Digital transformation in action: How CIOs are modernising legacy systems in Thailand

In the quest for greater speed and agility, organisations in Thailand are attempting to determine how to renew or upgrade legacy systems at pace and with minimal cost to support digital transformation efforts.

Most CIOs are realising the benefits of adopting a software-driven approach, leveraging hyper-converged infrastructure to manage ongoing pain points associated with outdated technologies.

Taking such steps is allowing technology executives in Thailand to focus on the applications capable of powering the business to future growth in 2020 and beyond.

“CIOs in Thailand are being impacted by lots of different market trends, including ‘Thailand 4.0’,” observed Maytha Deemeechai, country manager of Enterprise Business Group at Lenovo Thailand. “Digital transformation is a leading priority for CIOs but unclear strategies and progress from the government is preventing execution in some organisations.

“This is also alongside the rising threat of cyber security, change management challenges and people being resistant to change.”

In response, Lenovo is partnering with VMware to help CIOs digitally transform in Thailand through the deployment of new solutions and technologies in the enterprise.

“We have an aligned partnership at local, regional and worldwide levels which was first developed upon establishment of our Data Centre Group business at Lenovo,” Deemeechai added.

“We partner on the research and development [R&D] of new products with a strong focus on small to medium-enterprise [SME] businesses, helping consult with CIOs to understand key challenges and design solutions to meet customer requirements.”

By 2022, 61 per cent of Thailand’s GDP (gross domestic product) is expected to be digitalised, with growth forecast across all sectors. According to IDC, such a shift is expected to drive approximately US$72 billion in IT-related spending across the country during the next three years.

“The race to reinvent is inevitable,” outlined Anchalee Sudechawongsakul, market analyst at IDC Thailand. “We foresee a steady growth in adoption of emerging technologies in the country mainly because Thailand is working to improve economic growth by shifting its economy from an industry-driven country to one that is driven by high-tech innovations.”

As a result, Sudechawongsakul urged business leaders to embrace emerging technologies in order to maximise opportunities amid the rise of a new digital transformation economy.

“Innovation will continue to disrupt every industry and business leaders should focus on technologies that enable business outcomes,” Sudechawongsakul added. “This is the right time to realise that enabling the digital industry will drive other industries to grow as well.”

Digital maturity

Speaking as head of IT at Asset World – one of Thailand’s most prominent real estate conglomerates – Tanin Uthayanaka said that in the context of digital transformation, technology acts as “only an enabler”.

“Process improvement and change management are key to success in digital transformation and we have an organisational structure which caters for process improvement called the Operation Excellence Department,” Uthayanaka outlined. “This department has established change management processes and has senior management support to improve, change and create processes using technology.

“We are at the stage of implementing many digital transformation projects ranging from business intelligence, CRM [customer relationship management] systems, smart buildings and video analytics.”

Founded in 1961, Pacific Healthcare Group (PHC) is a business born in Thailand with aspirations to be one of the leading health specialists across Southeast Asia.

Fast forward to 2020 and the organisation has connected with more than 600 million consumers, with plans in place to further expand into the key markets of the Philippines, Vietnam, Myanmar and Cambodia.

“The PHC business has gradually experienced digital interruptions for past few years, mainly in the area of sales, marketing and IT,” added Daniel Lui, CIO and vice president of operations at PHC.

As part of an internal strategy to accelerate marketing plans, Lui said PHC embarked on an artificial intelligence (AI) journey in early 2019.

“The new digital platform for customer data went live in August 2019 with dashboards and KPIs,” Lui explained. “After sufficient data is accumulated, the next step is to apply an AI algorithm for augmented marketing decision making.

“The long-term goal is to achieve AI-enabled marketing automation. We are also in process of building our own e-commerce platform which will allow us to interact with customers during the online purchasing process. This will enable a seamless customer experience through both online and offline channels.”

Meanwhile at RMA Group – a global business solutions headquartered in Bangkok with expertise in establishing distribution and service support networks – the organisation recently entered the “standardisation stage” of its digital transformation strategy.

“We are bringing in new ERP [enterprise resource planning] systems to better leverage centralised information systems, with the target of reducing the number of manual processes we have and converge towards a ‘single source of truth’,” said Alex Konnaris, group CIO of RMA Group.

According to Konnaris, such standardisation and mapping of business processes should be driven by the “business itself, and not IT”.

“Often employees are so busy doing operational tasks that they do not have time or the drive to focus on process standardisation and improvement,” he cautioned. “Change management must be driven from the top, empowering resources allocation and decision makers.

“New systems should fit well into the ‘start small, think big’ concept to allow for confidence building through proof of concepts before scaling up. Legacy systems can present roadblocks but as long as the above has been achieved, it should be manageable.”

In defining success from a digital transformation perspective, Konnaris cited the use of real-time reports and dashboards within the company, through “having the fingertips of senior management accessing accurate data and gaining insights from automated analysis”.

Transformation in action

Drawing on more than 30 years experience in delivering business transformation programs, as CIO of PHC, Lui holds overall responsibilities for IT and logistics across operating countries, driving the strategy, operations and innovation.

“From our short experience, the key challenges of impacting our digital transformation project execution are data issues and local data privacy law,” Lui acknowledged.

“As business is driven by data, we need to raise the data literacy level in the company so that they have the ability to read, work with, analyse and argue with data to get powerful insights for business decisions.

“Clear data ownership should be identified, with data management process and tools in place. This requires good quality of data, hence there must be measures in place to ensure data accuracy and completeness at the data sources.”

For Uthayanaka, one of the major roadblocks of digital transformation remains linked to “culture change”.

“People are used to doing things the way they have done it and do not want to take additional responsibilities because of transformation,” he said. “The cost of transformation requires  management to consider following competitors instead of leading them, which results in complaints from users due to the running of old systems.”

As a result, Uthayanaka said digital transformation success must come from “the top down”, calling on senior management executives to instigate change.

“We have senior management support to review the change of processes to be implemented using technology with weekly management committee meetings and an Operation Excellence Department as the facilitator of process improvement,” he advised. “Also, the finance department has embarked on shift of mindset to provide financial services to business units with the assistance of external consultants.”

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