malaysia 1.7 United States 2.5
Based
Basedon onthe
theaverage
averageforforeach
eachofofthe
thefour
fourbusiness
business Looking at specific industries, companies in the
dimensions,
dimensions,Malaysian
Malaysiancompanies
companieschalked
chalkedupupaascore
score banking
bankingindustry
industryemerged
emerged with
with the
the highest
highest overall
overall
of
of1.7.
1.7.By
Bycomparison,
comparison,companies
companiesin inthe
theUnited
UnitedStates
States score
scoreof
of2.3
2.3out
outof
of4.
4.Media
Media && Entertainment
Entertainment and and
scored
scoredan anaverage
averageof of2.5,
2.5,with
withglobal
globaldisruptors
disruptorssuch
such as Communications
Communicationsbothbothscored
scored 2.2.
2.2. Malaysian
Malaysian companies
companies
as Google,
Google, Salesforce
Salesforce and
and Uber
Uber achieving
achieving average
average scores in
inthese
theseindustries
industrieshave
havestarted
started to
to innovate
innovate using
using digital
digital
scores
of 3.5 of
out3.5
of out
4 in of 4 inDPI
other other DPI studies.
studies. technologies,
technologies,but
buthave
havesome
some way
way toto go.
go.
6 | MALAYSIA’S DIGITAL PERFORMANCE INDEXFigure 3: Highlights from the Malaysian Digital Performance Index
PLAN MAKE SELL MANAGE
Digital Strategy Digital Production Digital Customer Digital Corporate
and Delivery Experience Culture and Operations
44% 52% 37% 57%
include digital in their have launched new sell via configured use analytics for
growth strategy digital products mobile channels internal performance
7% have a dedicated 44% have digitalised 26% offer mobile 11% use analytics for
digital budget current products payment options employee competence
26%
have initiated
11%
use digital in their
15%
provide delivery
11%
review digital
digital partnerships manufacturing processes services via effectiveness
digital channels
None have gone 19% use digital for
beyond the pilot phase real time inventory
management
44% 4% 52% 30%
have appointed digital use M2M in their collect information provide digital
leadership supply chain via social media skills training
19% have dedicated 11% use analytics to 37% provide real-time 15% break silos with
digital leadership manage their supply digital communication initiatives to adapt
(not combined network to the digital agenda
with CTO/CIO etc.)
Nearly half the companies It is encouraging that Despite Malaysia’s high Just 11 per cent of the
analysed seem to more than half (52 per mobile penetration rate of Malaysian companies
recognise the importance cent) have launched 98 per cent5 coupled with analysed review the
of incorporating digital new digital products and high internet usage (77.6% effectiveness of their digital
into their growth strategy services, and 44 per cent active internet users),6 only investments on a regular
with 44 per cent creating have digitised existing 37 per cent of Malaysian basis. Also, while 30 per
leadership roles to drive offerings. The potential companies sell their cent of companies have
digital strategies. However, of digital, however, has products and services made the effort to improve
only one in five companies not been fully leveraged to using apps or sites their employees’ digital
have appointed leaders enhance manufacturing configured for use on skills through formal
dedicated purely to digital. processes, with only mobile phones. And training, fewer (15 per cent)
Also, few companies follow 11 per cent doing so. while more than half the have taken action to break
through in translating companies analysed gather the traditional silos that
intent into action, with only customer information from inhibit such skills from
7 per cent of companies social media, just 37 per being harnessed across
reporting dedicated cent offer the option of business functions.
budgets to implement real-time communication
digital programmes. with customers. With eight
in every 10 internet users in
Malaysia looking online for
information about products
and services,7 companies
are missing opportunities
to connect directly with
potential customers.
MALAYSIA’S DIGITAL PERFORMANCE INDEX | 7HARNESSING THE
FULL POTENTIAL
OF DIGITAL
Companies that achieve The business potential for Malaysian companies
rests not only on leveraging digital innovation
high scores across all four but also on its highly digital savvy population9
business dimensions are and young workforce: over 30 per cent
of its population is between 20 and 40 years
considered Digital Leaders. old.10 The Malaysian government has also
demonstrated a strong commitment to growing
Based on the World the country’s digital economy by mobilising
various agencies such as the Ministry of
Economic Forum’s Science, Technology and Innovation and
the Malaysian Digital Economy Corporation
Digital Transformation of (MDEC). These agencies are accelerating
Industries research, those digital adoption through various initiatives,
most notably the creation of the world’s
that understand the value first Digital Free Trade Zone (DFTZ).11
and importance of digital In this highly encouraging environment,
transformation are potentially what can Malaysian companies do to become
Digital Leaders, and ensure their investments
26 per cent more profitable,8 in digital initiatives enable them to expand
contingent on their ability and increase financial returns?
to successfully transform Accenture has identified five imperatives
to accelerate the journey towards becoming
the existing organisation. a Digital Leader, with examples of initiatives
taken by Malaysian companies that have
leveraged digital innovation to stay ahead
in their industries.
8 | MALAYSIA’S DIGITAL PERFORMANCE INDEX1 PUT DIGITAL AT
THE CORE OF
YOUR BUSINESS
STRATEGY
Digital Leaders understand
that their digital and company Telekom Malaysia recognised
strategies are one and the same. how digital would change its
business, and embarked on a digital
They proactively scan the business and external transformation journey in late
environments for disruptions that might impact
2015. It started at the top, ensuring
their industry. They are also well aware of their
management, including the CEO,
existing digital capabilities. Knowing how to use
fully bought into its transformation
digital to drive growth, they set up their internal
efforts before moving to change
and external strategies with dedicated budgets,
and put in place specific metrics to measure both its front and back-end
the effectiveness of their digital investments. operational and business support
system architecture.
In addition, they realise the importance
of actively involving senior leadership
in defining their digital strategies, and establish At the front-end, this included more
a governance structure to aid the implementation agile customer-facing applications,
of initiatives across various departments. and at the back-end, more stable
core systems. The company
And they don’t stop there – they understand
that having the right employee culture
also recognised that its workforce
is key to any digital transformation. By driving needed to be equipped and excited
focused communication and changes about this transformation, which
in the way work is done, these companies guided talent aquisition and the
ensure the shifts in mindset that are critical creation of agile cross-functional
to the success of their digital strategies. teams.12
MALAYSIA’S DIGITAL PERFORMANCE INDEX | 92 DRIVE FAST,
ITERATIVE
INNOVATION
What differentiates Digital
Leaders is not that they KFit, a Malaysian startup, first gained
drive innovation, but rather popularity by offering unlimited
the way in which they do access13 to gyms and fitness studios
for a fixed monthly fee. Realising
so: intelligently, quickly,
that the idea was not sustainable or
and with permission to fail. cost-effective, it scrapped unlimited
access and looked for other ways to
They relentlessly leverage analytics to inform
their decision making, helping them identify
give its customers a good deal. KFit’s
new products and services, as well as find analysis of usage data showed that
better ways to build on existing strengths. most customers only visited a gym
six to eight times a month. With that
The pace at which technology is developing knowledge, the company repackaged
today also means that companies must move
its deal to offer 10 sessions a month
fast. Digital Leaders emulate this thinking best
for a fixed price. This ensured that
by combining an ability to move fast with an
most users were not affected by the
ability to build – and rebuild – just as quickly.
change while giving heavier users
Instead of striving for perfection, they launch
new ideas and customer propositions for the option to purchase add on
the market to test, monitoring and pivoting sessions on an a la carte basis.
quickly when something doesn’t work.
10 | MALAYSIA’S DIGITAL PERFORMANCE INDEX3 BE HYPER-
RELEVANT
TO THE CUSTOMER
Digital Leaders leverage
digital channels to create Maybank launched a mobile wallet
unique interactive experiences payment service, MaybankPay, in 2016,
to encourage cashless payments.
designed to grab and retain
The app allows customers to pay using
their customers’ attention. their smart phones, and the amount
is then charged to their Visa cards.14
They delight their customers and ensure The company plans to launch the
they come back for more. app in Indonesia, Singapore and
Our analysis of global companies shows that the Philippines by the end of 2017.
while business-to-business (B2B) companies CIMB has taken several of its existing
are starting to think more about the customer branch activities into the digital space
experience, their focus tends to be more with initiatives such as CIMB Clicks,
on the “internal environment” — digitalising a one-stop financial portal, and CIMB
their internal processes (HR, finance, supply EVA, its award-winning Enhanced
chain, etc.). Business-to-consumer (B2C) Virtual Assistant and ASEAN’s first
companies, on the other hand, focus chat-bot banking application. In 2016,
more on transforming their “external facing its “1View” On-the-Go (OTG)15 platform
environment,” with customer experience was launched to establish a top-class
transformation being a prime area of focus. digital experience in all branches
by enabling current and savings
accounts to be opened instantly.
MALAYSIA’S DIGITAL PERFORMANCE INDEX | 114 CREATE FLEXIBLE
STRUCTURES THAT
CUT ACROSS SILOS
Digital Leaders ensure that Digital Leaders also ensure that their employees
are equipped with the necessary knowledge
digital transformations are and skills to drive digital initiatives. Advanced
treated just like any other digital skills take both time and resources to
business-driven transformation – develop. Having the right structure and support
to house and nurture talent will ensure that
with the right structure, skills
there is sufficient room and ample opportunity
and performance measures to build and sustain the skills required.
in place.
They understand that without a solid support
base, any digital transformation initiative will Sime Darby has taken action to better
be short-lived. support field employees through
Sime Darby Digital Supervision (SDDS),16
Yet, traditional organisational structures,
which makes use of GPS-enabled
pervasive in Malaysia, may not lend
handheld devices and allows real time
themselves to agile ways of working, nor do
and online reporting from the field. This
they encourage rule breaking or risk taking.
technology improves the transparency
Digital Leaders strive to break the silos within
of field harvesting activities and removes
their organisations, for instance, by forming
barriers to communication between
cross-functional teams that tackle problems
estate managers, assistants and
or incubate ideas across business functions.
supervisors, helping them to make
This organisational fluidity allows for greater
better and faster decisions.
collaboration, and creates a shared purpose
across more diverse groups of employees.
12 | MALAYSIA’S DIGITAL PERFORMANCE INDEX5 LEVERAGE THE
INNOVATION
ECOSYSTEM
Digital Leaders enter into
new and often unconventional Maybank, for example, launched
partnerships to enhance a regional, collaborative fintech
Sandbox17 that provides opportunities
their digital capabilities when
for start-ups and innovators to develop
building in-house capabilities and test new ideas. The first of its kind
may not be feasible. in ASEAN, the initiative allows start-
ups to leverage the banking group’s
They often collaborate on open innovation internal digital and technological
platforms with external partners such expertise, and get their ideas off the
as universities, start-up accelerators and ground. By providing an ecosystem that
technology/solution providers. This has the brings together regional developers,
double benefit of offering them quick access businesses, academia, and other start-
to capabilities while allowing them to maintain ups, the bank hopes to accelerate and
lower levels of up-front investment. They gain exponentially grow regional fintechs,
a degree of nimbleness and access to new while keeping themselves abreast
ideas, capabilities and funding, which helps of the latest innovations in this space.
them innovate and scale faster than their peers.
MALAYSIA’S DIGITAL PERFORMANCE INDEX | 13CLOSING
THE GAP
While some early To meet its goals, Malaysia
adopters have shown and its corporations need to
move quickly and decisively.
good progress in driving
digital transformation, Malaysia has many natural strengths
that could accelerate its digital journey,
the gap between corporate namely, a relatively young, multi-lingual
and multicultural workforce, as well as strong
Malaysia and global commitment at both government and corporate
leaders is still significant. levels. With 2017 designated the Year of the
Internet Economy, and the creation of the
This seems to be a prevailing regional world’s first Digital Free Trade Zone (DFTZ),
trend, with many other ASEAN countries e-commerce growth is expected to double
still lacking the infrastructure and policies to over the next three years and contribute
drive a digital economy.18 Early adopters have RM211 billion to GDP by 2020.19
cast a spotlight on some of the challenges and
solutions, demonstrating the gains to be made The five imperatives identified above provide
from a speedy adoption of digital, as well as Malaysian companies with a framework that
some of the pitfalls to be avoided. Given the will help propel their digital transformations.
pace of technological change, companies Malaysian companies must seize the
must embrace the need to experiment while opportunity now to capitalise on ASEAN’s
also allowing for and learning from failure. growing digital economy, not just today,
but in the next 10, 20 or even 50 years, and
they need to move faster than ever before.
14 | MALAYSIA’S DIGITAL PERFORMANCE INDEXMALAYSIA’S DIGITAL PERFORMANCE INDEX | 15
References http://www.malaysiastock.biz/GetReport.
16
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https://www.weforum.org/agenda/2017/05/asean- 1742167602495.pdf&name=Sime%20Darby%20
at-50-what-does-the-future-hold-for-the-region Annual%20Report%202016%20(Pages%20062%20
-%20111).pdf
2
http://www3.weforum.org/docs/Media/ASEAN17/
ASEAN17_Regional%20Agenda_brochure.pdf 17
http://www.maybank.com/en/news-
support/newsroom-detailpage.
3
The digital economy is expected to contribute 20%
page?detailId=149923959485806
of GDP by 2020, COPYRIGHT © 2017 THE STAR
ONLINE 18
https://www.weforum.org/agenda/2017/05/asean-
at-50-what-does-the-future-hold-for-the-region
4
https://aseanup.com/asean-infographics-
population-market-economy 19
https://www.mdec.my/news/malaysia-launches-
worlds-first-digital-free-trade-zone#
5
https://www.dosm.gov.my/v1/index.php?r=column/
cthemeByCat&cat=395&bul_id=Q3l3WXJFbG1PNjRw
cHZQTVlSR1UrQT09&menu_id=amVoWU54UTl0a21 About Accenture
NWmdhMjFMMWcyZz09
Accenture is a leading global professional services
6
https://www.mcmc.gov.my/skmmgovmy/media/
company, providing a broad range of services and
General/pdf/IUS2016.pdf
solutions in strategy, consulting, digital, technology
7
https://www.dosm.gov.my/v1/index.php?r=column/ and operations. Combining unmatched experience
cthemeByCat&cat=395&bul_id=Q3l3WXJFbG1PNjRw and specialized skills across more than 40 industries
cHZQTVlSR1UrQT09&menu_id=amVoWU54UTl0a21 and all business functions – underpinned by the world’s
NWmdhMjFMMWcyZz09 largest delivery network – Accenture works at the
8
http://reports.weforum.org/digital-transformation/ intersection of business and technology to help clients
wp-content/blogs.dir/94/mp/files/pages/files/dti- improve their performance and create sustainable
executive-summary-website-version.pdf value for their stakeholders. With more than 411,000
people serving clients in more than 120 countries,
9
https://www.dosm.gov.my/v1/index.php?r=column/ Accenture drives innovation to improve the way the
cthemeByCat&cat=395&bul_id=Q3l3WXJFbG1PNjRw world works and lives. Visit us at www.accenture.com.
cHZQTVlSR1UrQT09&menu_id=amVoWU54UTl0a21
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Authors
10
https://www.livepopulation.com/country/malaysia.
html Lim Yin Sern, Managing Director, Accenture Strategy
11
https://www.mdec.my/news/malaysia-launches- Teh Wee Vien, Manager, Accenture Strategy
worlds-first-digital-free-trade-zone
Loganantha Esparan, Consultant, Accenture Strategy
12
https://inform.tmforum.org/customer-
Bobby James, Manager, Accenture Research
centricity/2016/10/telekom-malaysia-sets-off-digital-
transformation-journey/ Karyn Chua Su Yin, Specialist, Marketing
& Communications, Accenture
13
https://www.techinasia.com/kfit-ends-unlimited-
gym-access
To learn more, visit
14
http://www.thestar.com.my/news/
https://www.accenture.com/MalaysiaDPI
nation/2016/07/22/a-smarter-way-to-pay-maybank-
introduces-first-mobile-wallet-for-smartphone-users
15
http://www.cimb.com/content/dam/cimbgroup/pdf-
files/annual-reports/CIMB2013_AR.pdf
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