In today’s hyper-competitive global economy, delighting the customer has taken centre stage. Data Management companies that are winning are those that have perfected the art of customer experience, while those grasping for market share have fallen short in this area. A crucial component being ‘modernising of IT infrastructure’ to keep up with the increasingly sophisticated technology demands that are required to compete in today’s market.
According to 451 Research and CenturyLink’s latest study, 57 percent of large organizations in Asia Pacific are focusing on having a formal strategy for digital transformation, with “improve customer experience” (44 percent) being the top reason for this desire.In fact, according to Gartner, enterprise IT spending in Southeast Asia is expected to reach $62 billion by 2018, with Singapore and Malaysia being the top spenders.
A Changing Market Landscape
This renewed focus on the customer owes much to advances in technology, access to which is changing all aspects of business – shaping growth, lowering the barriers to entry to new markets, and enabling the development of new business models and services. The net result is unprecedented levels of disruption and competition, putting new power in the hands of the customer. If customers don’t like the service they receive, they will simply vote with their cheque books.
Witness the current trailblazers of the new application driven economy – companies like Uber, Grab and Airbnb. They each cater to very different buyers and have different needs, but they have successfully and drastically disrupted markets. And they’ve done so by using technology that puts the customer experience at the heart of their operations. For example, data infrastructure is now better architected to mitigate latency issues, so apps and data are distributed as close to the user base as possible, versus the traditional data centre approach, where everything is located in one data zone. This keeps customers happy by ensuring they have fast, reliable access at all times.
But it’s important to note that the new players are not the only ones constantly transforming their operations to become more customer-centric; more established organisations are re-engineering their business models to better serve the needs of their customers and enable them to consume their services in ways desired. For example, DBS as the largest bank in Singapore, used to be running infrastructure in a traditional way with two dominant databases of the household name variety in a few years ago. With the desire to drive more customer excitement, DBS has been looking at the open source/cloud technology agenda to tie tech change into customer experience.
However, the path to becoming more customer-centric for established businesses is not without its challenges, which include old legacy systems and technology migration issues.
Upgrading IT Systems
Technology and how well it performs is increasingly becoming the key determinant of a business’s success or failure. Taking Singapore Exchange (SGX) as an example. In 2016, SGX’s disk and software failure led to a major trading disruption, raising concerns on the bourse’s reliability, particularly with its inability to recover within the same day. And SGX’s system glitch- along with SGX’s recurring system issues over the last few years- is damaging the investing holding company’s reputation, causing sluggish trading volumes, a fall in new listings and even a string of privatization deals that have eroded its market capitalization.
SGX’s system outage, which resulted to the securities market shutdown, is something many IT leaders can relate to. With businesses of all kinds and sizes becoming increasingly dependent on technology for their day-to-day operations, CIOs are constantly grappling with system glitches and outages. And SGX’s system failure sheds light on the importance of keeping up with the latest technology to eliminate downtime, enhance data recovery, and boost operational resiliency.
Despite CIOs’ efforts to reduce costs while delivering more value and a better experience for their customers, many IT infrastructure transformation initiatives are still being stymied by legacy IT. According to the same study by 451 Research and CenturyLink, 31 percent of APAC enterprises indicated that the inability to migrate legacy IT and business applications to the cloud is one of the top three barriers to a successful digital transformation.
Fragmented IT data infrastructures, consisting of a hotchpotch of old mainframes, databases, languages and servers, are all too common, increasingly costly and difficult to maintain, and put the brakes on innovation. How can one focus on the customer experience when most of the time and resources are being spent on keeping data infrastructure up and running?
Inflexible and burdensome service contracts are a further issue. In uncertain times, it’s important for CIOs to have the freedom to react to changing market conditions, flexing services up and down as required. However, some of the incumbent large IT providers’ data service offerings aren’t even compatible with the new ways of working, with many organizations forced to pay more for services and licenses they don’t even need.
Moving Forward with Digital Transformation
Agility and Flexibility forms the order of the day in today’s hyper-competitive market. With a strong focus towards digital transformation, businesses are accelerating the delivery of data infrastructure and application services, which oftentimes require nearly total data centre refreshes as the only way to eliminate IT bottlenecks and speed-up time-to-market.
It is not enough to simply consider data centre hardware, which consumes copious amounts of space and power; reviewing the total cost of ownership in relation to a company’s software applications is of paramount importance, now more than ever. So it’s time to start examining the total cost of ownership before looking at one’s legacy mainframe.
David Kim is the Managing Director, SEA, TmaxSoft.