Dr. Joshua Pas is the Digital Transformation director at the Siam Cement Group (SCG). In 2017, he was assigned to lead the digital transformation effort to accelerate growth and scale up SCG. SCG made a move to corporate ventures by setting up AddVentures by SCG, the corporate venture capital arm that enables SCG to diversify and strengthen its innovation portfolio.
In an era where rapidly changing technologies strongly influence the evolution of consumers' needs and behaviors, it has become vital that major corporations and multinationals respond to this rise in digital transformation. Dr. Pas addressed this issue in his keynote address at Techsauce Global Summit 2017.
Industrial revolution, that is a big word - and if you think back to many years ago, it was a process of building muscle. People used tools to build and make things by hand. For us (SCG), the new industrial revolution is equal to digital transformation. Now we are not building muscle; we are building brains. How do we do things smarter and how do we do things faster? – Dr. Joshua Pas
SCG started their digital journey a year ago, and they needed to convince their executives as to why it was necessary to be done. The following reasons outlined by Dr. Pas are not solely for SCG but can be used by all corporates looking to move towards digital transformation:
Since 1995 there has been a steady wave of destruction, for example, the music industry, video rental, and photography are industries that got disrupted. A little further on in 2010 it was the magazine, travel and TV industries, and more recently it has been banking, retail, healthcare, telco, and the insurance industries. Today, the only certain thing is uncertainty as no one knows what industry will be disrupted next. The best business practice for corporates in the digital age is a digital transformation to ensure survival.
In the beginning, about a decade ago, the unicorn list was sparse - for example, companies like Airbnb and Pinterest were some of the first to make $1 billion USD. However, since 2014, that list has grown exponentially. This growth is due in part to increased access to innovations. If corporates want to be part of the unicorn ecosystem or be ahead of the curve, they need to innovate.
Ten years ago the cost of an industrial drone was $100k, but now it can cost as little as B700. The continued reduction in the cost of technology and digital platforms means more access to digital innovation. Corporates can no longer use cost as an excuse not to digitally transform
Previously, Fortune 500 companies took 20 years to reach unicorn status; now the average time is down to 4.5 years. Some companies have done it even faster, such as Airbnb that did it in two years. There are more technologies out there and more companies that can work with speed and little cost. For corporates to take advantage of speed of growth, digital innovation is important.
All these factors are things that SCG and other corporates can no longer ignore.
For SCG, the definition of digital transformation is digital technologies that can create value by transforming how they capture, process, store, and transmit data. And the steps for doing so are straightforward. Firstly, understand the problems of the customers, pinpointing the emotion of the users. Secondly, doing digital business models such as e-commerce, then platforms, followed by mapping data-to-asset (taking your customer and marketing data and using it to present them with a physical product or service) and lastly, automation. The final step is digital technology, which links everything & helps it to work together.
Dr. Pas listed four technologies as follows:
Dr. Pas further stated that when looking at the ecosystem, no one can do it on their own. The best thing for everyone is open innovation. "Every corporate and startup has expertise, and it is shared expertise. For AddVentures we look at building, buying, partnering, investing and incubating. Furthermore, everyone needs to play to their strengths, for example, most corporates have access to resources, market access across ASEAN and industry experts and corporate functions such as HR, engineering, IT. These are all resources that corporates have to help a startup. Startups, in turn, can assist the corporates with innovation," he concluded.
Finally, what makes the situation a true win-win is that startups are slow to scale as opposed to corporates. Also, startups can help corporates do things faster and be more open to innovation.
Addventures by SCG is one of the newest CVCs on the Southeast Asian startup scene - but one of this year's top two biggest sponsors for Techsauce Global Summit 2017. SCG execs accompanied the Techsauce team on roadshows to many countries in SEA in the months leading up to the Summit. Bringing the motto, "You Innovate, We Scale" and a Scaling Platform to the conference - their actions are proof that they fully believe that with this collaboration between corporates and startups, both will go further than they could alone.