Securing legacy in the digital era

In a world where industry disruption is the norm, family businesses in Thailand are aware of the impact of digital technology. But this doesn’t mean they are fully prepared for the transformation. More than half of Thai family businesses (64%) felt vulnerable to digital disruption, 61% of respondents believed that their business is vulnerable to cyberattack, and 46% revealed they will step up their digital capability in the next two years.

There are some common thoughts among Thai leaders regarding how vulnerable they are to digital disruption, and which technologies they need in particular. These emerging technologies have changed customer behaviours and their daily lives. They include artificial intelligence (AI), big data, blockchain with transparency and traceability of materials, Insure Tech, FinTech, robotics, electric vehicles, and self-driving cars.

Also, communication and marketing channels have shifted rapidly to instant communication, droves of data, and demands for transparency. This means customers have many choices for products and services. Their needs and expectations are also much higher, providing challenges and complexities to companies who need to work harder to find a way to meet demands while maximising their sales and revenue at the same time.

This all means that family businesses need to have a vision and think ahead. This is not only preparation to grab business opportunities, but also to plan for the worst. For example, coffee and energy drink companies will be challenged by self-driving cars. This will lower the demand for energy drinks and coffee for those drivers facing long periods behind the steering wheel.

Most Thai family businesses face four main challenges to transform their firms to digital organisations³. First, some family firms are business groups, diversifying their business into several sectors such as telecommunications, food and beverages, and retail. This can reduce conflicts among those members who can run businesses in which they have expertise. However, when there are a lot of product lines in business within a group, it can lead to a lack of clear direction. For example, they cannot decide which businesses within the group should go digital.

Second, normally, Thai companies compete with each other on price rather than quality. Investing large amounts of money in digital technology forces them to raise prices, and this is not a good option for Thai companies.

Third, Thai firms have to bring in more business experts with digital skills from outside the family to help expand the business, balancing the numbers between current and new generations. Finally, businesses may enter areas that are not familiar to family firms. 

_{³Prachachat Turakij}