SAFEGUARDING DATA IN M’SIA’S NEW ERA OF E-INVOICING

Vast potential: Digitalisation boosts growth and efficiency, but adopting strong cybersecurity measures and secure software can protect data, systems and customers. Image: Blake Wisz / Unsplashed

AS THE roll out for Malaysia’s e-invoicing mandate draws near, small businesses around the country are embarking on their digital transformation journeys.

In doing so, they unlock numerous benefits such as increased efficiency and productivity and improved customer engagement, while becoming more competitive and resilient.

This digital shift however, can also introduce significant data and security risks.

Understanding these risks is crucial to protect businesses, their data and their customers.

Data breaches and other online crimes, including hacking and financial fraud, can have disastrous effects on businesses, such as the exposure of sensitive customer information, intellectual property theft and the disruption of business operations.

These breaches in security can result in significant losses for companies, sometimes amounting to millions of ringgit.

Additionally, small businesses, often the targets of cyber-attacks because they are seen as more vulnerable, may lose valuable consumer trust and potential opportunities.

Ahead of the phased mandate launch in August, business owners can ensure they are fully prepared by understanding the key advantages and risks of e-invoicing, and take proactive measures to safeguard their business.

Security first: Cyber threats are increasingly complex and widespread. Small businesses can protect sensitive data by choosing reputable software with strong security.

Security benefits and e-invoicing considerations

Despite the risks, the shift towards e-invoicing is certain to offer businesses numerous immediate and tangible benefits.

Enhanced efficiency, reduced errors and improved transparency in financial transactions make e-invoicing more secure than manual handling and traditional invoicing practices.

With oversight from the Malaysia Digital Economy Corporation (MDEC), e-invoicing is tracked through the Peppol framework and verified in real-time, providing an additional layer of security and accountability.

Verification through Peppol ensures that invoices are authentic, preventing fraud and alterations.

This standardised network facilitates the secure and efficient exchange of electronic documents, protecting them from cyberattacks and potential data breaches.

Choose a reputable software provider

As Malaysian businesses look to adopt solutions that will enable them to comply with the upcoming mandate, prioritising reputable software providers to ensure data, privacy and security protection cannot be overstated.

In today’s digital landscape, cyber threats are pervasive and increasingly sophisticated, targeting vulnerabilities in businesses of all sizes.

By choosing established software providers known for robust security measures, small businesses can protect sensitive customer information and internal data from breaches and theft.

Reliable software providers offer regular updates, advanced encryption and compliance with regulatory standards, ensuring that businesses remain resilient against evolving cyber threats.

Additionally, this proactive approach fosters customer trust, as clients are more likely to engage with businesses that prioritise their privacy and data security.

Xero, for example, adheres to stringent security standards and compliance requirements to effectively safeguard user data.

By incorporating multi-factor authentication (MFA), user accounts and financial data remain secure and protected while Xero’s encryption protocols prevent unauthorised data access, safeguarding it from cyber threats.

With a global presence, including in countries such as the United Kingdom, United States, Singapore, Australia and New Zealand, Xero maintains a high level of cybersecurity features and compliance measures to meet regional and international standards.

The accounting platform currently supports many local businesses in streamlining processes and improving data security.

Additional precautions

In addition to leveraging the security features of cloud accounting software like Xero, Malaysian businesses can take extra precautions to safeguard their accounting data. This includes:

> Paying attention to security notices: staying informed about security alerts and notices from software providers to promptly address emerging threats.

> Reporting unusual activity: encouraging employees to report any suspicious or unusual activity related to accounting data to prevent potential security breaches.

> Deploying antivirus and anti-malware solutions: installing reputable antivirus and anti-malware software on their devices to protect against potentially malicious software.

There is no question that digitalisation presents enormous opportunities for growth and efficiency for small businesses, but with that, come some critical security risks.

By adopting cybersecurity measures and choosing software with robust protection features, small businesses can safeguard their data, systems and customers.

Proactive security management not only protects against financial losses and reputational damage but also builds trust with customers, fostering long-term business success.

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E-invoicing system set to go

PETALING JAYA: With two days to go, most of the 5,000 companies under Phase 1 of the e-invoicing rollout are raring to go and looking at a smooth takeoff, say stakeholders.

Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong said these companies, with an annual turnover of RM100mil and above, should not face any major hiccups when transitioning to e-invoicing on Thursday.

“They will be able to cope with the transition as these companies have the resources to do so,” he said when contacted yesterday about worries some businesses have expressed about beginning the e-invoicing process.

Asked if accounting firms acting for these companies are facing pressure in switching to e-invoicing, Koong, who is a practising auditor and licensed tax agent, said that it is unlikely.

ALSO READ: How e-invoicing affects you

“There is some misunderstanding that e-invoicing is like the Goods and Services Tax (GST), which required some companies to change their entire accounting system.

This is not the case with e-invoicing because companies are already generating invoices through email and their existing computing systems. The only difference is that their invoices will now be digitised and linked to the Inland Revenue Board (LHDN),” he added.

Koong also said that it is quite normal for businesses to express worries whenever a new system is introduced, like mobile phone and QR code payments, for instance.

ALSO READ:‘There’s time for smaller companies to learn the new system’

“There would have been a lot of complaints prior to the Covid-19 pandemic (in 2020) if businesses had been asked if ewallets could be used to make payments. They were practically non-existent.

“But nowadays such payments are widely accepted even among smaller businesses and hawkers,” he said.

Experts say the pandemic greatly sped up digital payments globally, as, for a few years, people were living mostly online.

ALSO READ:LHDN announces six-month grace period for einvoicing implementation

When it comes to e-invoicing, the driving force is efficiency in collecting taxes and stopping leakages to increase the government’s tax revenue. To further ensure a smooth transition, Koong said the LHDN has announced some flexibility and relaxation of e-invoicing regulations.

For instance, there will be no prosecution action under Section 120 of the Income Tax Act 1967 for non-compliance with e-invoicing rules, provided the business complies with consolidated e-invoicing requirements.

This means the supplier can gather all statements or bills issued and then issue a consolidated einvoice as proof of the supplier’s income, according to einvoicemalaysia.my.

ALSO READ:Are you ready for e-invoicing starting Aug 1?

Koong added that the LHDN is planning to roll out an e-invoicing mobile app and e-POS (electronic point-of-sale) system by the end of this year, free of charge for businesses to download.

Phase 2 of the e-invoicing system will be implemented on Jan 1, 2025, for companies with a turnover of below RM100mil and up to RM25mil, while full implementation under Phase 3 will begin on July 1, 2025, for businesses with an annual turnover of above RM150,000.

Malay Chamber of Commerce Malaysia secretary-general Ahmad Yazid Othman said most Phase 1 companies are ready, although some may still be facing some difficulties, especially smaller businesses that serve the larger companies under the Aug 1 rollout.

He added that companies are expecting to run into teething problems just as they did when the GST was first implemented in April 2015.

ALSO READ:The e-invoicing dilemma

“The LHDN has given its assurance of some flexibility and relaxation of regulations during the initial implementation period, and this is most welcome.

“We hope that companies will not delay implementing e-invoicing with these assurances, which will at the same time motivate other companies to speed up the transition process when their turn comes,” he said.

Ahmad Yazid, who is also a senior fellow with the Malay Economic Action Council, said the experience gained from Phase 1 of the e-invoicing process will be helpful for both the LHDN and businesses to better prepare for the coming phases next year.

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Related stories:

How e-invoicing affects you

‘There’s time for smaller companies to learn the new system’

LHDN announces six-month grace period for einvoicing implementation

Are you ready for e-invoicing starting Aug 1?

Microenterprises unprepared for e-invoicing, says Wee

The e-invoicing dilemma

Navigating e-Invoicing for SMEs

Over 5,000 applications for MyInvois access ahead of Aug 1 rollout, says LHDN

New accounting software not needed for e-invoicing

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Planned e-invoicing will be troublesome

The e-invoice conundrum dilemma

Backups are lifeline to your digital lifestyle

Celebrate World Backup Day this Sunday by creating backup copies of your essential data to safeguard your digital lifestyle against potential loss. — Image by freepik 

It is said that memories you make are priceless, but in this digital age, our data, whether text, audio, or video, has become equally invaluable.

And its value is not lost to cybercriminals, as data breaches have become so common that protecting personal information has become an ongoing challenge for individuals and organisations alike.

Last year, cybersecurity firm Sophos reported that over 90% of cyberattacks reported by its customers involved data or credential theft.

But hackers are not the only threat to your data – the device holding your information may suffer a hardware failure, be stolen, or even be destroyed in an incident such as a fire or flood.

Despite happening over two decades ago, the near loss of Pixar’s Toy Story 2 assets due to accidental deletion during the 1990s remains a memorable story.

The studio was “saved” by Galyn Susman, a supervising technical director who had been working from home after childbirth and had a remote backup.

Even though much of the film was eventually remade due to quality concerns, the character models and environments from her backup were integral to the final film.

Arina hopes that as awareness increases and user-friendly backup options become more widely available, more people will incorporate backups into their digital routines. — Image by rawpixel.com on Freepik

Last year’s layoff of Susman, along with 74 other employees, struck a chord with fans who remember her as the person who saved Toy Story 2.

As we approach World Backup Day this Sunday, March 31, it’s crucial to remember that although incidents of data loss might seem distant, nobody is immune to such occurrences.

Data dilemmas and disasters

Head of operations at Lucid Analytica, an analytics consultancy, Firdaus Jefri experienced data loss for the first time during his childhood when the hard drive of the family computer failed, resulting in the loss of numerous personal files.

“When my first PC, which I had as a kid, crashed due to a hard drive failure, it was devastating. I had important family photos, videos, and memories stored on it. I also made some great friends while playing games like Runescape and Halo Combat Evolved.

“Unfortunately, as a kid, I didn’t keep track of my passwords and didn’t know how to recover my accounts, losing contact with most of them,” he says.

He adds that his mother’s work documents were lost as well, though they weren’t devastating since she had hard copies on hand, requiring extra effort to recreate everything on a computer.

Cloud storage services can be set up to back up files from a mobile device or a PC, but it’s important to maintain enough free space. — Image by rawpixel.com on Freepik

Fast forward to today, and Firdaus has become a staunch believer in backups, having invested a significant amount into a self-built networked-attached storage (NAS) solution.

He estimates that he has spent approximately RM10,000 on storage for multiple drives totalling 20TB, with each drive serving as a backup for another. This setup enables him to recover data in the event that one drive fails.

Firdaus describes his solution as overkill for most users, though it’s a necessity for him, as his work involved handling large files.

When studying for his PhD, computer system engineer Lee Yang Yang was shocked to witness a fellow student fail his course due to losing his files just before the thesis submission deadline.

In Lee’s experience, users typically only begin to prioritise the security of their files after a personal encounter with data loss.

“If you think a file is important, back it up. It is worth your money to have the extra storage. This would include private and confidential files that could cost you a fortune or even your job if the data is lost,” he says.

Better safe than sorry

While data recovery programs and services (read “Get Your Data Back”, StarLifestyle, May 29, 2023; online at bit.ly/datalostandfound) are available that could help restore lost files, the costs involved are steep.

Sin says that having a comprehensive backup strategy is crucial for recovering from such incidents, likening it to 'insurance' for digital assets. — Synology Malaysia

According to Jason Sin, Malaysia country manager for Synology, a company that specialises in NAS storage, the substantial price tag doesn’t guarantee complete data retrieval.

To save oneself from the headache and hefty fees involved in recovering lost files, it’s best to have a backup system in place.

Nur Arina Ramlee, chief technology officer at Cybersolution Technologies, stresses the value of having proper backups.

“Unfortunately, typically, users do not regularly backup their data as often as they should. Usually, this comes down to a few key elements.

“Many users underestimate how upsetting data loss may be when it occurs to them or believe it only happens to other people.

“People are sometimes discouraged from starting because they believe that creating backups is complicated and time-consuming,” she says.

Arina hopes that as awareness increases and user-friendly backup options become more widely available, more people will incorporate backups into their digital routines.

She recalls an incident involving a restaurant, which was exploring franchising opportunities at the time. The restaurant owner had stored all the key components of the company, including financial records, designs for its franchising plan, and even his beloved recipes – which he spent years perfecting and digitising – on a laptop.

That laptop was stolen at an airport during a business trip, resulting in the loss of years’ worth of data.

The rise of ransomware is another threat to data. In a ransomware attack, the files on a computer system are encrypted, in most cases rendering them unusable, with the threat actor demanding a ransom payment to decrypt the data.

Sin says that having a comprehensive backup strategy is crucial for recovering from such incidents, likening it to ‘insurance’ for digital assets.

Arina recommends a straightforward approach to backup by starting with identifying the data crucial to your daily digital activities. — Cybersolution Technologies

“Ensuring data security and continuity is paramount for users and businesses alike.

“Creating a backup strategy is like providing a safety net, allowing users to restore their data to a previous state and resume normal operations swiftly.

“As digital lifestyles become more prevalent, the potential impact of data loss on both personal and professional fronts has heightened, underscoring the importance of robust backup practices,” he says.

As for companies, Sin highlights cost concerns and limited resources as major reasons why small- and medium-sized businesses (SMBs) often neglect backing up their data.

This is due in part to hardware, software and maintenance costs, along with the lack of a dedicated IT team to manage backup infrastructure. Time constraints, data fragmentation, and the need to evaluate security risks are other factors that can also hinder efforts.

In the long run, such neglect can make it significantly more difficult for a company to recover from cybersecurity incidents such as data breaches and ransomware attacks.

Sin highlighted that the Personal Data Protection Department (PDPD) reported a staggering increase in data breach cases. It received 130 reports by June 2023, a four-fold increase compared to the entire year 2022.

“Such breaches lead to significant financial losses due to causes like configuration errors, hardware damage, data leaks, and malicious encryption,” he says.

Seeking simple solutions

According to a report from data recovery service provider Reno Research Lab, over half of data loss cases in 2023 resulted from user error, primarily accidental deletion (56.38%), with drive corruption coming a distant second, accounting for only 18.09%.

These incidents could have been avoided if users simply made one backup copy.

According to a report from data recovery service provider Reno Research Lab, over half of data loss cases in 2023 resulted from user error, primarily accidental deletion (56.38%), with drive corruption coming a distant second, accounting for only 18.09%. — Photo by Markus Spiske on Unsplash

Fortunately, thanks to the widespread availability of free cloud storage, hefty investments are often unnecessary.

Popular and easy-to-setup options that offer free storage space include Google Drive, Microsoft OneDrive and Apple iCloud.

However, without a subscription, the free storage is limited, with Google Drive offering 15GB for free, while both OneDrive and iCloud provide only 5GB each at no cost.

The cloud storage services can be set up to back up files from a mobile device or a PC, but it’s important to maintain enough free space.

The services provide a range of subscription packages with different storage spaces, with family options typically offering better value for money.

To backup your PC with OneDrive’s desktop client, access the settings menu and navigate to the “Sync and Backup” tab.

From there, select “Manage Backup” to choose which folders, such as Documents, Pictures, Desktop, Music, and Videos to back up.

Unfortunately, OneDrive doesn’t support custom folders for backup, so users have to move their files to one of the listed folders.

Android smartphone users can check out Google Drive for backups. It can be turned on by going to the settings menu and selecting “Backup and reset” and then switching on the “Backup by Google One” option.

This feature automatically backs up various types of data, including apps, SMS and MMS, call history, and device settings when connected to WiFi.

However, remember to manually enable backup for photos and videos in this menu, as it is turned off by default.

For faster access and complete control over your backups, consider using a NAS (network-attached storage) device. It’s a dedicated storage server that connects to your home WiFi network.

It also provides a centralised location to store and access files and data from multiple devices, such as computers, smartphones, and tablets, over the network.

Essentially, it functions as a personal cloud storage solution, offering other features like file sharing, media streaming, and remote access.

However, NAS devices, which come in various configurations and storage capacities, are not cheap.

Those who are more technically inclined could opt to assemble their own unit, but this will require researching various topics and familiarity with terminologies like RAID (redundant array of independent disks) and learning NAS-specific operating systems like TrueNAS and Unraid.

However, if you’re seeking a robust backup plan, consider adopting the popular 3-2-1 backup principle.

It’s a straightforward rule – though very demanding – that is designed to ensure that your data stays safe no matter what happens.

Let’s break it down: “3” stands for having at least three copies of your data; “2” means storing them on two different types of media; and “1” emphasises keeping one copy offsite or on the cloud. This method ensures that your data is well-protected against accidents, hardware failures, and other unexpected events.

Arina recommends beginning with a simple approach: identify the data essential to your daily digital life, such as chat messages, pictures, and documents.

“The key to this is to back up regularly or set your backups to run automatically. Some applications that users use daily may already have this readily integrated into their cloud accounts.

“And remember to test your backups once in a while to ensure they work when needed,” she says.

Sin emphasises the importance of education and awareness in establishing a strong backup culture.

“We encourage everyone to share the significance of backups with friends, family, and colleagues,” says Sin, “in order to collectively cultivate a more secure digital environment.”

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Demystifying the property market overhang

AN account­ant, who is tasked with pre­par­ing the books of a cor­por­ate, will always be guided by account­ing prin­ciples when it comes to how the fin­an­cial state­ments of the com­pany are presen­ted on an annual basis to ensure they are accur­ate and reflect­ive of the com­pany’s busi­ness affairs.

An aud­itor, look­ing at the same pre­pared accounts, will run through the num­bers and audit the key mater­ial items to ensure they are reas­on­able, reflect­ive of the com­pany’s fin­ances, and free from mater­ial mis­state­ments, includ­ing due to fraud or error, or applic­a­tion of wrong account­ing treat­ment.

In fin­an­cial state­ments, two of the most crit­ical items are receiv­ables and invent­or­ies.

In order to have proper account­ing treat­ment, account­ants and aud­it­ors used account­ing the­or­ies to describe what is deemed to be cur­rent, and those that have a longer-dated age­ing pro­file are either impaired or writ­ten off.

The reason for this is to ensure that the fin­an­cial state­ments reflect the status of a cor­por­a­tion’s cur­rent assets and are in no way doubt­ful.

There is also an applic­a­tion of gen­eral pro­vi­sion or spe­cific pro­vi­sion when it comes to how these bal­ances ought to be treated in the fin­an­cial state­ments.

Often, we see cases of over-inflated bal­ances and when it came to the crunch of the mat­ter, the man­age­ment would have no choice but to write them off.

The ‘real’ over­hang

At the recently con­cluded 15th Malay­sian Prop­erty Sum­mit 2023, the Dir­ector of the National Prop­erty Inform­a­tion Centre (Napic) presen­ted a paper on the status of the Malay­sian prop­erty mar­ket up to the third quarter of last year (3Q22), with some data points related to the per­form­ance of the mar­ket up to Novem­ber 2022.

The full mar­ket report is only expec­ted to be released in the middle of next month, where Napic will not only provide the usual annual update of the mar­ket’s per­form­ance but also provide more insight into some of the key data points that have been much dis­cussed among all stake­hold­ers, of which, one of them is the status of over­hang in the mar­ket.

As we are aware, the res­id­en­tial over­hang at the end of 3Q22 stood at 29,535 units worth some Rm19.95bil.

Napic’s web­site also provided the details of where these over­hang prop­er­ties are loc­ated and the three key states – Johor, Selangor, and Pen­ang – are the main hot­spots, account­ing for some 14,956 units or just over half of the coun­try’s total over­hang.

In terms of the type of prop­er­ties, the 3Q22 data showed that high-rises com­prise 18,962 units or 64.2% of the total over­hang.

In terms of price points, 23.8% of the total over­hang was priced at RM300,000 and below, 29.5% was priced between RM300,001 and RM500,000, 31.6% was priced between RM500,001 and Rm1mil and the bal­ance was priced above Rm1mil.

In terms of the total value, the res­id­en­tial over­hang is skewed towards the high-end seg­ment with prop­er­ties worth more than Rm1mil account­ing for 43.4% of the total over­hang value, while those priced between RM500,001 and Rm1mil accoun­ted for 31.9% of the total over­hang.

Prop­er­ties priced between RM301,000 and RM500,000 have a total over­hang value of just Rm3.5bil, while prop­er­ties priced below RM300,000 are worth some Rm1.39bil. These two rep­res­ent some 24.8% of the total over­hang value.

For the ser­vice apart­ments, the total over­hang in units stood at 23,688 worth some Rm20.21bil as at end of 3Q22, with Johor alone account­ing for 62.4% of the total.

Most of these over­hangs in the seg­ment are prop­er­ties priced between RM500,001 and Rm1mil, which accoun­ted for two-thirds of the total unit num­bers and 58.9% in value of the total over­hang.

For the longest time, Napic had not shared with the stake­hold­ers the key under­ly­ing age­ing pro­file of this over­hang, and that has led to a mis­lead­ing status of the mar­ket’s over­hang status. It was indeed an eye-opener to see what the real over­hang has been.

For example, as seen in Table 1, the key over­hang is prop­er­ties (both res­id­en­tial and ser­vice apart­ments across the four key states) that have been part of the stat­ist­ics for the last five years and they account for between 51% and 93% of the total over­hang units.

For example, as seen in Table 1, the key over­hang is prop­er­ties (both res­id­en­tial and ser­vice apart­ments across the four key states) that have been part of the stat­ist­ics for the last five years and they account for between 51% and 93% of the total over­hang units.

In total, these prop­er­ties accoun­ted for a whop­ping 75.7% of the mar­ket’s over­hang status while prop­er­ties that have been in the mar­ket for the last three years are just over 5% from the key states.

Spe­cific men­tion must also be made on ser­vice apart­ments loc­ated in Johor, and those that are in the five to 10 years bucket, as they account for 26% of the total mar­ket over­hang.

In terms of prices, most of the over­hang is seen in the same five to 10 years bucket across the board and they alone account for 71% of the total over­hang prop­er­ties in the mar­ket.

As seen in Table 2, prop­er­ties below three years account for less than 5% of the total mar­ket over­hang. Spe­cific men­tion must also be made on ser­vice apart­ments that are in the RM500,001 to Rm1mil bracket and are in the five to 10 years bucket as they account for 25% of the total mar­ket over­hang.

In the cor­por­ate world, when one is up against data that is dis­tort­ing the real pic­ture, the proper thing to do is to see whether the data is still rel­ev­ant or oth­er­wise.

Clearly, look­ing at the age­ing pro­file of the prop­erty over­hang, those above five years will likely remain unsold for a fore­see­able future, mainly due to either being wrongly loc­ated and without the proper or good infra­struc­ture to sup­port com­munity liv­ing, or untouched by prop­erty buy­ers for simply being too expens­ive, espe­cially those bey­ond the RM500,000 price threshold.

Clearly, look­ing at the age­ing pro­file of the prop­erty over­hang, those above five years will likely remain unsold for a fore­see­able future, mainly due to either being wrongly loc­ated and without the proper or good infra­struc­ture to sup­port com­munity liv­ing, or untouched by prop­erty buy­ers for simply being too expens­ive, espe­cially those bey­ond the RM500,000 price threshold.

Hav­ing iden­ti­fied the issues, reg­u­lat­ors and prop­erty developers would need to come out with strategies to address them and to attract buy­ers to these prop­er­ties via a rehab­il­it­a­tion exer­cise and with a sig­ni­fic­ant price reduc­tion.

The bot­tom line is to remove them from the over­hang data.

Let’s call a spade a spade

So what is Malay­sia’s real over­hang? Based on the data presen­ted by Napic, one can take com­fort that over­hang is not as ser­i­ous as it is made out to be mainly due to a lack of data and proper ana­lysis in terms of what is real over­hang pre­vi­ously.

While those more than three years but less than five years are part of stat­ist­ics, we should redefine them as core over­hang while those bey­ond five years can be redefined as hard­core over­hang.

As we have been able to slice and dice these num­bers, the real over­hang is only per­haps less than 5% of the mar­ket in terms of the num­ber of units and value.

Napic could also help stake­hold­ers to under­stand bet­ter the prop­erty mar­ket data bet­ter by break­ing down the data points as an over­hang that is mainly due to gov­ern­ment hous­ing schemes and those that are privately built.

In this way, we could also see whether the gov­ern­ment’s inter­ven­tion is needed to boost demand for these obscurely loc­ated prop­er­ties.

For the private developers, most of these invent­or­ies would have been impaired as the like­li­hood of the assets being real­ised in full value or even at 50% to 60% of the mar­ket value is seen as low.

Private developers too ought to think out­side of the box on how to over­come the prop­erty invent­or­ies sit­ting in their books as being part of the stat­ist­ics only res­ults in paint­ing the wrong pic­ture for the prop­erty mar­ket as a whole.

By Pankaj C. kumar is a long-time invest­ment ana­lyst. the views expressed here are the writer’s own. 

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The game-changing trends: social media, cloud, big data in information technology

Information technology players believe Malaysia is beginning to tap into the potential of the Internet of things.

KUALA LUMPUR: Social media, the cloud and big data will be the game-changing trends that will transform Malaysia’s information and communications technology (ICT) industry and spur further growth of the Internet of Things (IoT) next year, says industry players.

National ICT Association of Malaysia (Pikom) chairman Cheah Kok Hoong said Malaysia had started to tap into the rapidly growing potential of IoT, which could be a new economy by itself covering business areas such as embedded device manufacturing, connectivity infrastructure and application deployments.

He said the trend would provide a new opportunity to position the country as the hub for regional IoT innovation projects in South-East Asia.

However, companies would be increasingly challenged by new factors on the back of business agility that came with mobility, security, analytics, and miniaturisation of devices and millennial generation aspirations, he told Bernama.

“Adoption of cloud solutions will also move from conceptual to the practical stage.

“As predicted by International Data Corp’s global market intelligence, Malaysia’s big data market is anticipated to hit not less than RM75mil but many businesses have yet to consider big data as a big business for their organisation and it thus remains at a tactical level,” he added.

IT spending registered significant growth as reflected in the growth of value-added services, which are expected to grow about 13.6% in 2014 to RM68bil from RM59.8bil in 2013.

Cheah said the overall ICT services sector was also projected to grow at 12.7% in 2015 to RM77.7bil.

Meanwhile, CA Technologies South Asia vice-president Chua I. Pin said the country was entering an era where IT had become the central source of revenue for businesses.

He said 2015 would see a shift in the way businesses structured themselves, looking for new engagement and revenue opportunities using connected devices, big data and analytics, and underpinning these new models would be a fundamental shift in the way software is developed and deployed.

“Software will continue to become the primary way that consumers interact with businesses, which would evolve dramatically in 2015 as businesses become more competitive to reach out to their clients, and we will see apps shifting from simply helping people make decisions to being able to predict what people need,” he said.

Cheah added that with the need for more sophistication in the ICT industry, human capital remained the main challenge in the industry towards achieving high-income nation status.

There is a persistent and widening gap of remuneration packages for ICT professionals between Malaysia and neighbouring countries such as Vietnam and Thailand, coupled with the declining number of ICT graduates, he said.

He said although the new trends such as big data and social media had created many new job functions in high demand, the nation still faced a lack of skilled talent in the market. — Bernama

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