Leonard Tan
Regional Sales Director, OutSystems Singapore
2020 and Covid-19 had us reimagine how companies should integrate technology in their operations. To succeed in the aftermath of the pandemic, companies must adapt and innovate at speed and scale. Businesses are aware of this and on the move. According to a study by IDC, 28% of organizations in Asia Pacific are in the last stage of digital transformation maturity, up from 18% of organizations in 2019, pre-COVID.
By 2021, a new set of technology challenges had already set into the business landscape.
We will look at 6 technology challenges that executives need to be acquainted with to successfully implement their company’s digital transformation initiatives.
Developing Custom Code Is Hard
The majority of digital transformation projects are created using custom code, but developing such code is difficult, and projects end in failure for several reasons. As consumers demand for personalized experiences and high-quality products, businesses need to keep up by writing vast amounts of code. Simultaneously, cyber-attacks on businesses are on the rise. Developers need to guard against these, while managing and maintaining the code they’ve written – leaving little to no time for creating new products and services.
Skills Gap
Companies are also facing a shortage of developer talent. As the Speed of Change: How Fast Are You report showed, no matter the digital and agility maturity levels, most companies are affected by skill shortages and talent gaps. According to industry experts, Singapore’s efforts toward becoming a Smart Nation has created new employment opportunities in the tech sector – with an estimated 3,000 tech jobs to be created annually in the financial sector alone. But supply is not meeting demand – Singapore is facing the challenge of tech talent shortages.
A 2021 Employment Outlook Survey conducted by ManPowerGroup indicated that six in ten (64%) employers have cited difficulty in hiring. This has been a significant issue since 2018, and has only worsened over time as digitalization picked up. If unaddressed, this will hinder the rapid adoption of the modern IT architectures required for agility.
Digital Transformation – Avoiding Technology Silos Within the Company
Schneider Electric’s IT Department initiated a program in 2016 to undergo digital transformation, aiming to redevelop several legacy apps rapidly without causing significant interference to underlying processes. The company had to do this with a fragmented IT landscape, and numerous duplicate apps that used non-standard architecture and poor security practices. To sidestep the potential disruptions this transformation could bring, Schneider enlisted the help of OutSystems to bridge the gap between business demands and the available IT resources.
What Schneider encountered is a common challenge faced by companies in the initial stages of their digital transformation.
Companies often start small – picking digital transformation projects focusing on areas such as ‘improvement on the customer experience’, which require a specialized tool. Then, another team starts thinking about a back-end project and opts for a different specialized tool. This is followed by some other team deciding to create operational dashboards and choosing yet another specialized tool.
Now, the organization has all these different tools for different functions, a hodgepodge of disparate and fragmented tools that often become entrenched in independent silos. Choosing a more robust technology to handle the different business initiatives from the very beginning would have instead created a system of synergy and cooperation – across all business functions from finance to operations to IT.
Technical Debt
Technical debt is incurred by implementing technologies for short-term benefits, usually the result of prioritizing speed over quality during development, as described above.
According to a recent study, technical debt is estimated to cost businesses $5 trillion in the next 10 years. In other words, every day, $500M+ could be better spent on innovation and on new ideas that could grow the business.
Cloud Computing
Cloud computing offers a myriad of benefits to organizations – from scalability at the push of a button, to accessibility from any device anywhere, to pay-per-usage pricing. It also reduces inefficiencies by eliminating undifferentiated work during the entire development process to free up time to focus on larger business goals. RapidScale claims that 94% of businesses saw an improvement in security after switching to the cloud, and 91% said the cloud makes it easier to meet government compliance requirements.
This is why in Singapore, 30% of organizations from industries like retail and banking have implemented cloud computing to address the need arising from consumer devices, and the Singapore Government has launched G-Cloud to address common computing needs of local government agencies by providing varying levels of security.
However, the process of moving to the cloud isn’t simple, and difficulties or mistakes in migration can disrupt organizations’ future business plans. There are still lingering concerns that executives have to keep an eye on – security and privacy concerns, management complexity, vendor lock-in, performance, and access speed. These are all factors executives need to contemplate when selecting a cloud partner. Having a cloud partner handle these frees up time for developers to work on more important things.
Keeping Up with Constant Technology Evolution
The pandemic has moved nearly all business operations online. However, today, COVID-19 is not the only source of upheaval. The pace of change is accelerating, and new opportunities to disrupt markets are constantly emerging. Companies need to begin considering how they will constantly adapt to social and technological changes, and how these will alter the way people use technology.
A good example is 5G – its ubiquity and the opportunity it brings to create new types of applications in the business space. Industries that rely on field services or distribution can be completely disrupted with 5G. These are not limited to the ICT and finance sectors, but also encompass manufacturing sectors like the semiconductor industry. In August 2021, Minister for Trade and Industry Gan Kim Yong shared that 5G technology for broadband cellular networks will cover half of Singapore by the end of 2022, and expand to cover the whole island by end 2025.
In Singapore, the infrastructure is quickly being laid out for companies. The real challenge for Singapore companies then lies in being able to innovate and keep up with new technological advancements.