MCBIS 541/03 Malaysia’s Digital Economy Assignment 1: Strategic E-Business, Cybersecurity & Value Chain Analysis

MCBIS 541/03 Assignment 1

Instructions:

1. Assignment 1 (also known as Course Assessment 1) covers the relevance of topics in Units 1, 2, and 3.
2. The assignment consists of TWO (2) parts. Answer ALL questions from both
3. Assignment 1 carries 100 marks, which is equivalent to 70% of your final semester
4. The whole answers to this Course Assessment 1 should not be longer than 6,000 words excluding references and relevant exhibits.

Evidence of plagiarism or collusion will be taken seriously, and the University regulations will be applied fully. You are advised to be familiar with the

University’s definition of plagiarism and collusion.

Part A (40 marks)

Answer all the questions in this section.

Malaysia’s digital economy revolution in 2025

Digital economy is set to transform economic landscape, driving growth and creating opportunities across industries

AS MALAYSIA embraces a new era of innovation, the digital economy is emerging as

a transformative force poised to reshape the nation’s economic landscape.

With its potential to drive growth, foster resilience and create opportunities, digital

technologies are at the heart of Malaysia’s economic ambitions for 2025.

No Cherry Picking

Commenting on the transformative potential of digital technologies, economist Dr Geoffrey Williams highlighted that the digital economy already contributes 25% of Malaysia’s GDP.

The true driver of its impact lies not just in the sectors producing digital technologies, but in its widespread adoption across all industries.

Williams said it is through e-commerce, e-payments and e-platforms in the gig economy and sharing economy that the impact is most evident.

“Digital technologies serve as an enabler for businesses and innovation,” he told The

Malaysian Reserve (TMR).

Sectors such as services and manufacturing are particularly well-positioned for growth, driven by advances in automation, data analytics and Internet of Things (IoT) technologies. Even agriculture is benefitting from precision farming techniques that optimise resources and improve yields.

Williams stressed that the key to long-term resilience and sustainability lies in the ability of digital technologies to create entirely new opportunities rather than merely replacing existing systems.

According to Williams, digital technologies serve as an enabler for businesses and

innovation (Source: Williams’ LinkedIn)

He argued that all industries in Malaysia stand to gain from digital adoption, cautioning against strategies that focus solely on a few sectors.

“It is a mistake to cherry-pick or try to pick winners. Doing so risks missing broader

opportunities and failing to adapt to rapidly evolving trends,” he said.

This broad-based approach ensures that the benefits of digitalisation are distributed across the economy, maximising its impact.

Efficiency for SMEs

Small and medium enterprises (SMEs), often perceived as vulnerable to barriers such as high costs, lack of expertise and limited digital infrastructure, are better positioned than commonly believed.

High costs, lack of expertise and limited digital infrastructure are not insurmountable challenges for SMEs. Malaysia’s existing frameworks and policies offer substantial support for digital integration.

By adopting digital tools, Williams believed that SMEs can improve efficiency, expand their market presence and compete successfully on both local and global stages.

The rapid rise of e-commerce platforms, digital payment systems and financial technology (fintech) innovations is disrupting traditional business models in sectors such as retail, banking and logistics.

For example, brick-and-mortar stores and conventional banks face increasing competition from online platforms and mobile payment systems, while advancements in logistics and supply chain management are revolutionising how goods are stored, transported and delivered.

Although disruption may pose challenges for certain industries, it is creating significant opportunities for others such as freelancers, gig workers and informal businesses to thrive.

These groups benefit from easier market entry, increased flexibility and broader access to customers.

Consumers, too, are reaping the rewards of a digital economy, enjoying greater convenience, cost savings and an expanded range of products and services, which in turn drives further demand.

Rapid advancements in digital infrastructure, coupled with strategic policymaking, are reshaping the landscape.

“Strategic investment is the cornerstone of the digital transition. It unlocks the full potential of digital technologies and ensures no one is left behind,” Williams said.

To foster this transformation, creating a fertile environment for start-ups and local tech enterprises is crucial. These companies can become key drivers of high-value job creation and economic growth.

Vital Role of Cyber Security

Beyond economic growth, the digital economy offers solutions to pressing societal challenges.

By expanding access to technology and digital skills, gaps in education and employment can be bridged, empowering underserved communities and reducing inequalities.

Additionally, digital tools enhance transparency and efficiency in public services, fostering better governance and an improved quality of life.

The government’s commitment to 5G infrastructure and initiatives like the MyDigital Blueprint is set to further strengthen the nation’s digital ecosystem, ensuring Malaysia remains competitive in a rapidly evolving global landscape.

However, realising these benefits requires a clear and coordinated strategy. Cyber security, in particular, plays a vital role in this ecosystem.

Novem CS co-founder and CEO Murugason R Thangaratnam highlighted that with the rise of cloud computing, artificial intelligence (AI) and IoT, businesses and individuals are more connected than ever.

“In a world where data is king, protecting that data is essential for success, and being cyber secure becomes critical,” he told TMR.

Murugason noted that by 2025, organisations will increasingly rely on robust cybersecurity solutions to safeguard data from breaches, cyberattacks and other malicious threats.

“Data protection is no longer just about preventing hacks but also ensuring compliance with local regulations, such as the Malaysia Cyber Security Act 2024 and the amended Personal Data Protection Act, as well as international standards like the General Data Protection Regulation,” he added.

Establishing trust through robust cybersecurity practices is vital for businesses aiming to retain customer confidence and seize growth opportunities.

In a world where data is king, protecting that data is essential for success, says

Murugason (Source: Murugason’s LinkedIn)

According to Murugason, cyber security is set to evolve from a defensive measure into a strategic driver of business growth.

Organisations that place cyber security at the core of their operations will not only enhance their competitive edge but also unlock significant opportunities in pivotal sectors like fintech, healthcare and e-commerce, where robust security practices are essential for success.

By implementing comprehensive cyber security measures, companies can confidently drive innovation and deliver advanced digital services while minimising risks.

“A robust cyber security framework not only protects data but also acts as a cornerstone for trust,” he emphasised.

Strong cyber security practices build confidence among customers, partners and investors, transforming security into a critical enabler of business success.

As Malaysia continues to strengthen its digital defences, this trust and resilience will firmly establish the nation as a regional leader in the digital economy.

The digital economy’s transformative potential is undeniable, but it comes with substantial cybersecurity challenges. As more businesses and consumers adopt digital technologies, Malaysia’s cyber landscape is evolving rapidly.

Lack of Resources

According to a recent survey by International Data Corp (IDC), phishing is the leading cyber threat, with 54% of organisations ranking it as their primary concern.

Other significant threats include ransomware, unpatched vulnerabilities, identity theft and attacks targeting the IoT.

A survey by Fortinet further highlights the pressing nature of these challenges, emphasising the growing role of AI and automation in addressing security risks.

“Phishing and malware remain the primary attack vectors, alongside SQL (or Structured Query Language) injection, insider threats, and IoT vulnerabilities,” the report noted.

The shift to remote work has also intensified insider threat incidents, with 88% of respondents attributing the increase to factors such as inadequate training and poor communication.

Adding to these challenges is the fact that only 38% of businesses allocate dedicated IT resources for security teams, leaving many organisations vulnerable.

This lack of resources exacerbates the risks introduced by emerging technologies like hybrid work models, AI and IT/OT system convergence.

Moreover, the rapid adoption of cloud technology poses significant hurdles, further complicating the cyber security landscape.

These factors align with the broader evolution of the cyber threat landscape, which brings both unprecedented challenges and opportunities.

With the rise of advanced technologies like AI, IoT and 5G networks, the sophistication and scope of cyberattacks have expanded.

Additionally, quantum computing, robotic process automation and edge computing are accelerating at a pace that introduces new vulnerabilities, making the need for adaptive cyber security measures more critical than ever.

The evolving cyber threat landscape brings both unprecedented challenges and opportunities.

As we enter 2025, businesses must consider adopting emerging cybersecurity technologies and strategies to stay ahead of threats.

The rapid rise of e-commerce creates significant opportunities for gig workers and informal businesses to thrive (pic: TMR)

Emerging Techs

One of the most promising advancements is the integration of blockchain technology in cyber security.

Blockchain’s decentralised nature provides an innovative solution for securing transactions and data, helping to prevent data manipulation, reduce fraud and enhance transparency.

Applications of blockchain are vast, ranging from secure systems for voting and supply chain management to identity verification, all of which will foster greater trust in digital systems.

AI and machine learning (ML) are poised to play transformative roles in the cybersecurity landscape.

AI-powered threat detection and automated response systems are becoming increasingly sophisticated, enabling faster identification of vulnerabilities and real-time mitigation of risks.

However, adversarial AI and ML attacks will pose new challenges, requiring resilient and advanced defences to counteract them.

This resonates with the expanding adoption of zero-trust architecture (ZTA), which is gaining traction as traditional perimeter-based security models prove inadequate.

By implementing ZTA, organisations shift from traditional security approaches to a model designed for modern threats.

Continuous verification ensures that every user, device and system interaction is authenticated in real-time, rather than relying on static, perimeter-based checks.

The principle of “never trust, always verify” creates a dynamic security environment where access is constantly evaluated and adjusted based on the user’s behaviour, device health and location.

This approach is crucial for protecting sensitive data and resources in today’s interconnected digital ecosystems, where threats evolve rapidly, and static defences are no longer sufficient.

Meanwhile the rollout of 5G networks introduces a complex set of security challenges that organisations must proactively address.

“The vast increase in IoT devices connected through 5G creates a larger attack surface for cybercriminals,” Murugason highlighted.

Ensuring the integrity of critical infrastructure, such as healthcare systems, financial networks and public utilities, becomes paramount in this interconnected environment.

Methods like facial recognition and fingerprint scanning are being enhanced with liveness detection and behavioural analytics, creating stronger safeguards against identity spoofing.

Multi-modal biometric authentication, which combines multiple verification techniques, could provide an additional layer of security.

Adhering to stricter privacy regulations will be essential for businesses as data protection laws become more demanding.

Companies must prioritise consumer data privacy and establish effective consent management systems to comply with local and international standards.

According to Murugason, tackling the cyber security skills shortage is crucial. Companies must focus on training programmes, certifications and collaborations with academic institutions to create a skilled workforce.

Concurrently, user-focused security tools and behavioural analytics are key in detecting unusual activity and preventing insider threats, boosting organisational defences against cyberattacks.

By adopting these advanced strategies and leveraging emerging technologies, Malaysia can not only safeguard its digital infrastructure but also establish adaptive cyber security infrastructure.

[Adopted from: Salehuddin, S. (February 11, 2025). Malaysia’s digital economy revolution in 2025. The Malaysian Reserve – Economy section online at: https://themalaysianreserve.com/2025/02/11/malaysias-digital- economy-revolution-in-2025/ , accessed on 28th April 2025. ]

Questions

1. Critically evaluate how Malaysia’s digital economy transformation aligns with strategic e-business applications, with particular emphasis on cybersecurity as a critical enabler. Support your analysis with evidence from the case study.

(15 marks)

2. Analyze how Malaysia’s digital economy transformation aligns with value chain transformation in e-business leverage. Using specific examples from the case study, evaluate their impact on competitive advantage and industry resilience.

(10 marks)

3. Evaluate cybersecurity’s role as a strategic enabler in Malaysia’s digital economy transformation, drawing on evidence from the case study. Analyze key challenges and solutions while demonstrating alignment with national economic and societal objectives.

(15 marks)

Part B (60 marks)

Answer all the questions in this section.

Question 1

A valuable approach to understanding the role of e-commerce in the business landscape is through value chain analysis. The concept of the value chain, introduced by Michael Porter in 1985, consists of a sequence of activities aimed at addressing business needs by adding value or incurring cost at each stage of the process. Choose a specific industry in Malaysia that aligns with your current profession or area of expertise, and explain the value chain framework in the context of that industry. Discuss how the value chain can be strategically utilized to achieve a competitive edge, providing relevant, real-world examples. Particular attention should be given to the application and integration of Information Technology (IT) and/or Information Systems (IS). Including a relevant diagram may further enhance the clarity and depth of your response.

(30 marks)

Question 2

 Information is considered the second most essential resource, after human capital, within any organization. The availability of timely, relevant, and accurate information plays a pivotal role in enhancing a company’s competitive positioning within the marketplace, while also facilitating the efficient management of the four Ms of resources: manpower, machinery, materials, and money. In this context, provide an analysis of the significance of three (3) types of information systems, emphasizing their relevance to functional areas and/or business functions within your workplace or an organization with which you are familiar.

(30 marks)