Enterprise Technology in ASEAN: 73% Expect Digital Investments to Increase in 2021

AIBP released the full results of our 2020 ASEAN Enterprise Digital Transformation Survey on 26th December 2020, where 664 enterprise stakeholders from Indonesia, Malaysia, Philippines, Thailand and Vietnam gave their inputs.

As we continue to expand our work in helping enterprises with their digital journey, I've drawn out some data that would set the baseline of our 2021 projects in the region.

1. 73% expect an increase in their organisation’s investments in digital technology in 2021. A large majority of respondents (65%) identified Big Data Analytics (BDA) as a technology they are planning to invest in over the next 2-4 years. IoT (44%), AI/ML (34%) and RPA (33%) are priorities as well.

This applies especially within the Distribution, Transportation, Logistics & Freight vertical, with 74% of them identifying BDA as the key technology to prioritize (Example: Optimization of vaccine distribution in Malaysia).

2. Within organisations, the Operations function will be the biggest beneficiary of these technology investments, followed by Sales & Marketing and Finance. This is not surprising considering economic contribution from operations intensive industries like manufacturing and supply chain management in ASEAN.

3. Organisations in ASEAN have realistic expectations when it comes to ROI for technology adoption. 43.2% expect returns of 10-25% and 23.8% expect a timeline of more than a year in reaping the benefits of these investments.

(Read: Can Tech Budgets be a predictor of Survivability?)

4. 39.9% of respondents surveyed in 2020 have implemented some form of digital transformation within their companies (an increase from 34.8% in 2019). Only 6.5% (8.7% in 2019) have not yet embarked on digital transformation initiatives.

5. 5G remains an enigma to most enterprises. 73% believe that it will have a lasting effect and will transform how companies will do business, but 55% are still unsure about the costs associated with 5G related projects.

6. Brand Equity: IBM has overtaken Microsoft as the brand most enterprise stakeholders recall when asked about digital transformation technology solution providers.

Within domestic markets, local telecommunications companies are still developing their capabilities within the digitalisation space but are starting from a strong foundation in terms of brand identity. (The hype around 5G must have helped?)

“Our world is increasingly complex, often chaotic, and always fast-flowing. This makes forecasting something between tremendously difficult and actually impossible, with a strong shift toward the latter as timescales get longer.” ― Andrew McAfee, Machine, Platform, Crowd: Harnessing Our Digital Future

We said in December 2019 that ASEAN growth was in a sweet spot and we expected continued growth over most of the upcoming decade. Oh boy were we wrong! In our defense though, not many did better than us in predicting what was about to come. Damn you Covid! As a change (and in showing humility about our apparently inadequate forecasting “skills”) we highlight the responses of over 600 respondents across ASEAN – law of large numbers dictate that they have a much higher probability of getting forecasts right.

Countries throughout ASEAN experienced a debilitating fall in economic activity as strict lockdowns were enforced in Singapore, Philippines, Malaysia, Vietnam, Thailand & Indonesia. ADB (and many others) forecast that it will be a long journey for business-as-usual to resume and 2021 will unlikely show exciting growth.

Having said that, we have a host of activities lined up in 2021 for ASEAN enterprises to tap on - for continued growth along their digital journey. (Judging from our discussions in 2H 2020, I'm still pretty optimistic about the potential of the region when it comes to technology adoption!)

Feel free to comment or ping me your thoughts on the opportunities in this space.