The ten member countries of the Association of Southeast Asian Nations (ASEAN) are steadily moving towards the vision of a truly integrated ASEAN Economic Community (AEC) by 2015. The ultimate goal is to transform ASEAN into a unified trade and investment bloc, with free movement of goods, services, investment, labor and capital, thereby making development more equitable among neighboring countries, improving the region’s competitiveness (especially versus the larger economies of India and China) and better preparing for a more integrated global economy.
The road will not be easy for the member countries of Singapore, Brunei, Malaysia, Indonesia, Thailand, Philippines, Cambodia, Myanmar, Laos and Vietnam. The region is home to over 600 million people of widely diverse racial, cultural and political backgrounds in countries of varying states of economic development, regulatory environments and infrastructure development. Regardless of these challenges, leaders of the ASEAN member states are confident that the 2015 goal can be achieved. Already 77.5% of the measures under the AEC blueprint have been completed, with significant progress across sectors as of March 2013.
With the AEC imminent, many companies in the region have realized that although an integrated economy offers a lot of opportunities over the long term, it also brings risk and disruptive change in the short term. The lowering of trade barriers and tariffs may create a more competitive environment for local players as nimble new entrants or well capitalized multinationals enter the market. The move by ASEAN countries to band together also presents the specter of retaliation by the trading superpowers in the region, which have taken measures against some member states already.
No matter the ultimate outcome, companies should start investing in areas that can help them become more competitive. An obvious area is technology. The ability of companies to effectively collect, manage and use technology solutions and platforms to their advantage has never been more important in a fast-paced, connected and increasingly digital environment. Unfortunately, information systems—to track customers, vendors and transactions or to orchestrate complicated supply chains—have been traditionally expensive to deploy, complex to manage and often not designed to meet the unique needs of businesses in the region.
The advent of cloud computing—specifically cloud business software that can be accessed and used as a service such as that offered by NetSuite—can change all that. The cloud eliminates IT complexity and the cost of maintaining and upgrading multiple business applications and the underlying infrastructure. The multitenant architecture that characterizes true cloud-based systems allows greater economies of scale, thereby reducing total cost of ownership and making cloud software more accessible and economical for capital-constrained companies, especially in emerging markets.
Another benefit of the cloud is that companies can dynamically scale up or scale down their application and infrastructure demands when needed. All of this allows companies to be more active and agile to pursue strategic objectives, and respond faster to changes in the market and changing customer requirements.
One more benefit is that because cloud-based applications such as NetSuite are completely web-based, they can be accessed from anywhere with Internet access, by anyone with the right authorization. In NetSuite, data can not only be shared with employees, but even with partners, such as resellers or suppliers. Furthermore, NetSuite’s role-based design ensures that only the information relevant to them and which they have permission to access is shown.
The NetSuite OneWorld multi-subsidiary solution is ready for international business, with support for global management including multiple languages (including English, Thai and Chinese), more than 190 currencies and tax regimes (VAT, GST and withholding tax). This makes OneWorld a great fit for companies in ASEAN with its challenging geography (southeast Asia is largely made up of peninsulas, archipelagos and islands surrounded by the Indian and Pacific Oceans), myriad languages and cultures, and different political and regulatory structures.
As the region transitions to becoming an integrated market by 2015, companies operating in these countries are well advised to take advantage of whatever can help them gain a competitive advantage in what will certainly be a more competitive market. Investing in information systems such as NetSuite, which is a true cloud-based system and is ready to meet the unique needs of companies in the region, will certainly help.
- Jan Alvin Pabellon, Principal Product Manager for Asia-Pacific and Japan, NetSuite