Businesses in Singapore Remain Confident about Digital Transformation, but Worry about Progress with Digital Technology

Businesses in
Singapore Remain Confident about Digital Transformation, but Worry about
Progress with Digital Technology

News facts:

·         Competitors are driving 3 in 4 organizations to
adopt digital transformation, followed by customers

·         1 in 4 organizations
have experienced a failed digital project in the last two years – at an average
cost of SGD788,354 (€483,534), which is lower than the global average cost of
SGD904,872 (€555,000)

·         More than two-thirds (68
percent) of the respondents in Singapore admit a digital skills shortage, with
94 percent believing that Artificial Intelligence will transform the skills
needed internally

·         74 percent say shadow
digital projects are the only way parts of the organization can complete
meaningful innovation

·         80 percent of business
leaders pointed to big data and analytics as being most important to their
financial success, while 74 percent cited that cybersecurity systems were most
crucial to operational success over the next decade

Singapore, February 20, 2018 – Although businesses
recognize the importance of digital transformation, organizations worldwide are
struggling to balance the elements needed to deliver on digital. Fujitsu’s
latest report, the Digital Transformation
PACT,
which surveyed 1,625 global business leaders found that one in three (33%) has
canceled a project in the last two years at a cost of SGD689,659 (€423,000), while one in four
(28%) has experienced a failed project costing SGD904,872(€555,000). 82 percent
of businesses say that their customers expect them to be more digital, while 71
percent believe that they are behind their competitors. Ultimately, two in
three (66%) believe that they will lose customers relative to their competitors
as a result of digital transformation.

Business leaders in
Singapore, among the respondents surveyed, proved to be highly confident when
it comes to digital transformation. Fewer than half of Singapore businesses
said that the fear of failure seriously hindered their organizations’ digital
transformation initiatives, while nearly 2 in 3 business leaders said that
digital is creating entirely new business processes and functions that are
entirely digital-led – the highest among all countries surveyed.

Mr Wong Heng Chew,
Country President, Fujitsu Singapore, comments: “Technology is not the only
influencing factor in achieving digital strategies, and companies in Singapore
have caught on to this, with close to half (48 percent) of them saying that Action
is the most important factor in achieving their digital strategy. Digital
transformation is firmly integrated into Singapore’s business culture, and the
majority agree that this goes beyond creating new business models and revenue
sources, to include the changing of business processes. Co-creation remains a
strong influence on businesses as well. However, there is still much work to
do, with the recognition of a distinct lack of digital skills within the
organizations, and the concern that slow progress in digital technology will
cause them to lose customers to their competitors.”

Key Highlights for
Singapore

Realizing that digital
transformation is about much more than technology alone, the research
commissioned by Fujitsu examines how businesses perform against the four
strategic elements required to digitally transform: People, Actions,
Collaboration and Technology (PACT).

In Singapore, 1 in 4
organizations have experienced a failed digital project in the last two years.
While this is consistent with global trends, the average cost of failed
projects locally was lower at SGD788,354 (€483,534) , compared to the
global average cost of SGD904,872(€555,000).

More than two-thirds
(68 percent) of the respondents admit a digital skills shortage. 74 percent of
businesses say shadow digital projects are the only way parts of the
organization can complete meaningful innovation, while 92 percent say that
their customers expect them to be more digital.

Local organizations
generally recognize the importance of digital transformation with majority of
their projects having either been delivered or are in progress. 46 percent of
business leaders have already implemented transformation projects with outcomes
delivered, while 40 percent say they are in the process of implementing digital
transformation projects. For firms, the biggest external factor driving
transformation was competitors (76 percent), while customers were a close
second (68 percent). However, businesses continue to face challenges across the
four pillars of PACT – People, Actions, Collaboration and Technology.

     

–          People

Business leaders
recognize the role of digital skills, upskilling their staff through digital
training programmes, and attracting the right digitally-native talent. When
considering their approach to the people involved in digital transformation,
the vast majority of business leaders (92 percent) are taking steps to increase
their access to digital expertise, with 68 percent admitting there is a clear
lack of digital skills within their organization.

Looking to the future,
finding and nurturing talent with the right skillsets will continue to be a key
business concern. 98 percent of the respondents in Singapore agree that
upskilling existing staff will be vital to success in the next three years. In
addition, 94 percent saw that artificial intelligence will transform the skills
needed internally by 2020.

–          Actions

Survey results showed
that Singapore is the most confident country in believing that digital
transformation is creating entirely new business processes and functions that
are digitally led. Almost all Singapore business leaders agree that their
business has a clearly defined digital strategy (94 percent). 90 percent are
confident that the rest of the business knows what their overall strategy is
while 92 percent say that the leadership team is involved in the planning of
all digital transformation projects. However, two in three organizations focus
too much on technological change during transformation, rather than the skills,
processes and behaviors that must support it. 72 percent of business leaders
here say that silos within their organization seriously hinder the ability to
achieve their digital strategy, which is similar to sentiment globally.

Shadow digital
projects remain a prevalent issue in Singapore. 76 percent of respondents say
that digital transformation projects often undertaken are not linked to the
overarching strategy, while 74 percent say that shadow digital projects are the
only way that parts of the organization can complete meaningful innovation.
While the majority (55 percent) say that the cost of failed digital
transformation projects has discouraged their organizations from pursuing them
in the future, the sentiment is still better than the global average (66
percent).

–          Collaboration

Co-creation remains a
strong influence in Singapore, with over two thirds of businesses looking to
undertake co-creation projects. Most of these partnerships have been formed
with technology experts (77 percent), followed by existing customers (59
percent) and start-ups (56 percent). All three findings are ranked above the
global mean.

Over three quarters
(76 percent) say they would be willing to share sensitive information such as
business plans and project pipelines with an external partner as part of a
co-creation project. However 72 percent admit that a lack of success in a short
timeframe would quickly put an end to strategic partnerships.

–          Technology

Technology is also
changing the way businesses in Singapore operate. Business leaders planned to
implement digital technologies such as cyber security solutions (76 percent),
big data and analytics (72 percent) and cloud computing (66 percent) in the
next 12 months. In the longer term, business leaders pointed to big data and
analytics as being most important to their financial success (80 percent),
while cybersecurity systems were most crucial to organizational success (74
percent) over the next ten years.

There is a lack of
optimism when it comes to businesses’ progress with digital technologies, more
so in Singapore than globally. 92 percent admit that their customers expect
them to be more digital, while 60 percent feel that they are behind their
competitors in using digital to deliver for their customers. The majority (70
percent) believe that digital transformation in their sector will cause them to
lose customers relative to their competitors.

While it was unanimous
that technology is creating a fast-moving business landscape, over two-thirds
(70 percent) are concerned about their organizations’ ability to adapt to
digital technologies such as artificial intelligence. 82 percent conclude that
it was impossible to guess who their closest competitors would be in ten
years.

Fujitsu’s “The Digital Transformation PACT”
report

This quantitative research was carried out in
July and August 2017 by independent research company Censuswide. 1,625 business
decision makers were surveyed within mid to large sized businesses across
public sector, financial services, retail and manufacturing. All respondents
had either already delivered a digital transformation project or had expressed
an interest in doing so in the future.

Survey sample size per country:

·          Australia: 153

·          China: 150

·          Finland and Sweden:
150

·          France: 150

·          Germany: 151

·          Hong Kong: 50

·          Ireland: 20

·          Italy: 150

·          Japan: 150

·          Singapore: 50

·          Spain: 151

·          United Kingdom: 150

·          United States: 150

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