How Can Myanmar’s Family-Owned Businesses Be Ready for Becoming an Intelligent Enterprise

Managing Director, SAP Indochina

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The Myanmar we knew seven years ago is now a far cry from the Myanmar that has embraced Industry 4.0. From a recluse country cut off from the global network, Myanmar has quickly morphed into a bustling nation, characterised by at least 33 million mobile subscriptions and an internet penetration rate of about 95%.

Everywhere are encouraging signs of digitalisation—there is now a ride-sharing service in the country, online travel platforms, and even a bunch of fintech startups trying to win the confidence of a largely cash-dependent population.

However, the pace of digital economy poses a challenge for Myanmar’s family-owned businesses, which comprise 83% of total enterprises locally. They are those that have gained strong foothold in Myanmar following decades of operations, and are likely targets for disruption by nimbler start-ups.

Myanmar’s family businesses: Are they digitally ready?

For owners of family businesses, however, this isn’t just a simple case of throwing out their legacy systems and making tech purchases to ride the trend. Many factors will come into play in their decision to digitise—from financial conservatism, to succession planning and family convention—and these will all have to be weighed against the larger picture of sustaining their business.

Just take a look at how some of the most successful enterprises in Asia did it. For years, they have used their “home advantage” to understand their markets well and build long-term relationships with regulators. They have also largely eschewed a chain-of-command leadership—which, if anything, indicates their willingness to evolve their systems and embrace a more flexible ownership model.

All these factors can help family-owned businesses in Myanmar as they embark on their digital innovation journey.

Myanmar digital transformation
Are Myanmar’s family businesses ready to become data-driven organisations?

Building an intelligent enterprise

To make Myanmar’s family businesses digitally ready, it’s important for business owners to focus on three elements: technologies, data, and people. These are key to building an intelligent enterprise—a business whose core is run by real-time data—so it can keep pace with the changing demands of Industry 4.0.

But, what really is an intelligent enterprise? Let me walk you through some of its components:

1. Technology

In a study conducted by the Economist Intelligence Unit (EIU), it was found out that the performance of family-owned businesses across APJ has yet to match that of the non-family businesses. “They need to do a lot more to remain competitive,” asserts Kavil Ramachandran, executive director at the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business.

This, for instance, is a case of financial conservatism that characterises a number of family enterprises in Myanmar. Wary of depending on expensive external funding, they only begin accessing capital markets when their financial reserves are already insufficient to meet new business demands.

With new technologies such as machine learning, data analytics, and the Internet of Things, this can change as it now becomes possible to interconnect processes and accelerate time to market. Because repetitive manual tasks are reduced, decision makers can thus focus right away on enterprise-affecting issues and study new market opportunities.

An intelligent suite likewise offers business owners the ability to foresee resource scarcity and direct them to areas where they are most needed.

2. Data

In today’s business, real-time data is the newest currency. It’s what allows companies to understand employee needs and spot opportunities for innovation. More importantly, it’s what gives businesses quick insight into customer preferences and their purchasing habits.

How to personalise customer experience, where best to engage millennial customers on social media, which merchandise are they likely to buy next—these are questions real-time data can address, clueing in business owners on areas they can disrupt and break into.

3. People

A study by the Myanmar Business Survey reveals that companies in the beverage and food sectors are those that employ staff with the highest average number of working hours, who also incidentally receive the lowest average payments. This, by and large, results in low labour productivity (Myanmar, for instance, had only 3.4% growth rate as at December 2017, compared, say, to Philippines’ 8.44% of the same period) and has potential repercussions on the bottom line.

An intelligent suite can turn this around by letting people work less, but get more done. Using advanced analytics capabilities, employees can reduce their time spent on manual workload and instead focus on building strategic customer relationships and enhancing workplace collaboration.

In a study conducted by the Economist Intelligence Unit (EIU), it was found out that the performance of family-owned businesses across APJ has yet to match that of the non-family businesses.

The road to industry 4.0

Myanmar, no doubt, is in a unique position to transform itself digitally. As it stands, a digital master plan is now in the works to further boost internet penetration in the country, enhance mobility for the young workforce, and make Myanmar a more attractive place for foreign investments.

But much needs to be done, especially among family-owned businesses whose legacy rules need to give way to flexible systems that can simplify business processes, boost employee productivity, and add value to customer relationships.

The dawn of intelligent enterprise is indeed finally here in Myanmar, and I can’t wait to see it happen.

How does your family enterprise stack up against the rest? Take this survey and get clues on how you can meet new business demands.

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