The Nikkei Asian Review hosted its annual Nikkei Asia300 Summit in Singapore on Jan. 18. Exploring the topic of "Managing disruptive innovation," influential business leaders from across the region and experts from around the world discussed the need to cope with digital transformation and many other challenges facing companies across a range of industries.
SINGAPORE Whether they are manufacturers or software providers, companies must start transforming themselves more rapidly if they hope to survive the fourth industrial revolution. And to do that, they will need help.
That was the message from leaders of Asian companies speaking at the Nikkei Asia300 Summit held in Singapore. Digital transformation is so complex, they said, companies will need to work hand-in-hand with external partners, startups, research institutions and even their own customers.
Vincent Chong, president and CEO of Singapore Technologies Engineering, said collaborating with an outside partner with expertise is crucial. "Businesses are being challenged to solve problems which are multifaceted and complex," Chong said. Speaking about ST Engineering's autonomous vehicle project, which the company sees as one of its future growth businesses, Chong said: "Look at ... the map and all the technology components we have to put together. Many of them require collaboration because you just don't have expertise."
The second-largest defense equipment maker in Asia by market capitalization, ST Engineering is 51%-owned by Temasek Holdings, the Singaporean state investment company. In addition to autonomous vehicles, the company is also pushing to expand into such areas as cybersecurity and robotics for commercial use.
Chong said ST Engineering has set up a cybersecurity laboratory at Singapore University of Technology and Design. "We can't do [it] on our own, so we started a corporate laboratory with SUTD for data analytic solutions," he explained.
Swapan Johri, corporate vice president and head of APAC business at Indian information technology company HCL Technologies, stressed the growing importance of being agile in the digital age. "We are seeing customers investing in our software development centers," Johri said.
Businesses also have to be flexible when it comes to working with other companies if they are to compete today, he said, adding that the classic "waterfall" approach to software development "is no longer possible." Describing today's development process, Johri said there is a wealth of interaction between customers, sales teams and software developers, with improvements made "almost live."
"There is no question about whether ... businesses need to transform. The question really is about whether you transform in parts or in whole, and the speed of transformation," Johri added.
One of the biggest hurdles to transformation, according to Johri, is legacy. In addition to the legacies of technology and business processes, there is also the legacy of mindset. This is "the biggest challenge," he said, because it is tough to persuade people to think differently.
Malaysia's Top Glove is also feeling the pressure to transform itself, despite its position as the world's largest rubber glove maker. "Business is very competitive. We must use advanced technology systems -- digitalization, computerization [and] automation," Executive Chairman Lim Wee Chai said in his speech. "[It is] just like in the war game. We must use the latest, most advanced weapon."
The 60-year-old company founder emphasized the importance of automation for leaner factory operations. "With automation, you don't need a light [in the factory]," he said. "Thirty years ago, we had only one production line. To produce 5,000 [gloves] an hour, we needed 100 people. Today, to produce 30,000 gloves an hour, we need 20 people."
Lim also stressed the importance of speed. He said that in the past, a large company with abundant capital could beat out a small contender, likening it to a big fish eating a little one. "But today ... even if you are big, if you are slow, you will not be able to compete."
When it comes to expanding a company's technological reach, mergers and acquisitions are often an appealing option. ST Engineering demonstrated this with its acquisition of Pennsylvania-based Aethon, which makes autonomous mobile robots that are already used in 140 hospitals in the U.S. Chong sees huge potential for the robot in the manufacturing and hospitality industries, too.
But M&As are not for everyone. HCL Technologies chose to create its latest automation framework on its own, in part to protect its intellectual property. "So much new technologies [are] coming into play in building solutions and providing services, it is important we also are at the same place," Johri said.