Culture of Innovation plays key role in “4×4” formula to success in the digital era
- CP ALL and Asia Cab hailed as role models achieving resilience through innovation
- Study shows COVID-19 impact as Thai companies see 12% increase in Culture of Innovation maturity and joining the ranks of leaders for the first time
- Long way to go still for Thai business sector with ratio of revenue from digital products and services 3 years behind regional leaders
- Thai business decision-makers see technology and data as key priorities for investment in the coming year
Bangkok, 18 December 2020 – A Microsoft and IDC survey is stressing the importance of having a “Culture of Innovation” for organizations operating in the digital era. As Thailand continues to deal with disruptions resulting from COVID-19, Thai organizations have seen the maturity of their Culture of Innovation grow by 12% in the post-pandemic landscape, and many have laid out well-defined plans for future investments. 72% of Thai organizations now say that innovation is a ‘must’ for them to respond quickly to market challenges and opportunities while also ensuring business resilience.
Thailand’s perspective towards this Culture of Innovation still lags behind leading organizations in Asia Pacific, 98% of whom see innovation as a necessity to stay resilient in a crisis.
Dhanawat Suthumpun, Managing Director, Microsoft (Thailand) Limited, said, “Innovation is no longer a luxury but a must-have core for every organization – especially in light of the circumstances we are facing around the world. Businesses now have to develop transformative innovations that once took years to complete, but in a matter of months. While Thai businesses have shown considerable appetite for innovation, there is still much more to be done. Our study indicates that in 3 years, Thai businesses expect to generate 48% of their revenue from digital products and services This figure is equal to the ratio generated by Asia Pacific’s leading organizations today, which in effect means Thailand’s business sector is 3 years behind the progress of the region’s leading organizations.”
These findings were released by Microsoft in its latest study with IDC Asia Pacific, which surveyed 3,312 business decision-makers and 3,495 workers across 15 markets in Asia Pacific within a six-month period, before and since COVID-19. Titled “Culture of Innovation: Foundation for business resilience and economic recovery in Asia Pacific”, it uncovered how organizations can successfully fuel business resilience and performance through innovation. The Thai edition of the survey covered 200 business decision-makers and 237 workers across the country.
Gauging Thailand’s preparedness on the road to the Culture of Innovation
The study also introduced the Culture of Innovation framework, which spans the dimensions of people, process, data, and technology, to assess organizations’ approach to innovation. Through the research, organizations’ performance was mapped against four dimensions (people, processes, data, and technology), with organizations grouped in four stages – traditionalist (stage 1), novice (stage 2), adaptor (stage 3), and leaders (stage 4).
Michael Araneta, Associate Vice President, IDC Financial Insights, said, “Thai organizations have shifted their business viewpoints considerably over the course of six months amid the COVID-19 pandemic. The study revealed that 40% of organizations in Thailand view COVID-19 as an opportunity to grow revenues much faster than competitors and gain market share. Those organizations with this “opportunity mindset” accelerated their levels of maturity, especially in the Culture of Innovation.
“Before the pandemic, 59% of Thai businesses were categorized as traditionalists, and this figure was cut to 48% in the months after. Reflecting this change at the baseline, the number of organizations at the novice level rose from 40% to 47%. 2% of surveyed organizations were classified as leaders in the post-COVID-19 period – no organization had achieved this level in the initial survey. All in all, Thai organizations have matured in the Culture of Innovation by 12% – an indication that they have increased their ability to innovate.”
Organizations categorized as leaders are reading the situation differently from others – with roughly a third of Asia Pacific leaders expressing confidence in their ability to increase market share despite challenges from COVID-19, while 45% expect to recover from the pandemic’s impact within 6 months. Thai organizations, meanwhile, have begun considering a change to their core business models – an objective that is already central to the priorities of leaders in the region.
Mr. Araneta added: “85.4% of leaders in Asia Pacific believe that their business models will have to change or be replaced within the next 10 years, including 45.4% who expect their models to become obsolete in half that time. This is a considerably more active outlook compared to Thai businesses, 64% of which may change their models within 10 years – including 27% that are considering making such a change in the next 5 years. However, 25% of Thai organizations are slow to consider the future validity of their business models at all – a much higher ratio compared to 7.7% among the region’s leaders.”
Highlighting two Thai success stories from businesses of different sizes and strategies on an innovative path to growth
One of the most interesting examples in coping with changes with innovation is Asia Cab Co., Ltd. – Thailand’s first fully integrated taxi service operator under the name “Cabb”. As a relatively new player in the public transport services scene, the company places an emphasis on innovation as a cornerstone of the entire organization and possesses complete end-to-end capabilities – from manufacturing its own cars to developing applications and tools with a Thai team on the Microsoft cloud.
Asst. Prof. Dr. Sarayut Rueangsuwan, Chief Executive Officer of Asia Cab, said, “The core of Asia Cab’s strategy is to create a business model and services that address the hardware, software, and peopleware we have on hand, using data as the key element that connects all three parts together as one. For instance, statistics on service demand levels at each time of day are used to determine how we scale cloud resources usage on Azure to match actual usage. We have also developed a more responsive service with data that flows in more directions. In addition to drivers having the opportunity to respond to passenger hailing requests, our control center can also help match drivers with passengers to improve speed and increase satisfaction for drivers and passengers alike.”
In addition to applications for passengers and drivers, Cabb’s technology infrastructure also includes an integrated control center system along with foundational systems to support web services and the customer call center. Office 365, meanwhile, takes on the task of supporting the day-to-day work of employees. Inside each vehicle, an onboard camera system uses still photos to monitor for security concerns without violating customer and driver privacy, while every driver is required to verify their identity with an ID card. Every vehicle’s movement is tracked in real time with GPS, and an SOS button is available to send emergency notices to both Cabb’s own control room and officials at the Department of Land Transport. Furthermore, every Cabb driver receives professional-level training to ensure the highest standards of service.
Another organization that is succeeding in rapid digital transformation is CP ALL Public Company Limited, who has chosen Microsoft technologies to strengthen productivity, communication, and collaboration across the company – effectively increasing the organization’s overall capabilities as well as resilience in the face of COVID-19.
Mr. Wiwat Pongritsakda, Vice President of Information Technology for CP ALL Public Company Limited and Chief Operating Officer of Gosoft (Thailand) Limited, said, “Our roadmap is to bring the cloud into the daily workflow of more than 50,000 employees – including not only CP ALL staff but also other companies under Charoen Pokphand Group. With Microsoft Teams, we have enhanced communication and collaboration through the organization, while Power Platform lets us develop new tools that optimize internal processes. We also actively encourage all departments and teams to come up with inventive ways to utilize these technologies in ways that meet their own goals as well as those of the company.”
CP ALL and other CP Group companies currently expect to complete its transition to the cloud in the first quarter of 2021 under close consultation with Microsoft – including the exploration of new possibilities in applying AI to their business.
4×4: The formula for Culture of Innovation
The Culture of Innovation study shows that Thai organizations are least prepared in the dimensions of people (1.56 out of 4.00) and technology (1.60). Over the next 12 months, 35% of these organizations intend to focus their efforts on technology development, while 26% and 25% see data and people as top priorities. Only 14% have chosen process as their top issue.
“These survey results show that a sizable number of Thai organizations have only begun considering innovation as part of their strategy,” noted Dhanawat. “Regardless, there is a positive outlook in these organizations’ recognition of their own strengths and weaknesses as well as plans to invest and improve in the future. Transforming an entire organization’s culture and capabilities is certainly no easy task, and success can only come with clear guidelines and principles in hand.”
Microsoft is introducing the “4×4” formula to foster a Culture of Innovation in organizations across all four key dimensions:
1. Encourage disruptive ideas and innovation as a corporate value
2. Reward innovation over traditional performance metrics
3. Diversify the workforce across industries, cultures, and generations
4. Skill the workforce in digital capabilities and open up to collaborations with third parties to create more value
1. Automate high-impact business processes
2. Integrate innovation and operations
3. Formalize systems and processes that drive innovation
4. Share knowledge and expertise across entire organization
1. Transform existing products, services, and decision-making processes with data
2. Create digital products and services based on real-time data and insights
3. Source data from accurate, reliable origins and ensure its security
4. Personalize customer experiences with data
1. Adopt disruptive technologies targeted at well-defined problems
2. Scale business processes to the cloud
3. Unify technology architecture to enable widespread innovation
4. Measure innovation as ROI for tech investment
“Every organization requires guidelines and frameworks that enable its workforce to create and innovate at a sustainable pace. At Microsoft, we want to give every organization in Thailand the agility and resilience required to deal with changes while ensuring stability and growth even in adverse circumstances, and we stand ready to work with them to achieve this goal together,” Dhanawat added.