Monday, July 22, 2019

How family businesses can smarten up

Feb 02. 2019
Verena Siow
Verena Siow
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By Verena Siow
Special to The Nation

9,927 Viewed

According to physicists and scientists, the speed at which we think is 193,121 metres per second. Imagine the opportunities that could abound if a business was able to move and evolve as fast as the speed of thought. Being an ultra-fast-moving business means no longer playing the catch-up game but being on par with disruptors in terms of innovation or new products, or even being ahead.

Given the rapid pace of digital disruption across almost every industry, small and medium-sized businesses, especially family-owned businesses, tend to be the most vulnerable. Furthermore, they are also ambitious. According to “Planning for Prosperity”, an SAP-sponsored study by The Economist Intelligence Unit, family businesses in Thailand intend to expand into new markets and launch new products in the next three years.

It thus requires them to find out how to move as fast as their disruptors, at the speed of thought, and the only way to do this is to build agility and intelligence into the enterprise. In short, they need to become an intelligent enterprise, which deploys automation and leverages intelligence to better run business.

How can intelligence be built into a business? Let me illustrate with an analogy.

Intelligence in a child begins with processing signals in the environment. For example, when the child touches hot water and immediately yanks his or her hand away. Such incidents become embedded in memory and the child starts to store up “patterns of response” to specific scenarios. As the child receives formal learning via parents and teachers, he or she can start to respond to complex situations. Eventually, as maturity sets in, the child handles situations independently and moves toward a model of unsupervised learning to respond to scenarios not trained for.

In a similar way, intelligence in an enterprise can be cultivated.

An enterprise will encounter negative incidents that it needs to learn from – for example, a breakdown that disrupts the entire supply chain. Typically, isolated operational events such as these get masked within the layering of corporate reports. The impact of the single operational event that occurred is practically untraceable. In the absence of being able to trace the event, response across the enterprise makes it impossible for the systems to learn from this and mitigate future repeat occurrences.

To kick-start the transformation process, businesses need to start integrating devices and systems across a single platform that is connected to the system of records, which affords a full view of real-time data across all levels. Only then can the business efficiently monitor the propagation of the incident’s impact across the enterprise.

Analysing the impact

Real-time embedded insights at each process step can help quantify the impact of the incident and make it possible to analyse the impact across the value chain including the impact on financial performance.

Finally, the accuracy of the response can be increased with artificial intelligence. Technology is propelling the classification of the images, making machines more human-like with the sense of vision. With advances in natural language processing, machines will soon be able to communicate the optimum response proactively.

The outcome? Faster output in leapfrogging the typical productivity cycle, speeding up the acquisition of new skills sets by employees, gaining momentum through consolidation and disruption, and delivering an impressive customer experience. An intelligent enterprise delivers on many fronts including time savings, productivity gains and reduction in operational costs.

What’s positive is that family businesses in Thailand already know what they need to do. Our “Planning for Prosperity” study reveals that family businesses in Thailand are among the most positive in the region, especially towards their capabilities to deploy new technology such as artificial intelligence and machine learning.

All of this bodes well for the future. Propelled by need, ambition and drive, we fully expect Thailand family businesses to lead the way in becoming intelligent enterprises that deliver prompt and satisfactory customer experiences.

Verena Siow is managing director of SAP Indochina, a provider of enterprise application software.

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