Malaysia is ranked ahead of Singapore and Japan in terms of digital maturity, according to the latest Dell Technologies Digital Transformation (DT) Index. Even so, 85% of business leaders in the country admitted that digital transformation should be more widespread throughout their organisation. Meanwhile, 51% believe they will struggle to meet changing consumer demands within five years, and 48% worry their organisation will be left behind.
The index was produced by Dell Technologies in collaboration with Intel and Vanson Bourne, and surveyed 4,600 business leaders from mid- to large-sized companies across the globe to score their organisations’ transformation efforts.
The index divided the business leaders surveyed into five benchmark groups – digital leaders, digital adopters, digital evaluators, digital followers and digital laggards. About 41% of Malaysian business leaders surveyed fell under digital followers, which was defined as leaders who make very few digital investments and are tentatively starting to make plans. This was followed by digital evaluators (28%), who are gradually embracing digital transformation and investing for the future. Only 3% of Malaysian business leaders were categorised as digital leaders who had digital transformation ingrained in their DNA.
Digital Leaders (Digital transformation is ingrained in their DNA) Malaysia today: 3% Global today: 5% Global in 2016: 5%
Digital Adopters (Have a mature digital plan, investments and innovations in place) Malaysia today: 18% Global today: 23% Global in 2016: 14%
Digital Evaluators (Gradually embracing digital transformation; planning and investing for the future) Malaysia today: 28% Global today: 33% Global in 2016: 34%
Digital Followers (Make very few digital investments; tentatively starting to make plans) Malaysia today: 41% Global today: 30% Global in 2016: 32%
Digital Laggards (Do not have a digital plan; limited initiatives and investments in place) Malaysia today: 10% Global today: 9% Global in 2016: 15%
On a global level, emerging markets such as Thailand, India and Brazil are the most digitally mature, compared to developed markets including Denmark and France which are slipping behind. The index also stated that emerging markets are more confident in their ability to disrupt rather than be disrupted (53%), compared to just 40% in developed nations.
The latest index builds on the first ever DT Index launched in 2016. The two-year comparison highlights that progress has been slow, with organisations struggling to keep up with the blistering pace of change. While the percentage of digital adopters has increased, the index said there has been no progress at the top. Almost four in 10 (39%) businesses are still spread across the two least digitally mature groups on the benchmark (digital laggards and digital followers).
Top five barriers to digital transformation success
According to the index, 91% of those surveyed are held back by persistent barriers. Globally, the top five barriers to digital transformation success are data privacy and security concerns; lack of budget and resources; lack of the right in-house skillsets and expertise; regulation and legislative changes; and an immature digital culture.
Half of Malaysian business leaders believe their organisation will struggle to prove it is trustworthy within the next five years, while 31% do not trust their own organisation to comply with regulations such as GDPR. Meanwhile, 38% do not trust their own organisation to protect employee or customer data.
To realise their digital future, 56% of those surveyed in Malaysia said they are developing in-house digital skills and talent, this includes teaching all employees how to code. The index also listed cybersecurity, Internet of Things technology, multi-cloud environment, AI and computer-centric approach as the top technology investments for the next one to three years.
“In the near future, every organisation will need to be a digital organisation, but our research indicates that the majority still have a long way to go. Organisations need to modernise their technology to participate in the unprecedented opportunity of digital transformation,” Michael Dell, chairman and CEO of Dell Technologies, said.
This story was first published in Marketing magazine.
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