Thursday, December 05, 2019

Microsoft study asserts GDP growth reliant on digital overhaul

May 03. 2018
Facebook Twitter

By The Straits Times
Asia News Network
Singapore

2,488 Viewed

Gross domestic product (GDP) in the Asia-Pacific region could add a further US$387 billion by 2021 and grow by an extra 1 per cent annually if its manufacturing sector embraces digital transformation reports a study by Microsoft, in partnership with research firm IDC Asia/Pacific, which surveyed 615 business leaders from the manufacturing sector across 15 markets in the region.

The findings were based on estimates that these leaders provided of the impact of digital transformation on their growth over the past three years, which were then extrapolated to estimate effects on the wider economy.

They do not take into consideration sudden market changes and are based on nominal GDP growth projection from the World Bank, said IDC Asia/Pacific.

Digital transformation for manufacturers is about going beyond simply automating, optimising and improving productivity but also "re-imagining how an organisation can bring together people, data and processes to create value for their customers and maintain a competitive advantage in a digital-first world", said the research firm.

Other findings noted that such digital transformation could lead to better 'bottom-line' performances, thanks to gains in productivity, increases in profit margins and cost reduction. Long-term benefits include revenue from new products and services and improved customer advocacy.

"It is no surprise that businesses are still focused on tracking process effectiveness as the manufacturing sector is one that relies heavily on time-to-market strategies for first-mover advantage," said Mr Scott Hunter, regional business lead for manufacturing at Microsoft Asia.

"However, as manufacturing organisations realise the value of data in the long term, they are likely to unlock the potential of digital transformation in helping them create new business models."

The survey noted that 44 per cent of respondents said tracking how data is being used as a capital asset counts as one of their key performance indicators used to measure digital transformation currently.

But the survey also found that leaders in the manufacturing sector are less likely to have an allocated budget set aside for digital transformation as part of their existing profit and loss statement.

Other barriers identified include the lack of skills and resources - with respondents saying they expect 85 per cent of jobs within the sector to be transformed in the next three years - cyber security threats, and a "siloed and resistant culture".

The study recommended a three-pronged strategy for companies seeking digital change: investing in big data analytics and Internet solutions to manage structured and unstructured data; optimising processes using big data analytics; and using machine learning and artificial intelligence to create new value chains and services.

Tags:
Facebook Twitter
More in News
Editor’s Picks
wmg-logo
Top News
wmg-logo