KPMG shows way to turn disruption into opportunity
TO TURN “digital disruption” into opportunity, companies must focus on customers’ needs and the government should ensure light regulation, KPMG’s Asia-Pacific chairman said yesterday.
“We’re living in a huge industrial revolution. For businesses, this is an opportunity for the next 200 years,” Tham Sai Choy said during an executive-briefing session held by the consulting firm in Bangkok.
While digital disruption can be devastating to incumbents, Tham said companies could thrive at disruptive times if they understood the needs of their existing and future customers.
“Loss of opportunity will be if you focus [solely] on doing existing business better. Opportunity is [focusing] on new customers’ needs,” he added.
Digitisation will help unlock many opportunities as companies can turn data into customer knowledge, which is a true form of intellectual property, but to tap new opportunity, companies also need an ability to “uberise”, or to disrupt themselves, he stressed.
“If you don’t break the rules, you can’t innovate. If you don’t innovate, you can’t disrupt. And someone else will disrupt you because they don’t have the same rules that you have,” the executive explained.
Tham said an electricity company, for example, could think about competing with Google, which essentially sells advertisements to shops based on its knowledge about their customers, as such a utility business knows when its customers leave their homes.
“If you are an electricity company, you have the most customers in the world. Why don’t you think about competing with Google? Google sells ads. It tries to predict what your needs are and get you to go to shops, and it makes these shops pay for that,” he told the executive briefing.
Winid Silamongkol, chief executive officer of KPMG in Thailand, Myanmar and Laos, said that while Thai organisations were aware of the digital-disruption trend, their actual intention to respond to and resolve issues such as cyber-crime was a bit behind that of their peers in the region, especially in Malaysia and Singapore.
“Another thing that we have noticed is regulations, which to some extent are a bit slower to accommodate changes in the business environment. The Computer Act is one example that we still need to revisit, not only because of cyber-crime, but also to de-bottleneck regulations in order to pave the way for businesses to operate in a more liquid way,” he said.
While the Bank of Thailand has already set up a working team to look into the regulatory issue to accommodate fintech (financial technology) and other innovative financial instruments, there is still a gap between that and the execution stage when compared to neighbouring countries, the CEO said.
“Governments are good at regulating. Innovations happen when regulation is light. It is [in the context of] the least regulation that you get the chance to innovate,” Tham added.
Based on the past record of disruption in the music, media and travel industries, in which newcomers have grown from nothing to take dominant market positions from incumbents within a 10-year period, KPMG believes companies in other industries will have a similar time frame to transform themselves into successful businesses in disruptive times.
Meanwhile, Winid said KPMG would bring in IBM Watson’s artificial intelligence and cognitive computing technology for use in its auditing work in Thailand by the end of this year, in order to help improve the quality of its auditing services in the Kingdom.
This follows IBM Watson’s successful deployment by the firm in the US, Europe and other countries in Asia, he added, stressing that there would however be no job reductions among its Thai staff because of the move.
