OUTLOOK Recent reports indicate that the breakneck growth of the digital transformation space is here to stay, with a projected 23.1% CAGR between 2022 and 20304. With this in mind, we are well positioned to capitalise through our sophisticated IT solutions and our semiconductor manufacturer SilTerra. HOW WE RESPONDED • Continuing to build integrated solutions that leverage digital platforms and technologies • Adopting digital technologies to carry out essential functions across the Group, from customer acquisition to internal communications • Undertaking the digitalisation of our employee management processes, which is ongoing • Establishing strategic partnerships to enhance the reach of our services and solutions across borders • Actively exploring emerging technology products, while investing in the expansion of SilTerra’s production capacity POTENTIAL IMPACT Risks: • With the rise of hybrid work models, some of our employees may opt to pursue alternative career paths, leaving us short of specialised talent • With our employees, suppliers and customers increasingly decentralised, we are at a greater risk of cyber attacks • In rapidly deploying digital platforms and technologies, our cost base has increased, affecting our operating margins in turn Opportunities: • The digital transformation trend has increased demand for our systems integration and consulting services • Increased data traffic has forced operators to strengthen their networks, leading to increased demand for our subsea telco services • The continuing digital transformation trend bodes well for our trade facilitation business, where digital platforms play a central role • The rapid adoption of and investment in technologies such as 5G, IoT and electric vehicles will drive further demand for semiconductors According to a report by McKinsey, the COVID-19 pandemic sped up enterprise digital adoption by several years1, placing businesses in a position where they had to use digital technology in order to stay in touch with others, carry out sales and marketing, and fulfil orders, amongst other key functions. At the same time, individuals became accustomed to using digital technology to perform work and everyday tasks. Now that the world is approaching the endemic stage, many of these established behaviours and preferences look set to remain. Surveys indicate that workers around the world have a preference for hybrid work models2, while demand for transformative technologies such as AI continues to show strength3. DIGITALISATION IMPACTING Capitals Strategic Thrusts M5 Material Matters M7 M12 DAGANG NeXCHANGE BERHAD 52 KEY MARKET TRENDS A. STRATEGIC REVIEW
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