HK’s New Age Challenge: Digital Transformation
The Hong Kong Government has been making strategic moves to strengthen Hong Kong’s position as the leading regional information and communications technology (ICT) hub, especially in the face of competition from neighboring ICT hubs. But the essential challenge now lies in enterprises’ reluctance to transform themselves into a digital organization – with barriers being organizational as much as psychological inertia.
So just how important is digital transformation?
According to McKinsey, digital transformation can boost the bottom line by more than 50% over the next five years for companies that pull all value levers. What’s more, digital leaders are on average growing their digital sales at 2.5 times that of their sector peers. That explains why lacking of a future-proof digital transformation strategy keeps CEOs up at night.
However, the current global situation is not optimal, with only 29% of employees think their companies are digital maturing in terms of process improvement, talent engagement, and business innovation, and the lack of digital strategy from top-down is one of the biggest barriers. This global trend is largely reflective of the situation at the regional Asia-Pacific, including Hong Kong. Business leaders need to realize digital transformation is becoming a necessary investment that cannot be ignored, and inaction would result in their companies becoming obsolete.
Hong Kong in the Spotlight
Mobility, the Internet of Things (IoT), Cloud, and Big Data, these areas are now keys to drive a company’s growth, and will benefit companies in the long run. It’s even more so for data-centric industries such as e-commerce, retail, banking, financial, and the public sectors.
Financial technology (FinTech) has grown rapidly over the last few years, but it now seems that the development in Hong Kong lags behind, especially comparing with other world’s top financial hubs such as London and New York.
The provision of financial services is no longer limited to traditional financial institutions such as banks and insurance companies, as innovative financial services can now been delivered via in all-new creative channels, including mobile and omni-channel payment methods and peer-to-peer lending (P2P). Some studies even predicted that the global investments in FinTech will surge from US$12 billion in 2014 to over US$46 billion in 2020. FSI in Hong Kong hence would need to quicken its digital pace to become capable of engaging customers anytime anywhere, providing a unique customer experience to maintain competitive position.
Retail is another industry that would benefit most from digital transformation. Advanced shopper analytics not only generate user behavior insights for loyalty programs and better inventory control, it can potentially play an instrumental role in the design and development of new products, initial pricing decisions and local demand forecasting. Equally important is the rise of O2O (online-to-offline), omni-channel, mobile commerce which are fast disrupting the industry by redefining and recreating new opportunities for customer engagement and ultimately enhance customer experience. With the mainland China’s e-Commerce growing explosively in recent years, Hong Kong’s retailers have to catch the wave and jump on the bandwagon quickly.
While digital transformation is inevitable for all, it’s not just a technical matter. What’s more important is how business leaders change their mindset and define their long-term digital strategies that seek to transform their employees and business organizations inside and out. Only at this circumstance could the right technologies and ICT infrastructure be deployed as the critical enabler to provide the much needed reliability and agility for companies to evolve, and be truly “digital” at heart.