Friday 29 Mar 2024
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This article first appeared in Digital Edge, The Edge Malaysia Weekly on February 22, 2021 - February 28, 2021

Migration to the cloud is an essential step in establishing Malaysia as the heart of digital Asean, says Adrian Lim, partner at Ernst & Young Advisory Services Sdn Bhd’s technology consulting practice. 

The cloud computing market has grown tremendously in the region, mainly driven by the fact that it costs less, coupled with the greater awareness of data security and the underlying technology.

According to the Asia Cloud Computing Association’s Cloud Readiness Index, Malaysia ranks No 8 due to its strengths in areas such as connectivity, energy sustainability, data centre risks and business sophistication, says Lim. “The Jendela and Penjana plans that have been put in place by the government should further improve our position in the coming years,” he points out.

Jendela, or the National Digital Network, was announced last September to meet the digital connectivity needs of the people and to prepare the nation for a gradual transition to 5G technology. In June, Penjana, or the National Economic Recovery Plan, was launched to support the country’s economic recovery efforts from the fallout of the Covid-19 pandemic.

The following is an excerpt from the interview with Lim.

Digital Edge: Why is the cloud such a critical element of digital transformation and the economy?

Adrian Lim: The cloud is not so much a technology but a model that enables convenient, on-demand and network access to a shared pool of configurable resources that can be rapidly provisioned and released with minimal management effort or service provider interaction. It is the ‘on-demand’ or ‘pay-per-use’ model that makes cloud computing such a critical element in digital transformation as it enables a cost-effective platform for companies to not only innovate new business models but also drive enterprise resilience. 

In fact, the cloud is rapidly becoming a strategic imperative globally for businesses to become sustainable and agile and to be able to adapt and innovate quickly. A good analogy is this: You depend on electricity to run your company 24/7, so do you invest in multiple substations and generators or do you ‘buy’ electricity from a utility provider? The answer would be the latter as it is unlikely you would wish to undertake such a capital-intensive venture. 

Similarly, cloud computing becomes your ‘utility company’, where you pay for what you utilise and focus on your core business. Today, there are many cloud models available for enterprises, depending on their specific use cases, from the most basic infrastructure-as-a-service to software-as-a-service and even business-as-a-service.

The government has announced its ambition for Malaysia to be the ‘Heart of Digital Asean’ and for digital to contribute RM500 billion or 20% of the country’s GDP by 2025. Under Jendela, connectivity (for example, 5G and fiberisation) will ensure that Malaysia is seen as a ‘cloud-first’ nation, not only from an infrastructure perspective but also in terms of associated policies, standards and best-in-class talent pool.

What are the benefits of adopting the cloud?

According to Bill Gates, ‘innovation is the real driver of progress’. There are also often quoted examples of companies that no longer exist or have lost significant market share, such as Blockbuster, Tower Records, Kodak and many others, due to the lack of innovation. Because of the pandemic, most companies are in a cash-flow preservation or cost-cutting mindset, which potentially limits their ability to invest in innovation. This is where the true benefits of adopting the cloud come in:

1. Platform for innovation and to ‘fail fast, fail better’: Companies can leverage existing cloud platforms to develop prototypes or test hypotheses or use cases prior to production or rollout. For example, a company could load its procurement data into the cloud, run analysis and determine if there are opportunities for optimisation for a defined period of time.

2. Cost-effective ‘building blocks’ that can be deployed quickly with minimal human intervention: Companies can increase productivity via automation, for example, robotics process automation and chatbots, based on a pay-per-use model.

3. Highly scalable and resilient infrastructure: Most cloud providers guarantee their infrastructure can be scaled to handle the additional volume, such as sales spikes for a B2C (business-to-consumer) website, automatically.

4. Faster time to market: By adopting the cloud, companies can quickly launch new products or services. For example, StoreHub was a cloud point of sales (POS) provider that quickly built Beepit to enable delivery services due to the Covid-19 pandemic.

Often organisations find it challenging to decide on the best-suited cloud solutions for their business needs and the service provider to guide them in their cloud transformation strategy. Can you offer some tips on how to approach cloud transformation?

For organisations to fully benefit from their cloud transformation journey, it has to be an organisation-wide agenda, and not an IT or digital agenda. The reason is simple. If you migrate a bad business process to the cloud, it will continue to be a bad business process that just runs ‘faster’. If you ‘lift and shift’ a critical application to the cloud, it could work faster, but it would not achieve the agility of cloud-native apps. In addition, the speed and agility in adopting cloud computing without the required organisational culture change to be innovative will also lead to unrealised expectations.

A successful cloud transformation involves the transformation of enterprise culture, talent upskilling, investment frameworks and technical competencies. At an execution level, enterprises should take a multi-pronged approach and consider the following:

(a) How can migrating to the cloud lower their infrastructure or application costs?

(b)What are the critical components in their technology landscape today that are not cloud-ready or how big is their technical ‘debt’?

(c) What are their existing business processes that are fairly mature or optimised that can be automated by utilising the cloud?

(d) What are their biggest opportunities for revenue increase, cost take-outs or customer experiences that can be enabled by the cloud? How do they incorporate and measure these benefits at the enterprise level?

(e) How fast can they migrate to the cloud, balancing risks and potential business disruptions?

(f) What are their talent gaps, and how do they upskill them sufficiently to drive continuous innovation, automation and cloud-native applications?

The above require an understanding of an enterprise’s current landscape and an ‘outside-in’ perspective to really identify and prioritise the use cases for its cloud transformation. In addition, service providers can assist to fill the talent gaps that enterprises could face in the short term.

What about the private sector and its role and the potential challenges it will face?

The private sector should look at its business strategy and consider how it can leverage both the cloud and digital [tools and services] to not only survive but thrive in this era of the new normal. However, the key challenges remain — do we have the right talent and how do we fund this transformation? Hence, companies should leverage the ecosystem and service providers and take a multi-pronged approach to reduce costs and identify use cases for revenue uplift.

Are you concerned about the availability of talent in Malaysia?

Although we have a strong pool of technical talent such as network engineers and programmers, there is a shortage of cloud, or digital, talent. While there are numerous training programmes or certifications available online, training alone is insufficient. Like in any sport, you have to compete or consistently put your learnings into practice to become competent or an expert in your chosen field. Hence, the talent agenda has to be at the heart of any cloud transformation.

In the immediate term, we can look at developing competency programmes that will provide our talent with the relevant opportunities to put their technical competencies into practice.

Will small and medium enterprises (SMEs) benefit from this or will they fall further behind?

Technologies such as the cloud have, to a large extent, democratised the business landscape. SMEs today have access to the same technologies as Fortune 100 companies, and those that innovate and leverage the cloud should see success.

Public and private sector support for SMEs to upskill and leverage digital or cloud solutions is crucial. Increasingly, we see more companies developing and providing SME-specific cloud solutions at the right price point. In addition, SMEs should leverage the various digitalisation funds made available by the government and its agencies.

Are there particular industries that could benefit from accelerating their cloud adoption journey?

There is no industry that will not benefit from accelerating its cloud adoption journey. Industries that generate significant amounts of data — for example, financial services and manufacturing — or have complex business processes such as logistics would see some of the biggest benefits by accelerating their cloud adoption journey.

There are also examples of businesses, for instance, in the airline and agriculture industries, that have leveraged the cloud to pivot from their primary business to create and accelerate new businesses and business models successfully.

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