Regional Focus: Accenture's View From... South Korea
The Accenture 'view from' series of blogs will take us to a different country each month, giving a light but enlightening insight into those markets' characteristics and daily challenges when it comes to implementing mobility across enterprises.
Highly Advanced Infrastructure with Superfast Connectivity
South Korea has the most advanced communications infrastructure in the world, with 105% broadband penetration, Fibre to the Home for 60% of subscribers, and speeds of up to 10Mbps on wireless, and 1Gbps on fixed lines.
To put this into context, in May this year the UK's average residential broadband speed was 17.8Mbps. Last month, one of South Korea's mobile network operators launched the world's first 300Mbps 4G service, and this is just one example of innovation in the communications infrastructure here.
It may surprise some to hear that, despite this infrastructure and the development of many devices by local companies such as LG and Samsung, there is not more than a 67% penetration rate of smartphones among consumers. While this puts us ahead of the rest of the world, it is only slightly ahead of the latest US figures.
Part of the reason for this is cultural and generational - many of the older generation are only just starting to adopt smartphones in place of their feature phones, and often parents prefer to buy their children more simple devices in order that they spend less time gaming, and more time communicating.
Such an infrastructure does enable true mobility, and particularly in Korean cities almost everyone is constantly connecting to 4G, streaming and downloading video content continuously as they travel on the subway or sit watching the latest match in the park. Increasingly in South Korea, we're also seeing a real growth in the trend of social commerce. There's an impatience bred by availability; for example, if someone sees a recommendation on mobile messenger KakaoTalk, the number one mobile app here, then they might choose to purchase that item immediately.
By 2016, it's expected that the eCommerce market in South Korea will be worth US$23.7 billion, and shopping on mobiles is already worth nearly $3 billion as companies begin to address the needs, and exceed the expectations of their consumers.
While consumers are used to using their smartphones for anything and everything, device trends in South Korea are a little different to what we see in other developed markets. Tablet devices are not that popular here yet, but 'phablets', with 6-7 inch screens are extremely widespread. This may change as we see the development of some new, advanced tablet devices, but I expect that it will be the enterprise which drives this change in the consumer market - the reverse of the trends that we're used to seeing in the mobile device marketplace as enterprises normally fight to keep up with consumerisation.
For example, we're starting to see the banking sector in South Korea adopting mobility tools for salesforce automation. With a rise in mobile and online banking, many retail banks are looking to reduce branch numbers while offering an enhanced customer service, so we're seeing tablets start to be utilised in this context. The use of tablets running specialised applications by a mobile salesforce means that customers can receive visits at a location of their choice, and bank employees have all the information for selling, cross-selling and up-selling at their fingertips when they get there.
The Gap between Consumer and Enterprise Mobility
Despite all the innovation we've seen in communications infrastructure and consumer use of mobility, companies in South Korea tend to be relatively conservative when it comes to the uptake of new technologies, preferring to see them implemented successfully elsewhere before taking any risk themselves.
As a result, and as shown in the Accenture Mobility Insights Report released earlier this year, businesses in South Korea are making much slower progress towards their mobility goals than those in other markets. When it came to using mobility to improve management-decision making and approval capabilities, only 5% claimed extensive progress, compared to a global average of 17%. When using mobility to empower workers to communicate and collaborate from any location or any device, only 7% have made extensive progress, compared to an average of more than double that (15%).
Consumer mobility tools are used in enterprises in South Korea, not least through BYOD which is widespread here (there are few qualms about downloading employees' security software onto a personal device), but almost solely for the use of email and communication apps. Email itself isn't used as much as it once was though, as the messenger services everyone uses in their personal lives have proved themselves very effective for quick status checks on the move, or for communicating with teams based across different locations.
At this point in time, these basic functions of Enterprise Mobility are really what the majority of enterprises here have in place, although I foresee that changing over the coming years as we start to see examples of highly successful Enterprise Mobility case studies from companies around the world.
The next steps that Korea needs to take to embrace Enterprise Mobility will include extending functionality into enterprise processes. Frankly, we are behind other developed markets in terms of being able to submit expenses or timesheets on the move, or uploading reports from out in the field and having access to documents as and when we need them. There's a way to go for streamlining our technologies across channels in the enterprise, and with the best communications infrastructure in the world, there's a real opportunity to take advantage of mobility in a much more advanced way than we see happening now.
Digital Technologies Make First Mover Advantage More Important than Ever
Around the world, companies are going through a digital transformation, with business models changing and rapid advances being made purely through the implementation of technologies such as big data analytics and mobility.
The infrastructure in South Korea is more than ready to take advantage of this, and the opportunity to implement the Industrial Internet could change the way our businesses operate. For consumers, the Internet of Things is already growing, with 'connected homes' providing, for example, seamless experiences between mobile devices and televisions. However, in industry, intelligent connectivity between sensors and devices is just beginning, and South Korea has made the least progress in the world on this.
According to our research, only 4% of respondents claimed they have made extensive progress in improving asset reliability and maintenance through the deployment of sensors and other mobile technologies. Japan, the country closest to us in those results, saw more than double that figure making extensive progress, and the global average was 17%.
Whoever moves first in Korea in terms of adopting digital and implementing aspects of the Industrial Internet - which I believe will mark a turning point for us - is going to see real first mover advantage, and we have started to have conversations with companies who are beginning to realise how it could help to transform their businesses, and add value against low-cost competing markets such as China.
Over the coming months, I'm looking forward to a number of conversations with South Korean businesses that point to cost savings made, new revenue streams created and business models transformed as a result of mobility and other digital technologies being put to use, and I believe that it's going to be the Internet of Things for consumers and the Industrial Internet for enterprises that will force us to at least get up to speed with the rest of the developed world in terms of Enterprise Mobility.
Main Image Source: getintravel.com