Tech vendors rush to help APAC firms with digital transformation

Digital transformation is the new kid in town and tech vendors are rushing forward to help Asia-Pacific enterprises with their journey, including Red Hat and HPE, the latter of which has introduced a new services arm specifically to meet this need.

Hewlett-Packard Enterprise (HPE) on Tuesday launched a retweaked technology services unit designed to support customers on their digital transformation. Called Pointnext, the new organisation would tap the vendor's skillsets of 25,000 specialists in this field across 80 countries. These encompassed disciplines, including cloud consulting and operational services, to help enterprises adopt emerging technologies such as cloud, hybrid IT, Internet of Things (IoT), and big data analytics.

These specialists helped drive 11,000 projects in digital transformation a year, according to HPE. Digital transformation was disrupting every industry, including media, transport, and manufacturing, said Peter Ryan, HPE's chief sales officer of enterprise group, at the vendor's Discover Forum held in Singapore this week.

Market shifts continued to reshape enterprise IT, shifting workloads to the cloud, driving software-defined infrastructures, and leading to a data explosion that was fuelling data analytics, Ryan said.

In a world "where everything computes", he said HPE's go-to-market approach centred on three core beliefs--that the world would be hybrid; the "intelligent edge" would unleash an industrial IoT revolution; and services would be increasingly critical.

Countries such as Singapore already had earmarked digital transformation as essential to the growth of their local enterprises. In its 2017 budget, the Singapore government said it would set aside S$2.4 billion (US$1.7 billion) over four years to "future-proof" the economy and help the business community "go digital".

Finance Minister Heng Swee Keat said: "Enterprises are the heart of vibrant economies [and] for our enterprises to stay competitive and grow, they will need to develop deep capabilities. There are three capabilities that many firms will need in common--being able to use digital technology, embrace innovation, and scale up."

Here, Red Hat is touting open source as an important catalyst of innovation.

Its technologies were key components of digital transformation and, having moved beyond its role as a cost-effective alternative to traditional software, had grown to become a primary platform on which software innovation was driven, said Red Hat President and CEO Jim Whitehurst.

In fact, open source played a key role in providing companies with the ability to innovate at a fast pace, said Whitehurst, who was speaking to local media on the sidelines of the vendor's regional sales kickoff meetings in Singapore this week.

Pointing to tech players such as Google, Facebook, and Twitter, he noted that these industry disruptors had all developed their services on open source platforms. Innovations that drove cloud applications, big data, and software-defined network also took place on open source infrastructure, he added.

Its ability to facilitate change and help businesses respond quickly to market disruptions underscored the role of open source in digital transformation, he said.

A mindset change, however, would be critical in ensuring such changes would yield the outcomes businesses desired.

Any transformation carried significant risk, said Ankit Shah, director of education and packaged consulting for HPE's Pointnext in Asia-Pacific and Japan. He noted that one in six projects would experience cost overruns and the US annual economic loss due to failed IT projects were estimated to be between US$50 billion and US$150 billion.

Citing figures from McKinsey, he said 70 percent of projects fell short of expected business results and 70 percent of primary causes of failure centred on people. To enable transformation, businesses must look at the tri-factor of people, process, and technology, Shah said, encompassing corporate culture and values, methodologies and techniques, as well as IT systems and equipment.

Enterprises tended to focus on technology and process, but overlooked the need to think about how the technology could be used to drive the behaviour of employees, who ultimately would generate value from it, he said.

Businesses, he explained, often faced four obstacles to transformational change: management alignment; adoption challenges; operations challenges; and process evolution. To resolve such issues, companies would need to carry out impact analysis, facilitate behavioural change, and manage the new technology end-states.

According to a December 2016 study conducted by Singapore Business Federation (SBF), just 15 percent of small and midsize businesses and 36 percent of large enterprises strongly agreed with the need to transform to adapt to slowing economic growth as well as technological change and disruption. Across the board, 62 percent agreed with the need for businesses to transform, revealed the study, which polled 1,100 respondents.

The resistance to change indicated that most businesses were still not embracing the Singapore government's call for economic transformation, said SBF, which urged for more efforts towards helping companies with their economic transformation.