In the Asia Vision Series features, we dive into key industry trends and issues with our subject matter experts and visionaries in the region. In this interview, Alfred Siew, a veteran journalist formerly with Singapore broadsheet The Straits Times and founding editor of a popular technology blog, speaks with Ralph Haupter, president of Microsoft Asia, to discuss how the 4th Industrial Revolution is changing the way people work, live and play – and what needs to be done to stay relevant in this increasingly digital world.
Digital transformation and the 4th Industrial Revolution
“I remember experiencing exciting moments when I was sitting under the Christmas tree as a young child – and proving to my parents that I could add three and three to make six on my brand new computer,” says Ralph Haupter, recounting the fond memories from his introduction to computing.
The president of Microsoft Asia has since seen the rise of the personal computer (PC), transforming the world like few could have foreseen in its early days. Now, Haupter believes we are at the cusp of the next big wave – where digital technologies will bring about changes not yet fully fathomable.
The 4th Industrial Revolution is coming in the form of a digital revolution – following similar disruptions by the introduction of the steam engine, electricity, and the micro-processor – and Asia will experience it uniquely, Haupter believes.
“Characterized by a fusion of technologies that is blurring the lines between the physical, digital and biological spheres, this new era will create new services that link people together and enable them to do more,” Haupter notes. “There are 3 key drivers which are making a real difference now – data, cloud and analytics. Each of these, taken individually, are transformative in their own right. But when happening simultaneously, which is what is occurring right now, they create an unstoppable force enabling digital disruption, which will impact all organizations, all industries, all roles.”
There are already many success stories of businesses yielding the benefits of digital transformation – raising their efficiency and productivity. For example, through data and predictive analytics, manufacturers can pre-empt production and maintenance issues, farmers can optimize livestock breeding rates, while hospitals can deliver improved healthcare through enhanced diagnostics.
Those instances are just the tip of the iceberg. The confluence of these technologies is now forcing organizations to rip up existing playbooks and find new opportunities in a disruptive, dynamic business landscape, says Haupter.
As president for Microsoft in the region, Haupter oversees over 40 territories and countries, leading the efforts of more than 17,000 employees and 100,000 partners to empower businesses on their own digital transformation journeys.
“When I travel around Asia, every executive I speak with is interested in what digital transformation could mean for his or her business,” he points out. “They ask the question ‘how can digital technology help me understand what is going on in the industry?’”
One major gamechanger is democratized access to technologies such as cloud computing, Haupter believes. With wider accessibility and scalability, smaller companies now have the potential capabilities to leapfrog bigger, more established players.
“Today, anyone with a credit card can simply sign up for cloud resources. The computing and storage capacity is infinite. Companies that have been building their own data centers for the past decade are almost at a disadvantage now.”
Related to the idea of access is affordability, which is helping to drive the disruption. “When I was growing up in Germany, I remember that the first PC I bought was in fact even more expensive than my first car,” recalls Haupter. “That of course has now changed with the commoditization of computing resources such as storage and cloud. This has also shaped how companies consume and operate these resources, in particular moving from a CAPEX model towards an OPEX model, so they can invest as they grow.”
The growing awareness of the potential of data intelligence and machine learning is another key driver behind the digital revolution.
“We are in an age of data, which is making a huge difference. The potential benefits are almost only limited by how you connect the dots, along with the kind of data that can be collected – be it through devices, infrastructure, vehicles or buildings,” says Haupter.
While there is an awareness of the importance of digital transformation in Asia, that has not yet fully translated into reality, Haupter observes. He cites a recent Microsoft survey, which found that 80 percent of business leaders across the region believe in the need to transform to become a digital business in order to grow. However, only 29 percent had a full digital strategy in place – suggesting the digital transformation race has really only just started in the region.
Riding the digital disruption wave
“Do people have anything to worry about the 4th Industrial Revolution?” Haupter puts forth the rhetorical question.
The president of Microsoft Asia explains that it is matter of perspective – pessimists could of course easily look at the technological revolution and wonder if we may indeed be headed towards a darker future in which robots and automation drive millions of people out of the workforce, widen the income gap, or even worry about privacy and security with the collection of personal information and surveillance.
This would not be the first time that breakthrough technologies will become a catalyst for profound changes in people’s lives. Haupter outlines that there have generally been three major industrial revolutions so far – the invention of steam power, then the introduction of electricity, followed by digital information processing and communications. In each of these periods, we saw dramatic technology innovation creating significant disruption as traditional industries were impacted and old jobs gave way to new occupations.
“Imagine how traffic on roads might have looked like 100 years ago – horse-drawn carriages or rickshaws would have been commonplace. Fast forward to today with the benefit of various advancements, motor vehicles are now the main mode of convenient transport. And of course, along with that, the jobs of those coachmen and rickshaw drivers have been made similarly obsolete”
Disruption is inevitable, and this time with the confluence of various new emerging technologies, there is a sense that the impact will be deeper, swifter and further reaching.
Instead of resisting change, we should see the industrial revolution as a catalyst for new opportunities, as well as improvements in economic and living standards.
“I think this is always part of change where people are anxious, and for the right reason. They want to understand what the disruption actually means for them on a personal level. At this stage, some people may not see the opportunity, the focus may be on jobs lost through new ways of production or doing things, but at the same time we are also actually generating a whole new set of jobs with different criteria,” he adds.
There are numerous examples in Asia. For one, India’s push to make digital and mobile payments mainstream is creating opportunities for small businesses and bringing convenience to those without a bank account or credit card. In a country where over 90 percent of transactions are cash-based, cashless payments are being adopted not just among the digerati, but across vast segments of society, including fishmongers, street stall owners, and taxi drivers.
The same is happening in Indonesia, says Haupter. “I’ve had the opportunity to meet some government leaders in Indonesia recently, and they are working on helping farmers to get the products not only delivered across the country, but to empower them to sell their goods instantly with through virtual market places and digital payment systems,” he points out. “This not only opens up new markets and revenue streams for them, but also enables them to better plan their resources according to market demand.”
Perhaps more important is what societies will be missing out on if they resist embracing innovation or changes from happening – there are positives they would never enjoy.
“Should doctors fear that technology and digital tools are replacing their jobs? On the flipside, predictive analytics enables them to make more accurate diagnosis and deliver telemedicine to patients in remote areas,” says Haupter.
There are many more exciting hints of what the future may hold as people begin to discover how to use and benefit from cloud computing, advanced analytics, artificial intelligence, mobile devices, connected sensors, 3D printing, geolocation, and a host of other related emerging technologies. This is not just to look at old problems in new ways but to also envision capabilities that until recently were impossible to imagine.
Smarter leadership through data intelligence
With all the buzz around digital transformation, one question often pops up: Where do I begin? Or, for those organizations that have decided to incorporate digital technologies to reinvent themselves: What is the end game?
Those are questions that inevitably surface when Haupter meets business leaders and customers, where he focuses on the importance of leadership and culture that is required in an organization’s journey to transform itself.
Without clear leadership from the top, Haupter argues, it will be tough to gain any traction. Neither will there be the necessary follow-through if there is no buy-in or belief among the rank and file of the importance of the mission, he adds.
One way to get started is to appoint an executive champion within the company, such as a Chief Digital Officer. With a strong bias and background in digital technology, his or her role will be to serve the board in bringing ideas and explaining how digital technologies will make a difference.
Another way is to have a dedicated weekly agenda driving action points around digital transformation. With this, a company can look at projects, experiences, applications, and user behavior, to see what their next business objective should be.
While that takes care of the processes, the next part – having a data culture – is just as important to get the changes going. The working assumption among successful companies that are transforming their businesses is that things are not business as usual.
“Organizations need to review how they can leverage data intelligence in their operations – such as through exploiting existing data sets, or by exploring collecting information for analysis. For example, in healthcare, nurses in a hospital can be more efficient with ready access to patient data on the go. In agriculture, farms can place sensors to better predict weather conditions, and even optimize the results of livestock breeding,” says Haupter.
Building a culture where employees aspire to learn to stay relevant is crucial, Haupter believes. This data culture is something that Asian enterprises are increasingly looking to, he adds, based on his exchanges with other business leaders.
Key to this is data-driven decision making – not just at the boardroom level but across the entire organization. What does the data collected from various touch points say about a situation? Can a decision be made based on this evidence, rather than intuition alone?
Already, this is happening in organizations across Asia. At Bank SinoPac in Taiwan, marketing resources are allocated based on analytics tools that help it understand the spending habits of each customer segment it wants to target. After identifying, say, the habits of working professionals in the market, it provides special offers through select channels and promote spending via its credit cards.
In New Zealand, TradeMe is the country’s largest online classifieds and auction site featuring everything from trinkets to houses – and it is turning data into gold. With 3.7 million active members, employees draw insights from their business intelligence team to get a better sense of the company’s performance. The information is critical to answering daily questions such as how many sales transactions and new listings are there in a week? How many users are using the site at a certain time? These insights empower managers with the knowledge to take more immediate and efficient actions to remedy sales declines, such as boosting particular segments where needed. All of this can now be logically based on real-time data insights, instead of going merely by gut feel.
These two examples, according to Haupter, are just the tip of the iceberg in showing the momentum across various verticals in Asia’s digital transformation journey.
Yet, this data culture does not mean being dogmatic either, he says. The quality of the data is important, and so is the human factor – the decision maker needs to shape their decisions based on what the data continually tells them and temper it with their experience and knowledge, he points out.
“Often, this is not about taking an absolute left or right turn, like in a train,” Haupter explains. “For example, a sales executive may look at the data presented to him to decide how to price a product, but needs to also be agile to adjust this dynamically when he gets new information.”
Millennials make a difference
At the same time, do not underestimate the momentum that young workers, especially millennials, can contribute to make the transformation journey successful, says Haupter.
“Millennials are digital natives, they use technology – very intensively, and are typically quite up to speed with trends and opinionated, so the status quo of doing things is often challenged,” he notes.
Companies can tap on this enthusiasm to build a data culture. The challenge is to have these millennials integrated into the transformation journey, and make them a key driver, he adds. It is important to listen to different ideas as part of a holistic approach.
Related to the introduction of millennials in the workplace are the evolving user perceptions and expectations of data privacy. While organizations can transform their businesses, this often requires the buy-in from customers over the use of their information.
“People don’t use technology that they don’t trust. If they understand how their data is used, they can be confident about sharing, whether it is for a healthcare app or simply tracking one’s run. Trust and security are critical ingredients in making digital transformation work,” says Haupter.
Beyond the millennials, countries need to start thinking about equipping the next generation with the right skills in an increasingly digital world.
Moving forward, with the growing focus on data intelligence, schools should urgently prioritize equipping youths with the fundamental digital skills required for the jobs of tomorrow, he adds.
“We should all encourage technology or STEM (science, technology, engineering, mathematics) education to be a fundamental part of the school curriculum. More can be done in incorporating technology as a theme, and making it almost like a language module as one might take up Chinese, Spanish, French, German, or English,” explains Haupter. “For instance, picking up coding and other digital skills develops fundamentals such as computational thinking, problem solving, and creativity. With a better sense of how technology actually works, he or she will be ready for the future workplace amid the rise of the 4th Industrial Revolution.”
President, Microsoft Asia
Based in Singapore, Ralph Haupter leads Microsoft’s business in a dynamic region that includes 17 subsidiaries in 42 territories and countries, over 17,000 employees, and over 100,000 partners. He is responsible for all of Microsoft’s product, service and support offerings across the region, and accelerating the company’s current transformation to being the leading productivity and platform company for the mobile-first, cloud-first era. A key area of focus for Haupter is enabling Microsoft’s customers in Asia to accelerate momentum, as they embark on their own journey of digital transformation.
Alfred is a writer and speaker with close to 20 years of experience in journalism and communications in Singapore and Southeast Asia. Previously a technology correspondent with Singapore’s national broadsheet The Straits Times, he has covered the regional technology scene for over a decade. He now runs a popular technology blog – which is keenly followed by consumers, CEOs and government regulators alike, as well as his own editorial consultancy firm.