Companies should focus on ever-changing customer behaviour, says KPMG Malaysia Partner

Alvin Gan joins the panel of judges at the Malaysia Technology Excellence Awards 2022.

As a Partner in KPMG Malaysia, Alvin Gan heads the Management & Technology Consulting practices of the firm. 

With 25 years of experience providing strategy and technology-advisory services to clients across multiple sectors and industries, he has worked closely with many CxOs and technology leaders to harness technology disruption and more effectively manage resources to drive agility and improved business performance.

Alvin specialises in the Financial and Public Sector where he provides advice on Digital Transformation and tech strategy. Alvin often serves as a panel speaker at events organized by various organizations to share his thoughts on topics in the Technology and Digital space. He strongly cultivates the idea of a “Creative CIO”, whose role is to enable organizations to move beyond “keeping the lights on” to creating new business values.

Joining the elite panel of judges at the Malaysia Technology Excellence Awards, Alvin spoke with Singapore Business Review as he shares his thoughts on Malaysia's crypto economy and the challenges that the country’s businesses are facing in their digital transformation  journey.

How has your experience in technology advisory across industries impacted your professional career?

Over the last 25 years, I have had the chance to work with many CxOs, providing strategy and technology-advisory services to clients across multiple sectors and industries. These included leading large-scale projects across various industries in the fields of technology/digital transformation and innovation, client strategy as well as governance, risk and compliance services. Specifically, working hand-in-hand with technology leaders to harness technology disruption and more effectively manage resources to drive agility and improved business performance. Additionally, in recent years, I have had the privilege of being on advisory panels on selected universities in Malaysia. In this capacity, I work closely with leaders in academia to help shape the direction of the next generation leaders in identifying industry needs and matching them to the tertiary level education.   

I cultivate the idea of a “Creative CIO” as a transformational business leader and technology strategist, whose role is to enable organizations to move beyond “keeping the lights on” to creating new business values. This is further underlined as many kept afloat in enduring the COVID-19 coronavirus pandemic over the last 2 years. The pandemic prompted many organizations to rethink their existing strategies – one prominent theme is business leaders’ commitment to digitization. A sizeable majority of leaders have reported the acceleration of new digital business models and revenue streams and to develop a seamless digital customer experience. Many turn to technology as the key enabler in adapting to the new normal. It is little surprise that this digitalization wave has also had a direct impact on the emerging tech trends in Malaysia. The government launched the Malaysia Digital Economic Blueprint (MyDigital) in 2021, which is expected to transform the country into a technological-advanced economy by 2030. It is a holistic approach encompassing billions of Ringgit in investment for digital connectivity including 5G. Additionally, under the MyDigital, various strategic initiatives were identified such as establishing a conducive regulatory environment for digital economy development, building the right digital infrastructure and supportive regulatory framework and nurturing digital talents to help push the establishment of startups in the country. Not forgetting the digital bank agenda in which Bank Negara Malaysia (BNM) will announce 5 licenses in the next couple of weeks. Digital banks will look to utilise emerging technologies such as cloud and intelligent automation to design their products around customer needs and the financial inclusion agenda.

So, just like the conversations have evolved over the years, my role in the technology industry has also evolved. And today, it’s not so much about colouring outside the box as what it used to be 25 years ago, but more about making the box a little bigger each time.

What can you say about Malaysia’s crypto economy? Has the country adopted cryptocurrency and blockchain technology? In which stage of adoption is the country at? 

Technology has played an important role during this pandemic. Governments are using various technologies to monitor citizens’ movements, as well as to collect data for analysis and reporting e.g. on a number of positive and negative cases, deaths, patients hospitalized and hospital bed utilization etc. – the list goes on. Whilst the pandemic had exposed the limitations of modern healthcare, it has also accelerated the adoption of technologies in this sector. 

As an example, as a response to the virus outbreak, governments have rolled out mobile apps within a short period, as one of the methods of tracking outbreaks. Blockchain, specifically, is gaining attention as governments and organizations seek to effectively boost trust across supply chains in response to the COVID-19-related disruption. When global trade networks break down, blockchain not only helps establish new relationships quickly based on data that is transparent, verifiable, and trustworthy, but can be the engine that powers business processes that are more digitally oriented, cloud-based, and broadly connected. According to the 2020 KPMG Enterprise reboot report, more than half of business and technology executives surveyed are investing in blockchain because of its ability to facilitate trust through transparency and traceability.

Moving forward in 2022, the digitalisation of the financial sector is continuing at a pace, with demand for retail crypto assets growing exponentially. The potential benefits of these technologies like increasing payment efficiency, reducing cost and expanding financial inclusion have been widely acknowledged by regulators. However, regulators have also highlighted concerns around the possible risks and are stepping up warnings to consumers and investors. 

Specifically on cryptocurrencies, at the point of writing, they are yet to be recognised as legal tender in Malaysia (The Star, 2022). Additionally, Bank Negara Malaysia (BNM) has yet to regulate cryptocurrencies as a payment instrument in the country. In my view, this recent development suggests a couple of things. On one hand, there are folks who intend to ride the cryptocurrencies wave just as many have in other parts of the world. But on the other, many argue the many uncertainties and volatility of these digital currencies make it a longer process before they are finally recognized as a legitimate payment instrument in Malaysia. The crypto world is beginning to connect to the traditional financial system, as large fintech and crypto firms, which are generally not subject to comprehensive supervision, offer bank-like products and services and regulated firms build crypto infrastructure, e.g. Custody services, exchanges. In short, regulators have an enormous task ahead as they try to figure out how to bring the quickly-evolving crypto world effectively within the regulatory perimeter without destroying its potential to significantly enhance the financial system. Not only will this safeguard financial stability, but it will allow the benefits of this technology to flourish in a sustainable way.

What are the common challenges firms encounter as they ramp up their digital transformation?

Based on experience, most of my clients agree that they need to drive an organization-wide digital reinvention. However, Malaysian organizations embarking on digital transformation are being challenged by a lack of the right IT skills. This will mean masterminding a fundamental reboot of skills and technology, accelerating the adoption of advanced technologies and undertaking wholesale upskilling of the workforce. Of course, there is a myriad of other factors involved to make businesses sustainable and profitable. But I cannot stress this point enough. You have to get the people factor right from the get-go. It is a point often discussed revolving around digital transformation, but a tough nut to crack. Our survey found the top three scarcest skills are big data/analytics, cyber security and artificial intelligence. Findings show that skills shortages are at an all-time high since 2008 and that these shortages act as a bottleneck to growth.

The other common issue we observed that derails digital transformation is the resistance to change. This is observed in almost every layer of the organization, where corporate leaders have enjoyed a certain degree of comfort. Resistance to change can grind transformations to a halt. It's up to the CEO to rally the troops, aligning everyone around the strategy, narrative and vision.

Lastly, for Malaysian businesses to thrive in the digital world, they must not only provide superior experiences for their customers, employees and other stakeholders, but also deliver on the value in a faster, more nimble way. The opportunities are immense, but only for organizations that understand how far and fast they need to transform. Digital disruption is creating new opportunities for organizations to add value. When a business truly understands its customers and the speed at which their desires now change, value is created by meeting their customers’ expectations – no more, no less.  

What advice would you give to Malaysia’s tech entrepreneurs and startups as they navigate a recovering economy amidst the pandemic?

As businesses look beyond the immediate impacts of COVID-19, towards recovery and a new reality, it’s time to adopt a connected enterprise mindset and accelerate digital transformation. COVID-19 has been a catalyst for tactical digital transformation. Organizations had to react quickly to enable remote working, shift to digital channels and transform products and services to meet the changing demands of customers. The pandemic has forced organizations to urgently leverage new technologies and ways of working, implementing digital projects in mere weeks that would previously have taken months, if not years. However, there are concerns that these rushed, reactive initiatives may have addressed a short-term need at the risk of long-term success. As we fundamentally alter the way we live and work, once-simmering changes are now driving a digital revolution – whether your organization is ready or not. To compete in the new reality organizations will need to accelerate the adoption of new technologies to keep pace with existing and emerging competitors. However, to strengthen a long-term strategic position, addressing the new environment with a fragmented, disconnected approach is no longer an option. 

When it comes to the mindset, it used to be the “Wait-for-Digital” mindset as digital transformation initiatives in several industries totter at the edges. Today, we observe the “Straight-to-digital” mindset to be more prevalent as COVID-19 becomes the burning platform to change. In this context, for many companies, customers have already migrated to digital. Employees are already working fully remotely and are agile to some degree. Companies have already launched analytics and AI initiatives in their operations. IT teams have already delivered at a pace they never have before. But for most companies, the changes to date represent only the first phase of the changes that will be necessary. 

One of the key considerations to factor in is the ever-changing customer expectations. 

Customer behaviour has changed, and priorities have shifted. Already demanding consumers are now buying more consciously and looking to digital channels to provide a smoother, more efficient customer experience (CX). Fragmented digital infrastructure and lack of alignment between front, middle, and back-office functions – from customer service, to supply chain and operations, HR and IT- cause disconnects. This impacts the ability of organizations to deliver a seamless CX and to be truly engineered for profitable growth. Organisations would now need to rebuild their business around customers to create a borderless organization, where people and technology interact for new levels of productivity and value creation. Apart from this, organizations would need to create a nimble, scalable business. Harness the latest technologies, leading business practices and tested solutions for a smarter, faster path to the right operating model, while also proactively managing risk and regulation, from compliance and operationalization to the transformation cycle, building confidence and inspiring stakeholder trust.

Which trends in IT and digital transformation do you predict would last for many years to come?

Over the last 2 years, we have witnessed a massive digital change in response to COVID-19. The pandemic has accelerated our understanding that technology can and must be a force for good. From developing and distributing life-saving vaccines to throwing businesses a lifeline by helping them pivot to online operations, to tackling climate change, to bringing about greater social equality through the power of online learning, technology’s critical role in our world now and in the future has never been more clear. As we look forward and prepare for a post-pandemic future, we’re optimistic the latest tech trends can help address some of our most pressing business challenges — and build a more equitable, resilient society. In particular, the much-hyped ‘metaverse’ and discussions on ESG.

Based on our industry insights and conversation with clients and colleagues, here are the top tech trends (in no particular order) – we believe have the power to shape Malaysia’s year ahead:

• Hyperscalers: Winners of cloud concentration to dominate software and IT services market
• Industry clouds: Tailored platforms become the next big evolution
• Automation: Basic automation technologies like Robotic Process Automation (RPA) and advanced application of Machine Learning (ML) become mainstream
• AI: Effective governance and tooling drive adoption at scale
• Quantum computing: Near-term applications promise to optimize complex processes
• Metaverse: Business models pivot from physical to virtual real estate
• Cybersecurity: Threat actors playing in the gaps and software assurance are top challenges
• Low-code/no-code: Cultural change needs to follow technological advancements
• Hybrid working: Choice in the digital workplace drives productivity and well-being
• ESG: Data becomes critical to modelling scenarios and tracking progress

As a judge in the Malaysia Technology Excellence Awards, what do you think will set the winners apart from other contenders?

The cycle of innovation is speeding up, and talented entrepreneurs are ready to take over and invent the next disruptive technologies. That said, there are a few areas that I believe separate the best from the good.

The most important is building a strong brand. Building a brand is all about shaping public perceptions. To this effectively requires careful planning and execution. One should think about defining a higher purpose and mission statement. Secondly, how do you differentiate your brand? The uniqueness of your offering is only powerful if your target market agrees. Marrying differentiation with relevance is a recipe for success. 

Next, is how innovative you are. That is, coming up with innovative ways to tap into a strong ecosystem that includes venture capitalists, talent to fully leverage the ecosystem. The primary advantage of aligning your venture within the startup ecosystem is your improved access to experience and resources that can help bring the venture quickly and successfully. To succeed, one must develop initiatives to promote industry innovation and identify promising technologies.  As mobile and cloud technologies bring greater numbers of connected consumers to the global marketplace, acquiring and serving customers is far easier today than it would have been only a few years ago.