SCG Supports Open Innovation through Collaboration with Startups: Driving “Open Innovation” to Serve Customers in the New Normal

SCG has always focused on adopting digital technology to enhance the capability of its organization and has initiated a digital transformation process since 2017 with the objective to become an organization that implements digital technology in every step of its business. SCG has always been prepared to handle new challenges, especially during this past year in which several situations and challenges have urged the organization to transform itself at a faster pace while also driving technological advances and strengthening existing businesses.

This past year, SCG’s AddVentures – the corporate venture arm of SCG which constantly seeks new business opportunities – has continued to invest in four companies as well as one VC fund in the growing technology sector both within and outside of Southeast Asia. The investment arm also manages the “Ignitor” project which connects technology from external startups with different business units in SCG with the aim to enhance the efficiency of the organization while offering an opportunity for startups to become business partners with SCG or companies in the SCG group.

As the COVID-19 crisis posed numerous challenges to various industries and accelerated the changes in customers’ behaviors, SCG sped up the pace of innovation development and ensured that its innovations can better cater to the demands of customers. SCG now focuses on four main themes of innovation that help the organization cope with challenges in the New Normal while opening new doors for opportunities that will arise in 2021 and in the near future.

Collaborating with Startups to Transfer Better and Faster Technology and Innovation to Add Value to SCG Products and Services

For the past three years, AddVentures by SCG has been operating under the vision of “you innovate, we scale” with the aim to promote the capabilities of startups worldwide, elevate the startup ecosystem with its knowledge and networks, as well as expand the customer base in ASEAN countries. The company has invested in 16 startups and 5 VC funds, and in 2020, AddVentures increased funding for 4 startups and 1 VC fund in its portfolio.

Apart from its investment activities, this past year, AddVentures focused on creating new business opportunities for SCG and companies in the group to promote market expansion in the future. Recently, the company partnered with Validus, an SME financing platform with presence in Singapore, Indonesia, and Vietnam, to expand its market in other countries.

Driving Business Growth with Open Innovation

Another key part of SCG’s digital transformation process is “Ignitor” which is a project to create innovation internally with the main objective to adapt practical cutting-edge technology to improve the efficiency of its business process and increase new opportunities to generate income for over 300 companies in SCG group.

Activities initiated under this project included determining existing pain points for each business in the group as well as seeking and building relationships with tech startups worldwide. The project also promoted the use of technology to address real-life issues in every stage from the pilot stage to the expansion stage. For example, Business Process Automation (BPA) technology was adopted to increase the efficiency of internal SCG business units as it decreased the operation time by 70% and enabled employees to use the extra time to improve customer services. Meanwhile, Omni-channel enablement was implemented to enhance customer experience so that customers can visit and buy SCG products seamlessly through both online and offline channels.

In 2020, SCG business units have proposed pain points to the Ignitor project, and from a total of 55 projects, 32 projects have been selected for the team to develop a proof-of-concept (a method to address business issues) which have been implemented among various businesses in the organization. It is projected that the adoption of technology to enhance the efficiency of work processes can generate an additional 1 billion baht in profits within the next three to five years. Moreover, the company will be able to further develop these technologies to cater to the demands of customers.

Preparing for the New Normal

Apart from technological changes, the COVID-19 crisis was another factor that accelerated business transformation in the B2B and B2C sectors and urged SCG to focus on these four main themes to handle this crisis.

  1. New business models SCG now seeks to invest in businesses with a focus on technology and innovation as well as engage them in partnerships and expand business activities together in the region. For example, SCG has joined hands with Janio, a cross-border e-commerce platform to expand its presence in Southeast Asia.
  2. New product developmentInstead of solely relying on internal developments, SCG offers opportunities for startups with interesting ideas to present their businesses so that SCG can jointly develop these ideas into real products and services. SCG also has the capability to conduct market testing and facilitate trade for each region by filing patent applications for startups as well as expanding into Southeast Asia markets.
  3. A shift of customer behaviors Concerns related to the COVID-19 crisis urged customers to select and shop for products through online channels rather than at physical stores. Thus, SCG now uses automatic systems in every channel to offer assistance and create a good shopping experience for customers. At the same time, SCG collected insights through customers’ interactions with bots in order to provide better services.
  4. Business Process Automation (BPA) – Many business units have adopted BPA to simplify complex processes and streamline businesses in order to decrease operation times by 50-70%, lower costs and human errors, as well as increase the quality of service. BPA also allows users to gather accurate insights that can be used to further develop the business system in the future.

Opening New Opportunities through Investments in Open Innovation Space

“In 2021, SCG is determined to create new businesses and transform into an organization that uses advanced technology which has been developed through open innovation,” said Mr. Joshua Pas, Managing Director at AddVentures by SCG. He added that the company will follow its mission statement and concluded that, “We are open to all opportunities and we welcome all kinds of startups – from B2B, industrial, to enterprise – to join us as business partners through the Ignitor project. Moreover, AddVentures is seeking to invest in these startups in the near future.”

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