Deloitte Southeast Asia Partner tells the tale of a thriving post-crisis economy

Read through to hear his story about a corporate player, a startup and a social enterprise.

In the midst of uncertainty, Justin Kean Hu Ong, one of this year’s judges for the Malaysia Technology Awards, believes that businesses can find opportunity by buying into new channels to deliver their products and services to customers, whilst adhering to new regulations.

Based out of Deloitte’s Kuala Lumpur office, he is responsible for driving innovation, technology and data analytics initiatives, as well as one of the partners in the firm.

Leading and mentoring Deloitte’s financial and regulatory risk practice, he has worked with more than 50 financial services institutions across the Asia Pacific region, Europe and Africa. He’s currently pursuing a PhD with the Global University of Islamic Finance (INCEIF).

He provides support to the boards and C-suite with their transformation programmes, focusing on digital, capital, finance, risk, compliance and audit-related matters. Justin holds qualifications (CFA, FRM, BTRM and CA) and a regular spot in professional affiliations.

We talked to Justin before the winners announcement of the Malaysia Technology Excellence Awards, as he gave us a rundown of the new models, trends that will shake up economies, as well as Malaysians’ #kitajagakita mindset that encourages everyone to pursue local.

Can you share with us any work experience and backstory which have contributed to your professional career?

At Deloitte Malaysia, I am currently the Innovation Leader as well as a Partner in the Financial Services team. Outside of work, I am the President of the CFA Society Malaysia, as well as a father of three children.

My passion has always been in the financial services industry. I began my career in 2008, after graduating with a degree in accounting. I have spent most of my time in the management consulting industry. Over the years, I’ve invested much of my time deepening my industry knowledge, which included taking professional papers and certificates on financial risk management, treasury, asset and liability management, and investment. Currently, I am undertaking my biggest challenge yet—completing a PhD in Islamic Finance with the Global University of Islamic Finance (INCEIF).

At my current job, I work closely with clients in the financial services industry. Riding on the wave of digitalisation, banks in Malaysia have been aggressive with analytics adoption. Given that digital banking is set to be the next big thing, I am now also serving non-FSI clients who are keen in acquiring the digital banking license. By combining industry expertise and technical know-how with analytics tools, I have assisted over 50 financial services clients in the Southeast Asia region to constantly transform to constantly stay relevant in this ever-changing environment.

My life motto is—Be gritty and embrace a growth mindset. Your best performance today will be your baseline tomorrow.

With BAU and BCPs being tested amidst the circuit breaker. How are enterprises coping in their operations and how are they responding to consumer expectations?

We observe the transitions below.

Growth to survival
There has been a change of business strategy—shifting from a “growth” to “survival” mindset. Risk management is often overlooked when the economy is good. With COVID-19, many businesses had to put their expansion plans on hold as they scrambled for cash to finance their fixed costs.

Uncertainty to action
Adapting to the new norm in line with business and consumer needs. Consumers are still expecting a certain level of normalcy with business transactions, within the boundaries of the circuit breaker. As such, in the midst of uncertainty, businesses are now forced to look into new channels to deliver their products and services to customers while adhering to the regulations.

Traditional to Mission Possible
Prior to COVID-19, many brick-and-mortar companies were operating based on their traditional business model. Digital transformation was thought to be either non-essential or mission impossible due to the lack of resources and skill sets. However, in the current business environment, it is no longer a matter of good-to-have anymore, but a life-and-death of the business. Having had to adapt to the current needs of the business landscape, going digital has not been as hard as it was previously perceived.

Various factors contribute to the characteristics of the new norm. Let’s look at the new business landscape created by the pandemic.

From offline to online
In a setting where people are disconnected physically and their only means to the outside world is through digital channels, it is evident that digital natives will have a head start. Inspired by the success stories, traditional businesses who have yet to build their online presence will jump on the bandwagon, in an attempt to replicate the online business model.

Low-touch economy
Due to the high contagion rate of COVID-19, physical distancing has become the new social contract as businesses operate in a low to no human contact environment. Digital tools which reduce physical contact are now in high demand. A good example will be the rise of e-wallet services when making payments. Another example is the use of online registration forms or QR codes for contact tracing purposes, instead of the traditional pen and paper records.

Virtual customer experience
Customer experience has been greatly limited to interactions on digital platforms. Businesses are now exploring virtual realities and re-designing their customer journey in order to simulate a similar shopping experience. Zoom—being a popular video conferencing tool—has a “raise hand” function, where participants in the Zoom meeting can raise their hand virtually to join the conversation. This is to replicate the physical action commonly performed by participants in an in-person event.

However, we do recognise the limitations of a virtual customer experience. Digital media companies, online education and digital entertainment will thrive as their businesses already have an existing online footing. Unfortunately, businesses that rely on footfall, where their services cannot be digitalised, will suffer the most—for example, cinemas, sports stadiums and massage parlours.

Coming together in the face of crisis
The pandemic has dealt a heavy blow to the economy. The silver lining of the pandemic is seeing how the community can come together to support local businesses. With this #kitajagakita mindset, consumers are now more conscious in buying local. Market players are also looking at creative ways to help these businesses. For example, Fave leveraged on their network and launched an e-card sales campaign to raise cash for SME owners. It is certainly heartwarming to see our community coming together, with Fave waiving transaction fees and consumers supporting their favourite shops, to provide small businesses with the crucial cash capital needed in this challenging time.

In the face of crisis, I think it is important that we stay optimistic and resilient as only then can we channel positive thoughts to count our blessings and focus on making an impact that truly matters in life.

Which new products or services do you think would thrive post-crisis?

Despite moving into the Recovery Movement Control Order (RMCO), the fear in our people over the pandemic will still take several months to fully subside.

With the importance of social distancing, businesses with an online presence, low human contact and good digital customer experience have all the necessary ingredients to ride through the storm and thrive in the aftermath.

• Physical distancing economy: Sanitary products, logistics, and digital tools and service providers.

Online activities will continue as consumers are now accustomed to delivery services and online activities. The increase in online activities are key drivers for service providers such as those in the field of online collaboration tools, cloud service and Software as a Service (SaaS).

• Remote working: Co-sharing workplace and home-based businesses

Many businesses have also realised that they can do without fixed monthly rental costs as their workforce can continue working from home and still deliver their KPIs. This gives rise to the use of co-sharing workplaces. On the other hand, innovative home makers will continue to venture into businesses from home, turning their hobbies into revenue-generating pastimes like selling food and homemade crafts.

• Business management: Specialised services and outsourcing business

Businesses providing specialised professional solutions which come with an option for outsourcing, will be fairly popular. By working with professional service firms, businesses can tap into their expertise without having to search for and invest in resources internally, resulting in a more effective and efficient business model. 

What’s your view on Malaysia’s tech entrepreneurs and startup ecosystem? Which industries are ramping up with their digital innovations?

To me, innovation is not a sprint, but a marathon. It is a continuous process that is being done by every industry. Instead of looking at which industries are ramping up, it’s much easier to highlight which are not adapting fast enough. The moment a business becomes complacent, they stop innovating.

There are three innovative stories I’d like to share—a corporate player, a startup and a social enterprise. Together, let’s explore how innovative solutions were adopted through different stages of their business life cycles.

First, take a look at glove manufacturers—a traditional and labour intensive business. By the end of 2020, Oxford Business Group estimates the global demand for gloves to balloon to 345 billion units, of which Malaysia aims to export at 65% of that demand (i.e. 224 billion units). Malaysian glove companies produced 187 billion units in 2019 alone. The 20% increase in demand has driven glove manufacturers to scale up their production lines. In light of the labour Movement Control Order (MCO) imposed during COVID-19, companies which have already invested in automation and digitalisation are now reaping their rewards. When it comes to innovation, it does not necessarily need to be a ground-breaking solution, but an improvement of the current operations. And this is the point I’d like to make with companies who foresee the benefit of undertaking digital transformation as part of their Business-As-Usual process.

The next story I’d like to share is the success story of StoreHub—a point-of-sale platform service provider for F&B customers. When the Malaysian government imposed the MCO, the company anticipated a rise in demand for online delivery. Within 48 hours, StoreHub released Beep Delivery, an online delivery platform that now complements their point-of-sale service offerings. In addition, StoreHub collaborated with other digital and logistics players to establish an online delivery ecosystem for their stakeholders. This is an impressive example of business innovation with the needs of their users at the core.

The last story is on the social enterprise, Biji-biji Initiative. Social enterprises are businesses with social cause at the core of their operating models – and thus being innovative is key to survival. Biji-biji Initiative brings together skills in tech, crafts and hacking with a DIY, open-source ethos to create new products. During the MCO, they re-purposed their operating lines to manufacture personal protection equipment for healthcare frontliners. The process was not without roadblocks, but with support from the online community on open source platforms, the team gathered ideas and created several prototypes in search for the optimal design to manufacture effective PPEs.

Innovation is crucial, even when businesses are doing well and good. It is during the most unexpected times that businesses can innovate challenges into opportunities. In the midst of uncertainty, be agile, adaptive and think outside the box.

Nonetheless, innovation does not come without failure. There could be many factors leading to the workability of an idea – timing, resources and opportunities. Keep an open mind to refine your ideas and keep on trying.

Aside from doubling down on tech and digital innovations, what do firms need to consider to become more profitable and sustainable in the future?

Being profitable and sustainable involve different time horizons and focus areas, but the key is to have an agile business model.

To be profitable
Profitability requires businesses to look at the bottom line and focus on mid-term planning. Businesses can consider creating a flexible cost structure by shifting the cost from fixed to variable, where possible. This gives room for businesses to scale down and reduce cash flow needs while navigating through uncertainty.

Another option to consider is to outsource non-essential business operations. Currently, there are many functions that can be outsourced. This ranges from core business functions such as marketing and human resource to technology services such as SaaS. Through outsourcing, upfront costs can be reduced significantly and businesses can easily scale up their operations when the need arises.

To be sustainable
Business sustainability is still heavily tested in many countries during the COVID-19 lockdown. Despite the world getting more interconnected, natural disasters and black swan events have been known to throw even the most profitable companies out of business.

Building a lean business model is essential for businesses to stay afloat. This would require businesses to continuously optimise their current operations. This is achievable via changing ineffective practices, removing unprofitable products and streamlining redundant processes.

By improving core business activities, a lean business model allows business owners to implement solutions faster and pivot quickly should the need arise. In this aspect, adopting a Kaizen (continuous improvement) culture may promote a sense of accountability and encourage active participation from all levels in business improvements. 

Ultimately, businesses need to have a clear vision of the value they offer to their customers, when innovating. Only through that can businesses understand what really matters and provide the relevant services to consumers that conform to the needs of the operating business environment.