Road to Digital Transformation

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IDC Doc. # AP241289IB

IDC InfoBriefOctober 2021

Road to DigitalTransformation:Digital Strategies to TransformYour Business

Industry-Focused Digital Solutions Drive Business Sustainability

This IDC InfoBrief envisions how retail and manufacturing organisations, while balancing performance and sustainability outcomes, can become more resilient and responsive as they seek to address

changing customer demands and preferences through innovative product and services offerings. This document will look specifically at retail and manufacturing use cases, and incorporate case

studies that provide insight into the real benefits achieved by organisations in the region.

Retailers are dealing with increased complexity, driven by the additional processes required to address changing consumer demands and preferences

ASEAN manufacturers are investing in Industry 4.0 capabilities, driven by the need for performance, profitability and sustainability outcomes

The ASEAN retail market is undergoing a digital transformation and retailers are rapidly adopting different technologies to keep up with changing consumer demands and preferences.

Omnichannel presence with touchpoints both online and offline has led to additional layers being added to retail processes. This implies a need for platforms that help access, manage, and forecast across all processes and channels.

The Future of Retail will be driven by connected ecosystems. There are benefits to implementing a platform that not only integrates with existing technologies but also allows for the integration of future capabilities.

Manufacturers are still facing pressures focused on cost reductions, quality improvements, and efficiency, and there is some urgency around new business model development, product innovation, and improvement of environmental sustainability impact in order to increase resilience, seize opportunities, and enable future growth over the coming years.

65% of manufacturers(2) either maintained or grew revenues as a result of digitalisation in 2020. Clearly, there are financial benefits from implementing technologies that enable information integration and provide capabilities that drive agile, integrated operations, with smart facilities that connect factories, warehouses and plants, and build towards the factory of the future.

Executive Summary | Retail | Manufacturing | Essential Guidance

Source: (1) IDC FutureScape: Worldwide Intelligent ERP 2021 Predictions

(2) IDC’s 2021 APeJ Manufacturing Insights Survey, n(ASEAN) = 382

By 2022, 50% of G2000 organisations will have

purchased business applications tailored to industry requirements,

allowing the line-of-business user more flexibility.(1)

Road to Digital Transformation: Digital Strategies to Transform Your BusinessIDC InfoBrief Sponsored by Azentio 2IDC Doc. # AP241289IB

Source: (1) IDC 2021 Future Enterprise Resiliency & Spending Survey, Wave 5, Jun 2021, n(Asia/Pacific Retailers/Wholesalers)=38, *excluding Japan

Digital Transformation: Driven by Changing Consumer Behaviour Retailers are aiming for execution and operational efficiencies to optimize costs and efforts while increasing customer loyaltyAn increasing number of ASEAN retailers are digitally transforming, with 34% of Asia/Pacific* retailers embracing multi-year digital transformation (DX) strategies(1). They are looking towards improved store operations, customer experience, and product merchandising and marketing optimisation as the key areas where they look to overcome challenges.

Business Priorities Core Process Challenges Opportunities

Increasing store-sourced revenuesChanging consumer behaviours have 76% of ASEAN retailers believe that tapping into new revenue opportunities is a key objective

Increasing merchandise and assortment planning accuracyThe changing industry situation and increasing need for accuracy in merchandise/assortment planning is an objective for 51% of ASEAN retailers

Increasing customer loyaltyWith increasing competition and the growth in online retail, maximising loyalty is key for nearly half of ASEAN retailers

76%

51%

47%

Store systems/operations The top core process that can help achieve business objectives is store systems/operations that can be controlled and planned efficiently

Customer experienceCustomer experience across both online and offline is important for increasing revenues and improving customer loyalty

Product merchandising & marketing Ability to identify and plan accurately along with effective execution despite changing supply scenarios

79%

59%

47%

Technologies

• ERP systems

• AI/ML-driven data analytics

• In-store analytics

Outcomes

• Customer loyalty

• Personalization

• Execution efficiency

Only 48% of the retailers in ASEAN use ERP as the primary system of record for inventory



*Phygital: A mix of physical and digital retail. Browsing or shopping in a real-world brick-and-mortar store/along with an online experience. For instance, physical storefronts are used to provide customers with an immersive brand experience and then customers can order products online.

The Future of Retail is Developing Omnichannel EcosystemsSoutheast Asian retailers are adopting digital transformation to achieve omnichannel execution through an online presence, innovative store types like pickup points, dark stores, or curbside delivery, and customised experiences for the customers across channels/platforms.

Advanced data capabilities like social listening and loyalty data are helping with predictive service offerings.

Forecasting through AI/ML enables the provision of a hyper-personalised experience to customers through assortments/promotions.

The increasing number of touchpoints and information gathered leads to the need for customisation/personalisation for customers.

A uniform experience for customers across channels is key to customer satisfaction.

Changing consumer behaviour and the rise of online commerce is shaping the future of retail.

The phygital* shopping experience will change the way stores operate and lead to the rise of newer/innovative store types, leading to more touchpoints and complexity.

Curbside delivery, in-store pickups and pickup points are some examples of newer models which create a seamless experience for the customers.

Retail is a fast-changing industry and capabilities to customise and adapt to those changes quickly is important while implementing technologies.Dynamic Sys

tem

s

Applied In

telli

genc

e

Customer Satisfaction

Mutual Trust

DATA

Conversations Journeys

Satisfaction Experience

Customers

Frictionless Engagement

Lifetime Value

Cont

extu

al Awareness

Pred

icta

ble C

ommunication



*As at 2017, when the implementation took place.

Smart, Flexible Capabilities with Real-time Visibility for Retail SuccessFacilitating real-time access to data across the organisation for accurate, intelligent decision-making and capabilities that allow new technology integration will enable retailers to innovate to stay ahead of future market changes.

Assortment OptimisationAssortment optimisation allows management of the planning, buying, pricing and optimisation of merchandise with speed and accuracy .

Predictive Supply ChainImprove real-time visibility and purchase decisions while reducing the number of touchpoints in the entire supply process and create supply standardisation.

Optimised Promotion Development and DistributionMix of personalised promotions and public campaigns to improve return on promotion investment which then helps increase customer lifetime value and achieve merchandising objectives.

Real-Time Inventory ManagementReal-time visibility to inventory in physical and virtual stores/facilities which improves orders, forecasts and fulfilment levels and, as a result, the return on inventory investment.

Enable future capabilities through emerging technology deployment

Yongsanguan Hypermarket group in ThailandIndustry : Wholesale & RetailNumber of employees* : 100 Locations : 22 retail outlets

Objective : Yongsanguan needed a system that would allow them to manage and monitor the day-to-day store operations with accuracy and in real-time.

Solution : Yongsanguan required a complete solution with the flexibility to manage promotions as well as allow for customisation of the retail module. The retailer finally chose ORION ERP which also had a strong back office system. This allowed them to have an effective solution to streamline their store operations.

Metrics :

23% increase in sales revenue

6% increase in promotions/schemes

adding 3.5% to loyal customer base

97% increase in stock accuracy

The solution allowed the retailer to control the business more effectively and to achieve benefits in the form of real-time Inventory management, supply visibility, detailed and accurate assortment planning, and control on promotions/pricing. O

UTC

OM

ES

AI-Enabled Assortment Planning

Electronic Shelf Labels

Dashboards and Reporting

Mobile Devices

ML-Enabled Forecasting

Self-Checkout Kiosks

AI Content Curation

Cloud/ Industry Cloud



Source: IDC 2021 APeJ Manufacturing Insights Survey, n(ASEAN) = 382

Business Priorities Drive Investments in Industry 4.0 Capabilitiesto Achieve Tangible Business OutcomesASEAN manufacturers, which are digitalising to increase resilience, seize opportunities, and ensure future growth, are investing in technology that drives functional outcomes that impact performance and profitability.

Top Priorities forASEAN Manufacturers

Industry 4.0capabilities drive newbusiness models andrevenue streams

Top 5 Application Investmentsenabling growth and performance for ASEAN manufacturers over the next two years

Driving Business BenefitsASEAN manufacturers are seeing real impact from DX in key areas

What is Industry 4.0? Industry 4.0 is a strategy of operational transformation that brings together technology, process and organisation to deliver extreme efficiency, quality and performance with consideration of implications for people and the planet. It delivers digital innovation through autonomous, data-rich and insight-based operations to improve production performance, seeking the optimal condition of people, products and processes, and driving customer engagement to achieve extreme efficiency, quality and performance.

of ASEAN manufacturers expect digitalisation to grow or maintain organisational revenues in 2021.

87%

85%

82%

80%

85%

80%

80%

Create new revenue streams/business models from fully-digital and digitally-enhanced offerings

Better operational excellence in manufacturing

More focus on product innovation

Increase process automation and reduce task repetition

Manufacturing execution systems (MES)

Enterprise resource planning (ERP)

Manufacturing dashboards, data analytics, and business intelligence (BI) and AI applications

Logistics and supply chain management applications

Sales and operation planning (S&OP)/Integrated business planning (IBP)

Total Supply Chain Orchestration

Manufacturing Operations

Logistics Operations

Procurement & Supplier Management

Sustainability Initiatives

Workforce Management

1

2

3

4

1

2

3

4

5



PERFORMANCE

Industry 4.0 Enables the Future of Manufacturing to Break Through SilosManufacturers should take an integrated information approach focusing on maximising efficiency, quality and performance, with customers at the core.

DIGITAL INNOVATIONAs products morph to integrated product and service “as a service”

offerings, investment supports the innovation process, aligning it with market demands and a better understanding of product

performance, influencing the next generation of products.

OMNIEXPERIENCE CUSTOMER ENGAGEMENTEngage successfully and consistently with the consumer to address the need for varied experiences and transactions when and where the customer wants to engage.

DIGITAL SUPPLY CHAINAddresses supply and demand complexity through multiple tiers both upstream and downstream to customers and now, consumers, requiring closer collaboration with suppliers, more inclusive and faster planning, and smarter logistics.

SMART MANUFACTURINGManufacturers will seek to maximise KPIs including quality, yield, capacity and equipment performance to develop the next generation of connected production capabilities necessary to compete in a digital economy.

NEXT-GENERATION SAFETYBuild on safety priorities through automation and analytics to eliminate variability in safety processes as well as to minimise risk.

CONNECTED ASSETSThe ability to deliver targeted performance and quality outcomes utilising an increasingly connected network of assets throughout the value chain,

increasing effectiveness and enabling new business models.

AGILE, INTEGRATED OPERATIONSManufacturers utilise data to optimise resources and capabilities

and inform decision-making for operational tasks so all employees can achieve operational efficiency and agility.

CONDITION

CUSTOMER ENG

AGEMENTDRIVERS



Building Capabilities Towards the Factory of the FutureManufacturers need to strive towards their vision of the factory of the future by digitalising foundational capabilities that drive agile, integrated operations, with smart facilities that connect factories, warehouses and plants. Upstream and downstream data also need to be part of the decision-making process.

Order FulfilmentInventory distribution planning and execution are optimized wholistically to concurrently improve customer order fulfilment and store inventory service levels.

Real-Time Digital Dashboards and MetricsReal-time digital dashboards and metrics that consider internal and external data feeds to allow the business to see all performance KPIs for operations and integrated suppliers, helping the enterprise understand its supply base.

Predictive MaintenanceAn asset management strategy that incorporates AI/ML to build a predictive model to determine machine failures. Manufacturers can monitor equipment health in real-time and provide higher levels of asset availability. The result is less factory downtime, lower capital appropriation spending, and lower cost of maintenance delivery.

Case Study – Building Data Foundations

Objective : Mega Lifesciences needed to upgrade its legacy ERP system, increase capabilities and reduce the maintenance costs associated with the old system. A new ERP system was required to support the geographical expansion and changing business needs of the organisation.

Solution : Implementation of Orion ERP that included:

• Accounting and finance management to speed up end-of-period closing

• Distribution module to assist requirements across multiple factories and stocking locations across eight countries

• The integration of mobility solutions (tablets) into the sales process

• Sales and customer relationship management modules ensure business processes operate smoothly, from customer requests to distribution

• Report generation

Metrics :

• 80% improvement in ontime delivery accuracy due to forecasting and advanced material planning

• Doubling of daily order processing capability

• 4 working days for MIS reporting versus more than two weeks prior to implementation

Sources: https://orionproductzone.azentio.com/orionerp/uploads/CaseStudy/Mega-WeCare_case%20study.pdfhttps://orionproductzone.azentio.com/orionerp/uploads/CaseStudy/ORION_InterCare-case-study_15-Feb.pdfhttps://www.megawecare.com/maxxcare-unveils-18-8-billion-kyat-yangon-distribution-centerhttps://www.corecommunique.com/3i-infotechs-orion-erp-set-accelerate-growth-enterprises-looking-transform-cloud-digital-offerings/

Mega Lifesciences Pharmaceutical and FMCG manufacturerLocation: Thailand

Case Study – Growing Capabilities

Objective : Intercare sought to upgrade current ERP capabilities to upgrade decision-support intelligence, improve transaction management, and to manage returning merchandise (RMA) & HR.

Solution : Intercare implemented Orion ERP that included:

• Accounting, HR, and financial management

• Manufacturing material requirements planning/master production schedule

• RMA management

• Business intelligence and maintenance

• Reporting and Document management

Metrics :

• 20% drop in receivables’ ageing

• On-time order fulfilment rate was kept above 90% with less than 5% of stockout

• 23% increase in order booking and collections

• 15% drop in time taken for quality control

InterCareHygiene product manufacturerLocation: United Arab Emirates



Intercare improved manufacturing and back office processes, enhanced decision speed and capabilities, and streamlined RMA and rental management. O

UTC

OM

ES

The solution allowed the manufacturer to control the business’ financial and reporting requirements, decreasing data-driven decision time and accelerating the period-end financial closing.O

UTC

OM

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Road to Digital Transformation:Digital Strategies to Transform Your Business

Sources: https://orionproductzone.azentio.com/orionerp/uploads/CaseStudy/Mega-WeCare_case%20study.pdfhttps://orionproductzone.azentio.com/orionerp/uploads/CaseStudy/ORION_InterCare-case-study_15-Feb.pdfhttps://www.megawecare.com/maxxcare-unveils-18-8-billion-kyat-yangon-distribution-centerhttps://www.corecommunique.com/3i-infotechs-orion-erp-set-accelerate-growth-enterprises-looking-transform-cloud-digital-offerings/

IDC Essential Guidance

Guidance for RetailersInvest in retail platforms for successful innovation, customer experience, and omnichannel executionInvest in platforms that can meet today's DX needs and have capabilities to support future DX and innovation needs. IDC research shows that retail organisations that embrace DX are outperforming their peers when it comes to revenue and profitability. Continued investment in platforms will continue this trend for retailers in the long term.

Develop personalised interactions/promotions across online/offline channels for customers using loyalty programsIncreasing the number of touchpoints with consumers has allowed retailers more insight into their customers. Retailers need to harness the power of this data and be able to provide customers with a personalised experience going forward.

GENERAL GUIDANCEBuild a roadmap to prioritise use case implementationPrioritise based on short, medium and long-term organisational objectives. Select use cases that will allow for foundational capabilities to be developed in the near term. These use cases should support strategic technology investments to increase organisational capability over time, ensuring scalability and reducing the need to reinvest when new use cases are implemented.

Guidance for ManufacturersIndustry 4.0 impacts every process in the manufacturing organisationFrom front-office to the shopfloor, consider how enterprise applications, document management and reporting, master data and the Internet of Things will converge to provide business intelligence and robust information flows to support smooth processes.

Streamline and prioritise data creation, integration and analysisEstablish a clear data strategy and process of integration for internal and external data points, including customers, suppliers, and the shopfloor, to gain insights from the overall operations and identify opportunities and areas for optimisation.

Be prepared for changes and disruptions to rolesCareful planning and consideration of transformation steps will help reduce the inevitable speed bumps encountered in the transition to smooth, real-time and automated processes. Supportive leadership, communication, and training will help ease the organisation through these stages.

Leverage partners for digital transformation effortsSeek transformation partners that can assist with identifying use cases that build on technology capabilities and assist in change management as the organisation evolves with the technology implementations.



Message from the Sponsor

Khun Puntip Chaisongkram,Assistant Managing Director,Yongsanguan Group

The implementation was done swiftly & despite the language barriers, the training team from Orion effectively trained our employees to completely utilise the features that were on offer. OrionTM 11j has empowered our company to scale up as per our expectations.

Azentio provides core software to BFSI customers and ERP solutions to SMB enterprises primarily across Middle East and Africa, Asia Pacific, and India. Azentio has over 800 customers in more than 60 countries. It has offices in 9 countries with a strong team of over 2,000 employees. Azentio is committed to partner with its customers globally to transform their business operations through continuous focus on innovation and best-in-class customer service.

Orion ERP is an integrated, cost-effective and cloud-enabled industry solution for growing and mid-sized enterprises. In operation for more than 25 years and serving more than 350 Customers in 50+ countries with Industry Focused vertical solutions on Retail, Manufacturing, Trading & Distribution, Contracting, Auto Dealership Management, Fleet Management, Rental & Leasing, Warehouse Management and Financials.

On the Cloud – Intuitive – Powerful

TM

Orion Retail Orion Manufacturing

On the Cloud – Intuitive – PowerfulOrion ERP

https://orionproductzone.azentio.com/orionerp/hypermarket-supermarket-retail/

https://orionproductzone.azentio.com/orionerp/manufacturing-fb/#keysolution

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Road to Digital Transformation