Business Innovation In Southeast Asia: Can Your Small Business Keep Up?

Roy Wakim

Despite the state of unpredictability and volatility in the world’s most powerful economies, the future looks bright to entrepreneurs in ASEAN member states. Southeast Asian business leaders are now more positive about sales increases, workforce expansion, and investment growth, according to the YPO Global Pulse Confidence Index Survey for Q4 2016.

Perhaps this optimism has a lot to do with the fact that Southeast Asia is one of the most promising emerging markets today, with a consumer class expected to increase from 67 million households in 2010 to 125 million in 2025. Whether you’re a current business owner or just about to start a business in Southeast Asia, you are in the best position to make the most out of this exciting business climate.

Southeast Asia: The region to beat?

In 2013, ASEAN member states—Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam—produced a combined GDP of USD 2.4 trillion. If it were a single country, it would be the seventh-largest economy in the world. Since its founding in 1967, ASEAN policies towards integration and liberalised trading deals within and outside the region have spurred economic growth as well as resilience against external shocks. Average government debt in the region, at 50 percent, remains a lot lower than the United States or the United Kingdom.

Investor confidence in the region has outpaced even its strong neighbour China, as foreign direct investment (FDI) inflows in the ASEAN-5 countries (Indonesia, Malaysia, the Philippines, Singapore, and Thailand) increased by 7 percent in 2013 with USD 128.4 billion in FDI receipts. China had only  USD 117.6 billion.

Furthermore, business executives from the United States look forward to increased profits in their Southeast Asian operations in 2017, according to the latest ASEAN Business Outlook Survey. Although the withdrawal of the United States from the Trans-Pacific Partnership may affect future American business prospects, it may open up opportunities for other potential trade deals such as the Regional Comprehensive Economic Partnership, which includes the 10 ASEAN member states as well as trading partners China, India, Japan, Korea, Australia, and New Zealand.

And while China’s e-commerce landscape is largely monopolised by big players such as Alibaba and WeChat, Southeast Asia remains a fertile ground for Internet businesses, with no single player dominating its diverse market. With its 260-million-strong Internet user base expected to increase to 480 million in 2020, Southeast Asia’s Internet economy may be worth over USD 200 billion by 2025.

The rapid growth of small and midsize businesses in Southeast Asia

According to a 2015 report by the US-ASEAN Business Alliance for Competitive Small and Medium Sized Enterprises, small and medium enterprises (SMEs) comprise 96 percent of firms in ASEAN member states. Despite today’s many economic challenges, SMEs have experienced unprecedented growth in the region.

SMEs in Malaysia, for instance, have significantly contributed to the overall growth rate in ASEAN, contributing at least 30 percent to its own GDP, with SMEs alone growing at a rate of 8.4 percent. SMEs account for almost 50 percent of the country’s labour force, with most engaged in the services sector.

According to a report from Economics World, SMEs in Indonesia have made qualitative and quantitative strides for the country’s overall economy. Employment generation is one of the most significant contributions of Indonesian SMEs. They have always employed more than 96 percent of the country’s workforce, while consistently contributing no less than 50 percent to the country’s GDP.

While information on SME’s economic contribution in the Philippines is limited, the latest data from the Department of Trade and Industry shows that SMEs contributed to 25 percent of its exports in 2014. SMEs in the Philippines generated a total of 4.8 million jobs in 2014, which made up 62 percent of the total labour force.

Potentially the most promising emerging economy in Southeast Asia in the near future, Vietnam is estimated to experience up to 10 percent annual growth rates by 2025. A huge part of this growth is expected to come from SMEs, which have experienced an average of 20 percent profit growth rates over the past few years. A report from The Asia Foundation states that SMEs in Vietnam contribute over 40 percent to the country’s GDP, employ 77 percent of the workforce, and make up 80 percent of the entire retail market.

Meanwhile, in Singapore, 59 percent of polled businesses have experienced growth in 2015, despite economic uncertainty within the business community, according to the CPA Australia report.

Boosting business innovation among SMEs in Southeast Asia

The growing role of SMEs in any region’s overall economic development can be attributed to two separate but interrelated factors: policies and technology.

The implementation of the ASEAN Economic Community (AEC) in 2015, for example, opens up SMEs to a larger potential consumer base. As ASEAN member states integrate into a single market and production base, businesses can access much larger markets than before, rather than being limited to a single market within the country.

As for technology expansion? According to the 2014 ASEAN SME Policy Index, SMEs still face challenges accessing technology, finance, and competitive markets. In fact, the study shows that the biggest policy gap in the region is the promotion of technology and technology transfer in the different stages of a typical SME life cycle.

A country worth emulating in terms of technology adoption is Singapore, which ranks first among the most tech-ready countries in the world and is also the most innovative in Asia. Even non-tech firms in this city-state have embraced the digital revolution, taking advantage of social media, business analytics, and enterprise mobility.

If you’re an SME owner or aspiring entrepreneur in Southeast Asia, you need to maximise the existing technology infrastructure to grow your small business. While the Southeast Asian business landscape is ripe for SMEs, the environment is also getting more and more competitive. Business firms and even governments are aggressively moving towards modernisation and trade liberalisation, chasing the e-commerce “gold rush” and capturing markets even beyond national borders.

So, even with a growing potential customer base, solid technological infrastructure, and supportive policy environment, competing in this exciting business era may produce new challenges. A sudden increase in your customer base, for instance, may burden your staff, especially your customer service, IT, and finance personnel. Such disruptions, although generally positive, may compromise customer service as well as the quality of goods and/or services, making your business lose its momentum in the process.

How to modernise your small business with cloud ERP

To address these issues, SMEs can harness the benefits of technology. Free flow of information through digitised platforms improves not only business-to-customer communications but also business-to-business transactions. SMEs can also benefit from online payment solutions, as customers become more mobile and digitally savvy. Tools that improve day-to-day tasks help streamline business processes, speeding up workflows and improving service delivery. To ease the need for physical technology infrastructure while improving data security, more firms are turning to cloud-based enterprise resource planning (ERP) solutions.

Different aspects of your business like customer relationship management, finance, and supply chain management can benefit from cloud-based ERP solutions in several ways:

  1. More room for innovation and expansion. A cloud-based ERP solution can take multiple aspects of your business into a single platform that is more customisable as your business grows and diversifies. As processes are streamlined, information flows faster and more smoothly, allowing you to make quicker business decisions. It also frees up your technological infrastructure while reducing labour costs typically spent for IT professionals responsible for network maintenance.
  1. Minimised costs from interruptions and glitches. Running a business will not always be smooth-sailing. A lot of business owners and managers end up spending too much time making sure that everything is running perfectly, on top of the time spent solving actual problems. A system that quickly identifies glitches, such as past due bills, late shipments, or accounting anomalies, allows business owners and managers to focus more on solving problems while spending less time finding them.
  1. Integration with old systems. Along with business expansion comes the need to modify and customise existing ERP systems. Older ERP systems, however, may not have this capability. Switching to an entirely different platform can also be costly, especially for SMEs. A good cloud-based ERP allows you to keep existing data and processes from old systems while allowing you to adapt to changing business needs through new, expanded ERP solutions.
  1. Realtime data visibility. As transactions are stored in the cloud in real time, cloud-based and mobile-enabled ERP solutions allow business owners and managers to access their business data anywhere—even on their mobile devices in the middle of rush hour traffic. This facilitates faster, smarter business decisions necessary in a fast-paced business climate.

Without realising the potential opportunity costs, a lot of SME owners initially hesitate to grow their business with cloud-based ERP. SMEs may risk getting left behind, not only by their larger counterparts but also by other SMEs that choose to invest in cloud computing technology. With a conducive policy environment and thriving business landscape, now is the best time to take advantage of the potential gains from modernising your business.

To maximise your SMEs potential in todays rapidly changing business climate, explore SAP Business One and how it perfectly suits your business needs.


Roy Wakim

About Roy Wakim

Roy Wakim is Director of SAP Business One (Southeast Asia)at SAP. He is responsible for the growth and expansion of this ERP solution within the region. Roy has 15 years of leadership experience, driving innovative sales strategies and execution across Asia Pacific. He has an MTech degree in Technology Management from the University of Western Sydney.

Innovation Without Boundaries: Why The Cloud Matters

Michael Haws

Is it possible to innovate without boundaries?

Of course – if you are using the cloud. An actual cloud doesn’t have any boundaries. It’s fluid. But more important, it can provide the much-needed precipitation that brings nature to life. So it is with cloud technology – but it’s your ideas that can grow and transform your business.USA --- Clouds, Heaven --- Image by © Ocean/Corbis

Running your business in the cloud is no longer just a consideration during a typical use-case exercise. Business executives are now faced with making decisions on solutions that go beyond previous limitations with cloud computing. Selecting the latest tools to address a business process gap is now less about features and more about functionality.

It doesn’t matter whether your organization is experienced with cloud solutions or new to the concept. Cloud technology is quickly becoming a core part of addressing the needs of a growing business.

5 considerations when planning your journey to the cloud

How can your organization define its successful path to the cloud? Here are five things you should consider when investigating whether a move to the cloud is right for you.

1. Understanding the cloud is great, but putting it into action is another thing.

For most CIOs, putting a cloud strategy on paper is new territory. Cloud computing is taking on new realms: Pure managed services to software-as-a-service (SaaS). Just as legacy computing had different flavors, so does cloud technology.

2. There is more than one way to innovate in the cloud.

Alignment with an open cloud reference architecture can help your CIO deliver on the promises of the cloud while using a stair-step approach to cloud adoption – from on-premise to hybrid to full cloud computing. Some companies find their own path by constantly reevaluating their needs and shifting their focus when necessary – making the move from running a data center to delivering real value to stakeholders, for example.

3. The cloud can help accelerate processes and lower cost.

By recognizing unprecedented growth, your organization can embark on a path to significant transformation that powers greater agility and competitiveness. Choose a solution set that best meets your needs, and implement and support it moving forward. By leveraging the cloud to support the chosen solution, ongoing maintenance, training, and system issues becomes the cloud provider’s responsibility. And for you, this offers the freedom to focus on the core business.

4. You can lock down your infrastructure and ensure more efficient processes.

Do you use a traditional reporting engine against a large relational database to generate a sequential batched report to close your books at quarter’s end? If so, you’re not alone. Sure, a new solution with new technology may be an obvious improvement. But how valuable to your board will you become when you reduce the financial closing process by 1–3 days? That’s the beauty of the cloud: You can accelerate the deployment of your chosen solution and realize ROI quickly – even before the next full reporting period.

5. The cloud opens the door to new opportunity in a secure environment.

For many companies, moving to the cloud may seem impossible due to the time and effort needed to train workers and hire resources with the right skill sets. Plus, if you are a startup in a rural location, it may not be as easy to attract the right talent as it is for your Silicon Valley counterparts. The cloud allows your business to secure your infrastructure as well as recruit and onboard those hard-to-find resources by applying a managed services contract to run your cloud model

The cloud means many things to different people. What’s your path?

With SAP HANA Enterprise Cloud service, you can navigate the best path to building, running, and operating your own cloud when running critical business processes. Find out how SAP HANA Enterprise Cloud can deliver the speed and resources necessary to quickly validate and realize solid ROI.

Check out the video below or visit us at

Connect with us on Twitter: @SAPServices


Michael Haws

About Michael Haws

Michael Haws is the Vice President of HANA Enterprise Cloud at SAP. His specialties include Enterprise Resource Planning Software & Services, Onshore, Nearshore, Offshore--Application, Infrastructure and Business Process Outsourcing.


Consumers And Providers: Two Halves Of The Hybrid Cloud Equation

Marty McCormick

Long gone are the days of CIOs and IT managers freely spending money to move their 02 Jun 2012 --- Young creatives having lunch and conversation. --- Image by © Hero/Corbisexisting systems to the cloud without any real business justification just to be part of the latest hype. As cloud deployments are becoming more prevalent, IT leaders are now tasked with proving the tangible benefits of adopting a cloud strategy from an operational, efficiency, and cost perspective. At the same time, they must balance their end users’ increasing demand for access to more data from an ever-expanding list of public cloud sources.

Lately, public cloud systems have become part of IT landscapes both in the form of multi-tenant systems, such as software-as-a-service (SaaS) offerings and data consumption applications such as Twitter. Along with the integration of applications and data outside of the corporate domain, new architectures have been spawned, requiring real-time and seamless integration points.  As shown in the figure below, these hybrid clouds – loosely defined as the integration of data from systems in both public and private clouds in a unified fashion – are the foundation of this new IT architecture.


Not only has the hybrid cloud changed a company’s approach to deploying new software, but it has also changed the way software is developed and sold from a provider’s perspective.

The provider perspective: Unifying development and operations

Thanks to the hybrid cloud approach, system administrators and developers are sitting side by side in an agile development model known as Development and Operations (DevOps). By increasing collaboration, communication, innovation, and problem resolution, development teams can closely collaborate with system administrators and provide a continuous feedback loop of both sides of the agile methodology.

For example, operations teams can provide feedback on reported software bugs, software support issues, and new feature requests to development teams in real time. Likewise, development teams develop and test new applications with support and maintainability as a key pillar in design.
After seeing the advantages realized by cloud providers that have embraced this approach long ago, other companies that have traditionally separated these two areas are now adopting the DevOps model.

The consumer perspective: Moving to the cloud on its own terms

From the standpoint of the corporate consumer, hybrid cloud deployments bring a number of advantages to an IT organization. Specifically, the hybrid approach allows companies to move some application functionality to the cloud at their own pace.
Many applications naturally lend themselves to public cloud domains given their application and data requirements. For most companies, HR, indirect procurement, travel, and CRM systems are the first to be deployed in a public cloud. This approach eliminates the requirement for building and operating these applications in house while allowing IT areas to take advantage of new features and technologies much faster.

However, there is one challenge consumers need to overcome: The lack of capabilities needed to extend these applications and meet business requirements when the standard offering is often insufficient. Unfortunately, this tempts organizations to create extensive custom applications that replicate information across a variety of systems to meet end user requirements. This development work can offset the cost benefits of the initial cloud application, especially when you consider the upgrades and support required to maintain the application.

What this all means to everyone involved in the hybrid cloud

Given these two perspectives, on-premise software providers are transforming themselves so they can meet the ever-evolving demands of today’s information consumer. In particular, they are preparing for these unique challenges facing customers and creating a smooth journey to a hybrid cloud.

Take SAP, for example. By adopting a DevOps model to break down a huge internal barrier and allowing tighter collaboration, the company has delivered a simpler approach to hybrid cloud deployments through the SAP HANA Cloud Platform for extending applications and SAP HANA Enterprise Cloud for hosting solutions.

Find out how these two innovations can help you implement a robust and secure hybrid cloud solution:
SAP HANA Cloud Platform
SAP HANA Enterprise Cloud


Marty McCormick

About Marty McCormick

Marty McCormick is the Lead Technical Architect, Managed Cloud Delivery, at SAP. He is experienced in a wide range of SAP solutions, including SAP Netweaver SAP Portal, SAP CRM, SAP SRM, SAP MDM, SAP BI, and SAP ERP.

The Future of Cybersecurity: Trust as Competitive Advantage

Justin Somaini and Dan Wellers


The cost of data breaches will reach US$2.1 trillion globally by 2019—nearly four times the cost in 2015.

Cyberattacks could cost up to $90 trillion in net global economic benefits by 2030 if cybersecurity doesn’t keep pace with growing threat levels.

Cyber insurance premiums could increase tenfold to $20 billion annually by 2025.

Cyberattacks are one of the top 10 global risks of highest concern for the next decade.

Companies are collaborating with a wider network of partners, embracing distributed systems, and meeting new demands for 24/7 operations.

But the bad guys are sharing intelligence, harnessing emerging technologies, and working round the clock as well—and companies are giving them plenty of weaknesses to exploit.

  • 33% of companies today are prepared to prevent a worst-case attack.
  • 25% treat cyber risk as a significant corporate risk.
  • 80% fail to assess their customers and suppliers for cyber risk.

The ROI of Zero Trust

Perimeter security will not be enough. As interconnectivity increases so will the adoption of zero-trust networks, which place controls around data assets and increases visibility into how they are used across the digital ecosystem.

A Layered Approach

Companies that embrace trust as a competitive advantage will build robust security on three core tenets:

  • Prevention: Evolving defensive strategies from security policies and educational approaches to access controls
  • Detection: Deploying effective systems for the timely detection and notification of intrusions
  • Reaction: Implementing incident response plans similar to those for other disaster recovery scenarios

They’ll build security into their digital ecosystems at three levels:

  1. Secure products. Security in all applications to protect data and transactions
  2. Secure operations. Hardened systems, patch management, security monitoring, end-to-end incident handling, and a comprehensive cloud-operations security framework
  3. Secure companies. A security-aware workforce, end-to-end physical security, and a thorough business continuity framework

Against Digital Armageddon

Experts warn that the worst-case scenario is a state of perpetual cybercrime and cyber warfare, vulnerable critical infrastructure, and trillions of dollars in losses. A collaborative approach will be critical to combatting this persistent global threat with implications not just for corporate and personal data but also strategy, supply chains, products, and physical operations.

Download the executive brief The Future of Cybersecurity: Trust as Competitive Advantage.



To Get Past Blockchain Hype, We Must Think Differently

Susan Galer

Blockchain hype is reaching fever pitch, making it the perfect time to separate market noise from valid signals. As part of my ongoing conversations about blockchain, I reached out to several experts to find out where companies should consider going from here. Raimund Gross, Solution Architect and Futurist at SAP, acknowledged the challenges of understanding and applying such a complex leading-edge technology as blockchain.

“The people who really get it today are those able to put the hype in perspective with what’s realistically doable in the near future, and what’s unlikely to become a reality any time soon, if ever,” Gross said. “You need to commit the resources and find the right partners to lay the groundwork for success.”

Gross told me one of the biggest problems with blockchain – besides the unproven technology itself – was the mindset shift it demands. “Many people aren’t thinking about decentralized architectures with peer-to-peer networks and mash-ups, which is what blockchain is all about. People struggle because often discussions end up with a centralized approach based on past constructs. It will take training and experience to think decentrally.”

Here are several more perspectives on blockchain beyond the screaming headlines.

How blockchain disrupts insurance, banking

Blockchain has the potential to dramatically disrupt industries because the distributed ledger embeds automatic trust across processes. This changes the role of longstanding intermediaries like insurance companies and banks, essentially restructuring business models for entire industries.

“With the distributed ledger, all of the trusted intelligence related to insuring the risk resides in the cloud, providing everyone with access to the same information,” said Nadine Hoffmann, global solution manager for Innovation at SAP Financial Services. “Payment is automatically triggered when the agreed-upon risk scenario occurs. There are limitations given regulations, but blockchain can open up new services opportunities for established insurers, fintech startups, and even consumer-to-consumer offerings.”

Banks face a similar digitalized transformation. Long built on layers of steps to mitigate risk, blockchain offers the banking industry a network of built-in trust to improve efficiencies along with the customer experience in areas such as cross-border payments, trade settlements for assets, and other contractual and payment processes. What used to take days or even months could be completed in hours.

Finance departments evolve

Another group keenly watching blockchain developments are CFOs. Just as Uber and Airbnb have disrupted transportation and hospitality, blockchain has the potential to change not only the finance department — everything from audits and customs documentation to letters of credit and trade finance – but also the entire company.

“The distributed ledger’s capabilities can automate processes in shared service centers, allowing accountants and other employees in finance to speed up record keeping including proof of payment supporting investigations,” said Georg Koester, senior developer, LoB Finance at the Innovation Center Potsdam. “This lowers costs for the company and improves the customer experience.”

Koester said that embedding blockchain capabilities in software company-wide will also have a tremendous impact on product development, lean supply chain management, and other critical areas of the company.

While financial services dominate blockchain conversations right now, Gross named utilities, healthcare, public sector, real estate, and pretty much any industry as prime candidates for blockchain disruption. “Blockchain is specific to certain business scenarios in any industry,” said Gross. “Every organization can benefit from trust and transparency that mitigates risk and optimizes processes.”

Get started today! Run Live with SAP for Banking. Blast past the hype by attending the SAP Next-Gen Boot Camp on Blockchain in Financial Services and Public Sector event being held April 26-27 in Regensdorf, Switzerland.

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