Businesses in Singapore Remain Confident about Digital Transformation, but Worry about Progress with Digital Technology
- Competitors are driving 3 in 4 organizations to adopt digital transformation, followed by customers
- 1 in 4 organizations have experienced a failed digital project in the last two years - at an average cost of SGD788,354 (€483,534), which is lower than the global average cost of SGD904,872 (€555,000)
- More than two-thirds (68 percent) of the respondents in Singapore admit a digital skills shortage, with 94 percent believing that Artificial Intelligence will transform the skills needed internally
- 74 percent say shadow digital projects are the only way parts of the organization can complete meaningful innovation
- 80 percent of business leaders pointed to big data and analytics as being most important to their financial success, while 74 percent cited that cybersecurity systems were most crucial to operational success over the next decade
Business leaders in Singapore, among the respondents surveyed, proved to be highly confident when it comes to digital transformation. Fewer than half of Singapore businesses said that the fear of failure seriously hindered their organizations’ digital transformation initiatives, while nearly 2 in 3 business leaders said that digital is creating entirely new business processes and functions that are entirely digital-led – the highest among all countries surveyed.
Mr. Wong Heng Chew, Country President, Fujitsu Singapore, comments: “Technology is not the only influencing factor in achieving digital strategies, and companies in Singapore have caught on to this, with close to half (48 percent) of them saying that Action is the most important factor in achieving their digital strategy. Digital transformation is firmly integrated into Singapore’s business culture, and the majority agree that this goes beyond creating new business models and revenue sources, to include the changing of business processes. Co-creation remains a strong influence on businesses as well. However, there is still much work to do, with the recognition of a distinct lack of digital skills within the organizations, and the concern that slow progress in digital technology will cause them to lose customers to their competitors.”
Key Highlights for Singapore
Realizing that digital transformation is about much more than technology alone, the research commissioned by Fujitsu examines how businesses perform against the four strategic elements required to digitally transform: People, Actions, Collaboration and Technology (PACT).
In Singapore, 1 in 4 organizations have experienced a failed digital project in the last two years. While this is consistent with global trends, the average cost of failed projects locally was lower at SGD788,354 (€483,534) , compared to the global average cost of SGD904,872 (€555,000).
More than two-thirds (68 percent) of the respondents admit a digital skills shortage. 74 percent of businesses say shadow digital projects are the only way parts of the organization can complete meaningful innovation, while 92 percent say that their customers expect them to be more digital.
Local organizations generally recognize the importance of digital transformation with majority of their projects having either been delivered or are in progress. 46 percent of business leaders have already implemented transformation projects with outcomes delivered, while 40 percent say they are in the process of implementing digital transformation projects. For firms, the biggest external factor driving transformation was competitors (76 percent), while customers were a close second (68 percent). However, businesses continue to face challenges across the four pillars of PACT – People, Actions, Collaboration and Technology.
Business leaders recognize the role of digital skills, upskilling their staff through digital training program, and attracting the right digitally-native talent. When considering their approach to the people involved in digital transformation, the vast majority of business leaders (92 percent) are taking steps to increase their access to digital expertise, with 68 percent admitting there is a clear lack of digital skills within their organization.
Looking to the future, finding and nurturing talent with the right skillsets will continue to be a key business concern. 98 percent of the respondents in Singapore agree that upskilling existing staff will be vital to success in the next three years. In addition, 94 percent saw that artificial intelligence will transform the skills needed internally by 2020.
Survey results showed that Singapore is the most confident country in believing that digital transformation is creating entirely new business processes and functions that are digitally led. Almost all Singapore business leaders agree that their business has a clearly defined digital strategy (94 percent). 90 percent are confident that the rest of the business knows what their overall strategy is while 92 percent say that the leadership team is involved in the planning of all digital transformation projects. However, two in three organizations focus too much on technological change during transformation, rather than the skills, processes and behaviors that must support it. 72 percent of business leaders here say that silos within their organization seriously hinder the ability to achieve their digital strategy, which is similar to sentiment globally.
Shadow digital projects remain a prevalent issue in Singapore. 76 percent of respondents say that digital transformation projects often undertaken are not linked to the overarching strategy, while 74 percent say that shadow digital projects are the only way that parts of the organization can complete meaningful innovation. While the majority (55 percent) say that the cost of failed digital transformation projects has discouraged their organizations from pursuing them in the future, the sentiment is still better than the global average (66 percent).
Co-creation remains a strong influence in Singapore, with over two thirds of businesses looking to undertake co-creation projects. Most of these partnerships have been formed with technology experts (77 percent), followed by existing customers (59 percent) and start-ups (56 percent). All three findings are ranked above the global mean.
Over three quarters (76 percent) say they would be willing to share sensitive information such as business plans and project pipelines with an external partner as part of a co-creation project. However 72 percent admit that a lack of success in a short timeframe would quickly put an end to strategic partnerships.
Technology is also changing the way businesses in Singapore operate. Business leaders planned to implement digital technologies such as cyber security solutions (76 percent), big data and analytics (72 percent) and cloud computing (66 percent) in the next 12 months. In the longer term, business leaders pointed to big data and analytics as being most important to their financial success (80 percent), while cybersecurity systems were most crucial to organizational success (74 percent) over the next ten years.
There is a lack of optimism when it comes to businesses’ progress with digital technologies, more so in Singapore than globally. 92 percent admit that their customers expect them to be more digital, while 60 percent feel that they are behind their competitors in using digital to deliver for their customers. The majority (70 percent) believe that digital transformation in their sector will cause them to lose customers relative to their competitors.
While it was unanimous that technology is creating a fast-moving business landscape, over two-thirds (70 percent) are concerned about their organizations’ ability to adapt to digital technologies such as artificial intelligence. 82 percent conclude that it was impossible to guess who their closest competitors would be in ten years.
Notes to editors
Fujitsu’s “The Digital Transformation PACT” report
This quantitative research was carried out in July and August 2017 by independent research company Censuswide. 1,625 business decision makers were surveyed within mid to large sized businesses across public sector, financial services, retail and manufacturing. All respondents had either already delivered a digital transformation project or had expressed an interest in doing so in the future.
Survey sample size per country:
- Australia: 153
- China: 150
- Finland and Sweden: 150
- France: 150
- Germany: 151
- Hong Kong: 50
- Ireland: 20
- Italy: 150
- Japan: 150
- Singapore: 50
- Spain: 151
- United Kingdom: 150
- United States: 150
Online resources for Singapore
Fujitsu is the leading Japanese information and communication technology (ICT) company, offering a full range of technology products, solutions, and services. Approximately 155,000 Fujitsu people support customers in more than 100 countries. We use our experience and the power of ICT to shape the future of society with our customers. Fujitsu Limited (TSE: 6702) reported consolidated revenues of 4.5 trillion yen (US $40 billion) for the fiscal year ended March 31, 2017. For more information, please see http://www.fujitsu.com.
About Fujitsu Asia
Fujitsu Asia was established in Singapore in 1997 to provide leadership in business development, technology innovation and customer support as regional headquarters for the Fujitsu group of companies in ASEAN and was subsequently established as the Asia region headquarters in 2014. Building on Fujitsu’s three decades of experience in the region and with a pool of highly skilled engineering talent, Fujitsu Asia is dedicated to providing comprehensive integrated IT-based business solutions that deliver tangible business value and enable customers to meet the challenges of the new global economy. Fujitsu Asia is a wholly owned subsidiary of Tokyo-based Fujitsu Limited (TSE:6702), a leading provider of IT-based business solutions for the global marketplace. For details, please visit: http://www.fujitsu.com/sg/.
Date: 20 February, 2018