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HKPC releases digital transformation study

In the current digital era, the rapid development of new technologies, for example, social media, mobile devices, analytics, communications and cloud technologies, has created new expectations on services/products to be provided by the business sector, the latest report by the Hong Kong Productivity Council notes.

All the demand from external and internal needs, not to mention the active promotion of “smart city” by the HKSAR Government, urged the necessity of digital transformation among Hong Kong companies – either go digital or be replaced.

In the view of this, the Hong Kong Productivity Council (HKPC) jointly undertook the “Research on Digital Transformation in Hong Kong Business Sector” in collaboration with the HK branch of a Japanese multinational technology company.

The report was aimed at gaining a better understanding of the present situation and challenges of Hong Kong companies in the digital transformation process.

The results of the research will help raise awareness among the business and public sectors and facilitate the formulation of solutions and recommendations for the digital transformation of Hong Kong.

In order to develop a robust understanding of the views from Hong Kong companies towards digital transformation, both focus groups and telephone survey were conducted to facilitate both qualitative and quantitative analysis.

Representatives from Hong Kong companies were invited to share their views and difficulties in the digital transformation process at three focus group meetings conducted by HKPC.

According to an article on the report, the first and most important thing that the report points out is that digital transformation isn’t limited to the adoption of new and exciting technology solutions — those aren’t going to be very helpful unless companies can leverage those solutions to improve efficiency, change people’s mindset, and move to a business model that is enabled by digital.

By analysing the current scenario in Hong Kong, the HKPC found that a lot of companies still follow traditional approval and documentation processes which means physical documents need to be created, signed, processed, and stored, all of which are time-consuming and inefficient.

While going digital, especially with documentation, is easy, companies in Hong Kong often have ageing staff who don’t see the benefits. Moreover, the city’s business leaders don’t seem to understand the value of technology. Hence, transformation projects are hard to start. In addition, financial resources are also a concern.

These are problems that both large enterprises and SMEs struggle with. However, businesses must think long-term and make the right investments in technology in order to ensure sustainability.

The HKPC report lays out five main recommendations for business:

  1. Set a clear strategy to lead digital transformation at management level: Digital transformation is an on-going process that takes time to reflect the return of investment. Hence, it is essential to develop a comprehensive digital transformation strategy plan at management level to lead the process and set well-defined goals for divisions and teams to achieve it.
  2. Establish two-way communication for employees to involve in the process: It is always important to keep employees informed and involved throughout the whole digital transformation process, as it allows employees to imagine their future working style and potential benefits on efficiency after the digital transformation process to secure their support.
  • Utilise the resources available in the market to gear up at early stage: Talent holds the key to digital transformation. However, it is difficult or expensive to hire new staff who are technically proficient and understand your company well. Re-skilling existing staff is a better solution in this case with the availability of subsidies from the Reindustrialisation and Technology Training Programme for companies to train their staff in advanced technologies, especially those related to digital transformation.
  1. Start cloud migration to reduce the reliance of a single system: a legacy system not only creates limitations to the technology or features that can be adopted but can also lead to potential cybersecurity issues as a result of gradual termination of system updates and support by the product developer. Thanks to the latest cloud technology, people can now enjoy a flexible and protected environment on applications with continuous IT support.
  2. Proactively review cybersecurity and data backup measures to protect the company’s valuable data assets: data is a valuable asset and is equally as important as cash. Hence, companies should start accumulating data – valuable asset of the companies to prepare for digital transformation, regardless of their competence in data analysis. However, it must come with suitable security and backup measures, just like a safe to keep the cash.

Overall, the reality is that companies need to think long and hard about digital transformation if they want to stay competitive in the global marketplace.

With companies in neighbouring countries like Malaysia, Indonesia, Thailand, and the Philippines boosting digital capabilities and producing quality products at an affordable rate, Hong Kong is under considerable pressure.

Fortunately, the government is taking action, providing support through various programs — but business leaders and staff need to make an effort to understand the value of technology in order to benefit from any of it.

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