In these pandemic-ridden times, frontier or disruptive technologies such as artificial intelligence (AI) and the internet of things (IoT) are increasingly touted as a panacea for building greater business resilience and growth through competitive advantage.
Not wanting to be left behind in the transformational stakes, companies turn to providers who offer more than an array of digital technologies.
Last week’s latest IDC Financial Insights Asia/Pacific report Cloud Outlook 2021 is the latest in a series of confirmations of multiple sectors ramping up Covid-19-inspired digital transformation efforts.
For example, according to IDC’s January 2021 Worldwide Public Cloud Services Spending Guide, Asia/Pacific excluding Japan (APEJ) public cloud spend of financial services institutions (FSIs) will grow more than three times from USD 4.9 billion in 2019 to US$18.1 billion in 2024 at a compound annual growth rate (CAGR) of 29.9%.
Disruptive.Asia turned to one of these providers to share insights on unlocking the optimum value from their enterprise software and investment in innovation:
Established in 2005, Rimini Street provides support services for enterprise applications from SAP, Oracle, Salesforce.com and others. Its goal is to achieve US$1 billion in revenues by 2026.
Additionally, Rimini Street has leveraged a best of breed open source technology and tools to build its own AI platform, according to a recent media report with the company’s Executive Vice President of global service delivery, Brian Siepko.
Speaking to the steps on building business resilience and creating competitive advantage in Asia, Andrew Seow, general manager for Southeast Asia and Greater China at Rimini Street, explained that the company had helped more than 4,000 organisations with client operations in 149 countries.
Admittedly, disruptive and accelerating technologies have the power to capture the imaginations of people today, says Seow. “To harness this disruption effectively, companies need to set clear strategies for their digital journeys.”
“Amid global disruption, the cloud has become an attractive option to reduce IT costs, improve performance, and serve as the basis for launching new technologies like AI and machine learning (ML),” he continued. “Cloud has also become an option to better reach customers and business partners who have migrated to remote operational models.”
“However, there are some complex, resource-intensive applications and infrastructure that may never be cloud-ready, Seow warned.
“Therefore, business leaders need to strategise and know what their business priorities are. A cloud strategy that puts the business first, rather than transitioning to the cloud for cloud’s sake, can help accelerate growth and innovation.”
Identifying business challenges with a structured plan embraces vision and strategy and must come first – before jumping onto the disruptive tech bandwagon.
Seow suggested that: “A business-driven roadmap is a rolling three to ten-year plan that translates an enterprise’s business strategy into technology initiatives that enable it to achieve its objectives. A primary high-level roadmap shows technology investments aligned with business goals, priorities, resources and timing. The key difference between a business-driven roadmap and other roadmaps is a business-defined destination.”
Besides, there is no one-size-fits-all roadmap, and he points out.
“A single view of the roadmap will likely be too limited to show every layer and detail involved in an organisation’s IT strategy. Organisations may require more roadmaps to capture specifics, such as how new business capabilities will be implemented. Likewise, roadmaps may be used to show how a given strategy will be executed.”
For example, roadmaps can be used to compare the best approach to cloud migration, whether that be with the use of infrastructure (IaaS), platform (PaaS) or software (SaaS) as a service. The IT roadmap should reflect the priorities and timing needed to align with an organisation’s business goals.
Data: the elephant in the room
This bandwagon includes the potential benefits to be derived from AI. Fuelled by a fundamentally different approach via data-driven decision making, AI could, for example, boost profitability rates in the manufacturing sector by an average of 39% by 2035.
However, the journey starts with the question of whether your organisation is ready for AI. Because the elephant in the room is the availability of data in a suitable form, the answer usually is ‘no’.
Great effort in preparing and integrating data is critical to unlocking the benefits of AI.
“The decision to upgrade or embrace next-generation products should depend on whether it fits with an organisation’s business priorities,” advises Seow.
“CIOs are ultimately responsible for aligning IT strategy with business objectives. Supporting business growth may require extracting more value from existing resources to fund innovation in other areas of the business,” he suggests.
“Since vendors are not aware of all of the struggles that each business faces, CIOs are left to evaluate the benefits and risks of moving resources to the cloud or upgrading on the vendor’s schedule.”
Alignment in the C-suite and at the board level ensures that no conflicting priorities take over the IT transformation agenda. Instead of taking a ‘cloud-first’ approach, CIOs should be taking a ‘business-first’ approach, he said.
“If an organisation can benefit from vendor upgrades, cloud, or new products at the right price points – they should take advantage of it,” Seow continued. “However, if vendor contracts are restricting an organisation’s ability to fund innovation in other parts of its technology infrastructure, the organisation should be prepared to go its own way.”
Many companies have spent years tailoring their ERP to meet business needs but are ready to make more significant investments in CRM, analytics, machine learning and the Internet of Things. Companies will need to ensure that they are not compromising their priorities by sticking to costly vendor contracts to take that next step.
Building resilience with IT
In the current challenging economy, Seow said, “We are seeing CIOs and IT leaders under immense pressure to prioritise efficient cost structures and adjust revenue reality in order to keep their businesses going while at the same time ensuring they are relevant, competitive and have the ability to innovate at a faster pace to accommodate the ever-evolving needs of consumers.”
Business leaders need to rethink some of their strategies, and one of the key areas they should focus on is their IT investments.
“Rethinking their IT strategies and investments can lead to cost savings and provide an opportunity for businesses to innovate further,” explained Seow.
He gives us an example of an organisation that has successfully applied this strategy in recent years, which he described ‘as a leading Malaysian automotive company.’
Tasked with a mandate to reduce its overall operating expenses by 30%, this automotive manufacturer decided to switch to Rimini Street for third-party ERP support and maintenance.
Seow said so far, the company has managed to save 50% in annual maintenance fees and now also receives more proactive and high-quality support in comparison to what they were previously receiving from the vendor.
“The savings reaped have enabled the automotive company to accommodate greater production volumes, expanding their business and manufacturing plant,” he added. “Rimini Street helped to maximise the value of the company’s investment in their technology so that they could convert the savings they received to drive innovation forward.”
“In addition, instead of having to abide by a technology provider-imposed timeline, they had the agility and freedom to be able to upgrade to the latest version of SAP software and/or if it makes sense for their business.”
Adopting a pragmatic approach brings its own reward.
“For many enterprises, businesses can stay on track by maximising their assets,” Seow explained. “Organisations should consider reducing complexity and cost while introducing cloud solutions. “
“They should also consider avoiding unnecessary upgrades or migration as they can suck your budget away for very little value,” he continued. “In an increasingly complex digital environment, IT leaders need to simplify their IT landscape in order to support it.”
“They will likely have a hybrid technology portfolio for some time, so they need to make sure that it is agile and can change at the pace of business,” he said.
“Finally, business leaders should lean heavily on their IT counterparts for strategic planning in order to make sure their digital investments are a good fit in the technology portfolio and can be supported over time.” Seow concluded: To thrive in 2021, business leaders need to strategise on ways to optimise their investments, avoid unnecessary expenditure such as ERP upgrades that are not crucial, and be mindful of costly vendor contracts that keep them locked in. At the same time, businesses also need to ensure they remain competitive and relevant through ongoing innovation.