“They are usually family-owned. And so, it’s about their money, not somebody else’s money,” Michelle explains. “They’re making decisions based on their own livelihoods, the livelihoods of their family members. That rings true for small businesses and all the way to some of the largest conglomerates.”
Until now, it has been easy for them to tap massive pools of cheap and relatively low-skilled workers to solve problems or meet targets rather than adopt new technologies. That strategy works in the production of low-end goods, such as in a garment factory or a food processing plant. “But that can only take them so far, and they’re starting to recognize that,” she says.
The change in mindset often comes when a company steps up into the production of higher-end goods and services aimed at sophisticated export markets and foreign partners who hold higher expectations of quality and other standards. “This is a matter of survival on a globally competitive scale, and so they are recognizing that technology will help them to be more competitive.”
Some of the largest companies in emerging economies are rapidly taking up technology solutions so they can join the global business community. “If they want to have foreign investments – if they want to be competitive globally and work with global partners – they need to have a strong governance model. They need to have technology in place in order to be competitive,” Michelle says.
She cites the example of how one regional company modernized its internal communication across a string of different plants and over a range of industries. Previously, paper memorandums would have been distributed from the CEO’s office. Now, that same CEO can have regular bi-directional conversations with his workers and managers on all sorts of issues, from improving productivity by reducing errors to better managing absenteeism.
The big game changer in all this is the cloud. Economical and flexible, the cloud not only provides efficiency, communication, and better governance, it also brings unprecedented security. This is of grave importance to a region regarded as particularly vulnerable to cyberattacks. Microsoft’s most recent Security Intelligence Report found that four out of the nine countries which Michelle covers were dangerously open to cyberthreats because of lax regulations, the widespread use of malware-infused pirated software, poor IT management, and simple complacency.
It is clear that cybersecurity is an essential part of any business expansion strategy. One example is Chip Mong, a conglomerate in Cambodia that has its eyes set on spreading its reach across the whole of Southeast Asia. Since 1982, it has been producing a diverse array of services and products – from manufacturing and distributing concrete to importing and distributing cement, ceramic tiles, and steel. It has also moved into a range of consumer goods.
But to move to the next level, its leaders understood that data protection would be essential to winning market share and satisfying customers. And so Chip Mong adopted a cloud-based Office 365 solution to transform its operations. Not only did this resulted in a robust security posture, it produced competitive efficiencies within, and collaboration across, its many business units and teams. Furthermore, its digital transformation journey bolstered Chip Mong’s reputation as an attractive employer for Cambodian millennial professionals who understand that doing business in the cloud can open the door to the world.
For many years, manufacturers in emerging markets relied on their comparatively low costs to be effective exporters. But things are getting more complicated as industries develop and global markets become more sophisticated and discerning. Quality control, and the costs associated with it, are now key. And, data-driven technology is playing a crucial role.
Let’s look at the Hirdaramani Group. It started as a single retail store in Sri Lanka’s capital, Colombo, and today, it stretches across multiple sectors with more than 60,000 employees working in dozens of facilities in four countries. With an eye on growing its apparel manufacturing business further, Hirdaramani has adopted an end-to-end quality management system, it calls Res.Q. This solution integrates real-time data and analytics with Power BI to monitor key production quality indicators. This eliminates reporting time lags and enables data-driven decision-making, which, in turn, slashes costly wastage, builds new efficiencies, and boosts competitiveness.
Michelle sees ongoing innovation, based on cloud technologies, as the way forward for emerging economies as more globally-minded entrepreneurs establish new industries, tap new export markets, and create new jobs.
“The cloud changes everything for small and medium businesses. If you think about how they operate without technology, it’s a paper-based. Their borders are typically within the distance that they can reach their customers, which might be a walking distance, it might be a driving distance. But with the cloud, they can theoretically operate anywhere.”
“That means barriers are broken down,” Michelle says. “The cloud provides them with capabilities that, not so long ago, only the top 1,000 companies globally would have had access to. The whole world becomes an opportunity for anyone in any country at that point. From a customer perspective – everyone can access the global economy. You can have a company in Bangladesh or Cambodia competing with companies in Western Europe. And that is a very different story today than it was 10 years ago.”
This is a pivotal change for Asia’s emerging markets, Michelle says. If companies anywhere can compete anywhere, there is no reason why a now small company based in Bhutan or Brunei, Nepal or wherever, cannot grow, prosper and “one day make it on the Fortune 500.”