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CISCO: Malaysian SMBs Embracing Digitalisation at a Faster Pace

According to Cisco’s 2020 Asia Pacific Digital Maturity Study, Malaysian SMBs have now leapt into the second stage of digital maturity. There are four stages in which digital maturity is measured. The first being digital indifferent followed by a digital observer, digital challenger and digital native. Malaysia is currently in the digital observer stage, following its increased investments by businesses in technology.

Interestingly, Albert Chai, Cisco Malaysia Country Manager pointed out that while Malaysia has improved in its ranking, the country is still not growing and expanding as fast as it should. In fact, Thailand has overtaken Malaysia in the rankings with Singapore leading the race, by some way. While all countries in the study are still in the digital observer stage, Albert believes Malaysia has got the potential to reach the next level of maturity in the next three years.

The study highlighted that digitisation of SMBs could add up USD$30 billion to the Malaysian GDP by 2024. As such, organisations embarking on their digital transformation journey are looking to deliver more services and new products. Compared to 2019, SMBs realise the importance and the need to bring new services and products to meet the growing customer needs and also remain relevant in the competition.

SMBs are also focused on building their IT infrastructure for digital transformation. 32% of organisations are still looking to upgrade their legacy hardware and software infrastructure followed by investments in security and cloud services.  

“Cloud is a key technology SMBs will embark on. This year, their focus is on hardware and software. A lot of businesses realised that they went to the cloud without the full infrastructure. The fundamental connectivity must be in place for the cloud for successful cloud implementation. The realisation for this in the last six months showed the importance of updating and upgrading their hardware and software”, said Albert.

Among the fastest-growing industries in Malaysia included the services and retail industry. Albert said these industries are not only seeing increased demand and growth but are now also competing to offer better services to ensure they can maintain their efficiency. Local manufacturers are also looking to digitise to meet the increasing demand for their products. This is slightly different from other countries where healthcare and education are seeing faster digital growth.

At the same time, Albert also explained that SMBs need the right help in rightsizing digital technologies to drive growth. This is where it’s key for businesses to have the right technology partner in their transformation journey.

“Businesses have got to think long term. You want a partnership and not a partner. They need to know where your business is going and you need to know where they are going to as well. Are they in for the long term? Have a partner that can provide all the access needed. You need to understand what the technology can do for your organisation”, said Albert.

While businesses may want to avoid vendor lock-in, Albert added that there are advantages and disadvantages for this. Businesses have to look at both options and make the right decisions. He also said that while most businesses want to expand their technology with the right technology partner, the shortage of skills followed by budget and a lack of a digital roadmap and mindset are some of the struggles that are slowing them down.

To deal with this, Cisco has a partnership with the government in training programs with over 80,000 graduates in the last 20 years in Malaysia alone. Apart from tech training, Cisco also provides entrepreneurship and other training services.

“The mindset and skillset will be key for Malaysian businesses. There is still a lot to be done. Malaysia has to start building on automation and focus on digitalisation. Some industries are doing this and will be faster. Hopefully, in the next three years, we can reach the next stage of digital maturity”, concluded Albert.

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