Asia Pacific region organizations must accelerate the digital transformation journey

Microsoft Digital Transformation Study 2

By 2021, digital transformation will add an estimated US$10 billion to Malaysia’s GDP, and increase the growth rate by 0.6% annually, according to a new business study released today. The research, “Unlocking the Economic Impact of Digital Transformation in Asia Pacific ”, was produced by Microsoft in partnership with IDC Asia/Pacific.

The study predicts a dramatic acceleration in the pace of digital transformation across Asia’s economies. In 2017, about 7% of Malaysia’s GDP was derived from digital products and services created directly through the use of digital technologies, such as mobility, cloud, Internet of Things (IoT), and artificial intelligence (AI).


“Malaysia is clearly on the digital transformation fast track. Within the next four years, we expect to see approximately 45% of Malaysia’s GDP to be derived from digital products and services,” said K Raman, Managing Director of Microsoft Malaysia. “At the same time, organizations in Asia Pacific are increasingly deploying emerging technologies such as artificial intelligence as part of their digital transformation initiatives, and that will accelerate growth even further.”

The survey conducted with 1,560 business decision makers in mid and large-sized organizations across 15 economies in the region highlights the rapid impact and widespread disruption that digital transformation is having on traditional business models.

The study, which included 100 respondents from Malaysia, identified five key benefits to their bottom line from digital transformation:

According to the research findings, business leaders expect to see more than 20% improvements in those key areas by 2020, with the biggest jump expected in customer advocacy.

Digital Leaders in Asia Pacific to Gain Lion’s Share of Economic Opportunities

The study indicates that while 85% of organizations in Malaysia are in the midst of their digital transformation journey, only 7% in the entire region can be classified as Leaders. These are organizations that have full or progressing digital transformation strategies, with at least a third of their revenue derived from digital products and services. In addition, these companies are seeing between 20 – 30% improvements in benefits across various business areas from their initiatives.

The study indicates that Leaders experience double the benefits of Followers, and these improvements will be more pronounced by 2020. Almost half of Leaders (48%) have a full digital transformation strategy in place.

“The pace of digital transformation is accelerating, and IDC expects that by 2021, at least 48% of Southeast Asia’s GDP will be derived from digital products and services, with growth in every industry driven by digitally enhanced offerings, operations and relationships. The study shows Leaders seeing double the benefits of Followers, with improvements in productivity, cost reductions, and customer advocacy. To remain competitive, organizations must establish new metrics, realign organization structures, and re-architect their technology platform,” said Daniel-Zoe Jimenez, Research Director Digital Transformation Practice Lead, IDC Asia/Pacific.

Digital Transformation in Malaysia Will Ultimately Benefit Citizens

According to the business leaders surveyed, digital transformation will bring about these top benefits to society:

  • Potential increment to personal income through freelance and digital work
  • Creation of more higher value jobs
  • Increased educational and training opportunities
  • Smarter, safer and more efficient cities

Respondents in Malaysia felt that 96% of jobs will be transformed in the next three years due to digital transformation, and more than half of the jobs in the market today will be redeployed to higher value roles or reskilled to meet the needs of the digital age.

“The rise of digital transformation in Asia Pacific economies will affect the labour market where many types of jobs will evolve and change. What is encouraging is that 76% of the study’s respondents are confident that their young professionals already have future-ready skills that will help them transition to new roles. Governments and organizations should still focus on reskilling and upskilling, because continuous learning will be important in ensuring a successful workforce transformation for the digital age,” said K Raman.

In Malaysia, Microsoft has been empowering the digital transformation journey of the nation by providing cutting-edge technology to many leading organisations including primary healthcare provider, BP Healthcare.

Doctor2U, its on-demand healthcare app which is built on Microsoft Azure and Microsoft Bot Framework, aims to create an entire healthcare ecosystem a single platform. The app features Doctor House Call service that brings a doctor to your doorstep within 60 minutes, video call or Live Chat with doctors, pharmacists and nutritionists for free, as well as medication delivery services, teleradiology platform and hospital information system, among others. As a result, Doctor2U has set themselves as a digital transformation leader by empowering clinicians, patients and care teams, effectively reducing delay and waiting time by 54%.

Riding the Wave of Digital Transformation

Organizations in Asia Pacific need to accelerate their digital transformation journey to reap the full benefits of their initiatives, and to address the invisible revolution brought about the mass adoption of AI.

More importantly, companies need to focus on capitalizing their own data in order to gain new market insights, create new digital products and services, and monetize data through data sharing securely, and in collaboration with its ecosystem.