This article first appeared in The Edge Financial Daily on July 17, 2017

KUALA LUMPUR: Small and medium enterprises (SMEs) cannot afford to ignore Industry 4.0 or think it is only relevant to larger companies.

“You may have heard the term, Industry 4.0, bandied about and know that it is roughly linked to things like IoT (Internet of things), big data analytics, advanced robotics [and] artificial intelligence,” said The Edge Communications Sdn Bhd editor-in-chief, Azam Aris, in his opening speech at The Edge SME Forum 2017 in Kuala Lumpur on Saturday.

“You can view this as either a threat or an opportunity but the one thing you cannot do is pretend it’s not going to affect you,” he added.

Business Wise Consulting managing partner Datuk CL Yoon kicked off the forum, talking about the implications of Industry 4.0 to SME owners.

“SME owners need to make sure that their machines are network-enabled and connected to each other, so that their clients can access data from a cloud system. They should always start small and slowly invest in more sophisticated machines and software,” he pointed out.

“For example, SMEs that have old machines do not need to upgrade their machinery as it would require a huge asset investment. They could start small with some modification, such as adding smart sensors to the old machines. These sensors could generate useful data which may help improve operation and production,” Yoon added.

Raju Chellam, Fusionex International vice president of new technologies, pointed out that big data is the key technology Malaysian companies should invest in now.

He said this is because Malaysia has gone pretty far into its digital transformation stage where the Internet penetration rate is high and smartphones have been ingrained into the daily life of its people. The next step, naturally, is to move up the value chain and invest in big data analysis in order to predict market trends and identify business opportunities quickly. This will also allow local companies to connect and compete with the world.

He was speaking on the new technologies Malaysia should bet on. “Instead of guessing when and which sector will be disrupted first when the technology wave takes off here, you should see it as new opportunities you can seize.”

Microsoft Malaysia’s national technology officer, Dr Dzaharudin Mansor, said that SMEs do not really have a choice about whether they want to get on board. In his talk on digital transformation for Industry 4.0, he said, “To remain competitive, they will have to embrace democratised technologies and platforms.

“This is not only limited to machine learning and cloud computing, but also [to] data analytics, artificial intelligence (AI) and Internet of things. Coupled with an innovative mindset, SMEs should be able to compete with even the big players in the years to come.”

IBM’s director of government and regulatory affairs, Hasnul Nadzrin Shah, focused on AI. “The strength of AI is the fact that you are able to actually get an additional brain to help you make decisions. Also, it helps you look at what occurs within a particular ecosystem and find the patterns.

“The danger about correlation is that you may find inherent flaws depending on the data sets that you bring in and here’s where big data comes in. You make better decisions when you have more inputs in your decision-making cycle.”

There is a downside to it, however, the more interconnected the business is, the more vulnerable it becomes.

Chubb Asia Pacific Pte Ltd’s head of financial lines, Stanley Wong, pointed out that companies big and small, must think about the side effects of the interconnected nature of Industry 4.0 where data security breaches can cost millions of ringgit in damages and impact on the reputation of a brand.

“Cybersecurity is an operational risk that every company, big or small, must think about, unless you don’t have a computer, you don’t use mobile phones or own a smart TV.  

“But I don’t see how you can avoid it. Cyberattacks are not something we can predict ... we don’t know when, or which industry or sector will be targeted. We can just think of how we can minimise damage and manage the exposure,” said Wong in his presentation entitled “Cyberattack: is your business at risk?”