SAP Study: ASEAN Enterprises Set Sights On Post-Pandemic Success

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The regional study Digital, resilient, and experience-driven: How enterprises in Southeast Asia can prepare for the new economy reveals that enterprises in Southeast Asia are gaining steady momentum prioritising growth and customer experiences. However, they face significant challenges in the areas of talent attraction and retention, cloud adoption, and gaining insights from data.

Conducted in collaboration with Oxford Economics, the study surveyed 600 senior executives—including 400 from SMEs with less than $500 million in revenue—across Singapore, Malaysia, Thailand, Vietnam, Indonesia, and the Philippines.

 

Forging A New Experience-led Growth Path

As economies begin to identify emerging pockets of growth, enterprises have also continued to adapt with resilience, transforming their operations to meet evolving consumer expectations in a new digital economy.

Enterprises in the region identify customer experience as a strategic imperative for survival and growth, with more than a third (35%) saying service excellence is now their primary source of value and differentiation. Positive customer experiences have also become the foremost strategic consideration for businesses in the region, with key factors being personalisation for the customer (59%), providing high-quality products and/or services (55%), ensuring data protection and privacy (53%) and offering competitive pricing (51%).

“Having gotten a foothold on the pandemic’s disruption, businesses across Southeast Asia are at a crucial transformative point to achieve long-term competitive growth,” said Verena Siow, President and Managing Director, SAP South East Asia. “Regardless of industry, businesses must embrace true business transformation into intelligent enterprises while keeping in mind that customers are the lifeline to survival and sustainable growth,” Siow added.

Set against their larger counterparts, SMEs in the region find it increasingly challenging to keep pace with uncertainties and external challenges in the current business environment. SMEs surveyed cite difficulty adapting to a rapidly changing marketplace (40%, vs. 29% of larger enterprises), keeping up with changing customer wants and needs (38% vs. 43%), and difficulty retaining customers or driving repeat business (34% vs 30%) as top challenges to meeting their strategic priorities.

In the Philippines, large enterprises and SMEs have also taken steps to improve experience management in their operations. The study showed that companies’ top three primary strategic priorities over the next three years is improving customer experience (53%), improving employee experience (42%), and attracting new customers (36%).

SMEs and large enterprises in the country believe that customer experience can help them stand out from the rest of the pack. They seek to improve the experience of their customers, with two-thirds (42%) of enterprises see service excellence, along with product excellence (18%) and Innovation (9%) as their organization’s three primary sources of value and differentiation.

To achieve the growth of Philippine enterprises that they seek in their organization, they started taking steps through digitalization and improve customer experience. The study showed that they started soliciting and acting on the customer feedback (94%) and started improving customer data analytics (85%). They also started investing in user-friendly digital experiences (75%).

 

Becoming Best Run: Hurdles to Overcome

As enterprises adapt their operations to overcome both internal and external challenges, many of them recognise technology as an enabler to help drive greater business outcomes.

Automation and digital technologies are most believed to support business goals by increasing process efficiency and reducing error, risk, and cost (56%). This is followed by reducing overhead costs (45%), allowing employees to focus on higher-level business tasks (39%), and increasing productivity through transformation and intelligent process automation (37%).

A deeper dive into the internal challenges to improving customer experiences reveals businesses’ hurdles around gaining visibility over their operations, and the lack of digital tools that help them to track and direct strategic business priorities. Those surveyed cite difficulty competing with larger organisations (50%), lack of technology for analytics (43%), lack of capable and motivated workforce (40%), lack of adequate data (38%), and difficulty scaling for growth (33%).

“In an ever-increasing digital economy, the enterprises that thrive are those that adapt the quickest. There is a strong need to shift mindsets while constantly seeking new ways of working and redesigning processes. It is only by doing so that businesses can find a way that works best and stay ahead of the competition,” explained Siow.

To secure quick growth, enterprises surveyed are employing short-term actions to improve customer experiences, with many investing in user-friendly digital experiences (39% have made this change across the organization), reducing prices (38%) and increasing after-sales maintenance (37%). Yet, just 58% say they have made at least moderate progress towards digital transformation, despite the ability of such tools to grant them insights into opportunities to improve their customer experiences; among SMEs, even fewer—just 45%—say they have made moderate progress towards transformation.

Notwithstanding these challenges, SMEs see their nimbleness and ability to build trust with customers as their inherent competitive advantage against larger competitors, which can give them the strong foundation they need to securely experiment with new technologies and business models.

“Flexibility is a crucial ingredient of success today and through our new RISE with SAP initiative, we are confident customers will get the flexibility required to accelerate the speed of digital transformation and excel in the diverse environment they operate in – wherever they are on the digitalisation spectrum,” concluded Siow.

Of the findings, SAP Philippines Managing Director Edler Panlilio adds, “It is satisfying to note how the study revealed that many businesses in the Philippines continue to make the customer their main priority. In my view, companies who are agile to quickly adapt to customer demands are the ones who will win despite any situation. Business transformation has become a crucial step to continuity for businesses of all sizes, which is why, we have launched Rise with SAP to help companies of all types to holistically transform their business with a fast time to value — at their own speed and terms, regardless of their starting point.”

 

Skilled Talent a Key Engine for Growth

Along with technology, enterprises in the region understand that an engaged workforce will help unlock future growth in a fast-growing digital economy.

Even as enterprises forge ahead towards business recovery, many recognise that their workforce is crucial to driving success. In line with this, businesses surveyed expect moderate growth over next three years in employee productivity (74%); customer loyalty and satisfaction (71%), market share (71%).

However, upskilling talent is cited as the top internal challenge by one in three (35%) of enterprises surveyed to meet strategic goals and the evolving organisational and customer needs. 29% of enterprises face inability to gain insights into the employee.

With talent critical to supporting agility and transformation, and this has seen businesses surveyed take steps to improve employee experience during this time—including streamlining organisational processes (29%), investing in employee training and development (38%), and modifying flexible work policies (25%).

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