Recently announced the results of its poll of 4,500 Southeast Asian business leaders, revealing the extent of COVID-19’s impact on businesses across the region, and concerns about long-term prospects.
Unveiled at the inaugural SAP Forward Together virtual event on the new reality of businesses, the survey revealed that 40% of the businesses polled are still adopting a “wait and see” approach in response to the pandemic.
SAP reaffirms its goal to help Southeast Asian businesses “innovate and transform” to elevate their competitiveness in a post-COVID-19 world.
In a wider context, this will help ASEAN maintain its status as one of the world’s fastest-growing markets supporting consumers and businesses. The digital era is evolving into an ‘intelligent’ one whereby businesses are facing mounting new challenges amidst digital disruption and new rules to the game. Winning companies are those that transform through innovation, more so in today’s ‘digitally disruptive’ world compounded by the Covid-19 pandemic.
Rachel Barger, President & Managing Director, SAP South East Asia at the Forward Together virtual event
“The Covid-19 pandemic has resulted in the world economy going through a period of ‘reset’ for the ‘rebound’. The race for competiveness has already started again, and countries that sprint forward now will leave others trailing behind,” said Rachel Barger, President & Managing Director, SAP South East Asia.
“For countries and companies that are complacent with a ‘wait and see’ attitude, they would be left behind – and may even become ‘irrelevant’.” she said. “As businesses recalibrate their strategies for the long-term, it is crucial to shift away from an expectation to revert to normalcy as before. In a new reality, intelligent enterprises can ‘do more with less’, deliver best-in-class customer experience, build resilient supply chains, while inventing new business models and revenue streams.”
Implications of COVID-19 on SEA businesses
Majority of regional business leaders (63%) surveyed have already seen changes in customers’ purchasing behaviour and motivations since the start of 2020, although 21% of businesses are unsure or lack insight on changes in their customer’s needs. Amidst this shift, organisations are still moving conservatively with their digital transformation efforts, with many adopting a protective stance with the mindset that disruption from COVID-19 will pass in due course.
Although businesses have pivoted their operations towards e-commerce and online selling, smaller businesses still worry over implementation costs of digital platforms and juggling operations to meet the sudden influx of demand. Around 20% of businesses foresee a need to adapt their customer experience strategies to meet evolving expectations and needs of customers across platforms.
Supply chain and operations are also other aspects that businesses are keeping a close watch on, with 22% of businesses expecting significant change in the future. Alongside changing customer consumption patterns, supply chains have shifted in the wake of safe-distancing measures of lockdowns, leading to a stop-go pattern in business-to-business operations.
As businesses make sense of the new post-pandemic economic reality, worries and uncertainty over the long-term prospects of growth and survivability has emerged as the foremost concern. Over 80% of regional businesses leaders surveyed expect significant/massive impact to change their business model or operations, with just 1% expecting “business-as-usual” in the long run.
With business-as-usual no longer an option, regional business leaders are adjusting organizational priorities with a focus on business transformation (21%), enhancing customer engagement (15%), making business processes more efficient (14%), ensuring business continuity (12%), and supply chain resilience and redefinition (9%).
According to the Boston Consulting Group, high-performing companies who successfully tackled crises and major economic downturns demonstrate a similar pattern, that have allowed them to emerge as winners during and after past recessions. High-performing companies who managed to improve their top-line and bottom-line positions adopt a proactive approach, using the downturn as an opportunity to drive large-scale transformation like digitalization.