Business organisations need to embrace innovation to survive and create their future value in the digital disruption era, says Accenture Thailand.
Nontawat: Regulation is a key factor
"Thailand's business organisations are beginning to transform to create future revenue sources and embrace innovation," said Nontawat Poomchusri, country managing director and financial services lead.
Thailand has begun to experience a wave of digital disruption.
Venture capital funds have been rising with a compound growth rate of 143% during 2012 to 2016. Adoption of the sharing economy has been on the rise, while Thai banks have offered new digital services.
The country is deeply digitally connected with 46 million internet users. The country's 67% penetration rate of social media users is higher than the average rate for Southeast Asia, which stands 50%.
Thais are also tech savvy and impatient when it comes to poor service quality, said Accenture.
The company said the global value of enterprises in 2011 was US$16 trillion (524 trillion baht), with 96% representing present performance and 4% future value, but in 2015, that value was US$19 trillion, with 64% coming from present performance and 36% from future value.
"In the future, business value will be based on their innovative capabilities, commercialisation and the number of active customers, rather than business performance," said Mr Nontawat.
He said that innovation not only brings new business, but also helps transform the core business by improving competitiveness, customer experience and profitability.
Core business is important and needs to be transformed in order to maintain cash flows, providing funds for new investment.
"Corporations need to balance their core and new businesses," he said.
Mr Nontawat said corporations that can be a disruptors need to be customer-centric by providing real solutions and value to them. Companies must take risks, fail fast, learn and develop a partnership-oriented mindset rather than doing everything themselves, he said.
Businesses need to overhaul their organisational structures and collaborate with employees to accelerate time to market, said Mr Nontawat.
Moreover, businesses have to form more partnerships in their ecosystems rather than build everything by themselves, he said, citing Line's expansion beyond chat to create additional services as an example.
The recent joint venture between JD.com and Central Group, focusing on e-commerce and financial technology, have similarly helped the pair ramp up speed to market, he said.
"Greater variety of services in the ecosystem will make customers addicted to the platform," said Mr Nontawat.
He said that regulators such as the Bank of Thailand, the telecom regulator, the Department of Land Transport and the Revenue Department will be game changers when it comes to competition in cross-border services, helping bring in new players.
"Regulation is a key player in digital fragmentation and a factor determining whether businesses gain financially or not," said Mr Nontawat.
Business and industry stakeholders need to work with regulators to shape the industry, he said.
