According to a new report by Forbes Insights, in association with Hitachi Data Systems (HDS), a wholly owned subsidiary of Hitachi Ltd. (TSE:6501) titled “How to Win at Digital Transformation: Insights from a Global Survey of Top Executives,” companies in Asia Pacific are pulling ahead when it comes to the implementation of digital projects. Amongst those surveyed, 55% of APAC respondents expect their organizations to undergo vast digital transformation in the next two years, 6% more than the global average of 49%.
The global study—based on a survey of 573 senior executives worldwide of which 34% were from the Asia-Pacific region, as well as one-on-one conversations with top executives—reveals that, regardless of industry or location, companies are being placed under increasing pressure to transform to keep up with market demands.
“Digital transformation is now essential for corporate survival,” said Bruce Rogers, Chief Insights Officer at Forbes Media. “And it’s more about people and culture—about change management—along with investing in the technology.”
“At the center of transformation is data. It is both the creator and accelerator that has proven to be the currency of IT organizations. By failing to unlock the potential of data, organizations are falling short of their own transformation,” said Mark Ablett, general manager and senior vice president, Hitachi Data Systems Asia Pacific. “Hitachi Data Systems is at the center of this customer transformation and the leader in data strategy, creating opportunities for organizations to manage, govern, mobilize, learn from and ultimately transform insights into actions for business.”
The research suggests that those in APAC seem to be further along the road to digital maturity than their global counterparts, with the transition toward digital maturity pointing to five major steps:
- Make transformation a top strategic priority: The Forbes Insights-Hitachi survey confirms that digital transformation is the top strategic priority in the region (60% versus 50% globally). The strategic emphasis on digital transformation is reinforced by executives’ focus on investment. Investing in new technologies to enable digitization is the joint top investment priority for APAC respondents over the next two years (65%), along with increasing data and analytics capabilities (65%)
- Business outcomes need to drive digital transformation (DX): New business models and industry competitors were the top drivers for DX (both at 42%), followed by new technologies (38%) and customer expectations (33%). Ability to innovate was the top measure of DX success, selected by 57% of APAC respondents and higher than global average of 46%. This was followed by revenue or margin growth (54% in APAC vs 46% globally) and cost reduction (49% in APAC vs 43% globally)
At the same time, there are issues companies still grapple with and must resolve:
- Untapped potential of data and analytics: While less than half of APAC companies (45%) see themselves as advanced or leaders in data and analytics, the clear majority (95%) have already seen revenue increases due to the use of data and analytics. APAC, once again, was ahead of the pack – 39% of respondents have seen an increase of more than 5% on revenues thanks to data analytics, compared to 31% globally. Only 5% of respondents from the region have seen no impact or are unsure of the effects. These findings indicate the clear potential that Data Analytics presents for businesses in 2017
- An enterprise-wide approach to DX needs to be adopted: Currently, cross-functional teams are not involved enough in developing (40%) or implementing (also 40%) strategy, with the bulk of this work done by IT (57% and 59% respectively). 55% respondents in APAC believe that IT is fully ready for digital transformation while only 42% consider other business functions to be fully ready.
- Companies must learn how best to marry technology with human resources: Technology has long been a core focus of DX strategies but, as the research highlights, people also have a big role to play in the APAC region. Technology is seen as one of the top three challenges (26%) and the top contributor to a successful digital transformation (54%) in the Asia Pacific region. Nearly half (42%) of respondents felt top-level executives were the second top contributor to DX success (versus just 29% globally). Likewise, ‘Lack of Talent’ was cited as the top challenge to the implementation of DX by APAC respondents (29%). Companies that wish to succeed, must understand the role that talent and skills play in this new landscape and ensure they have the right people for the job
The findings also point to a growing awareness of cloud and IoT in the region. When asked about the technology focus for Digital Transformation, 64% of respondents in APAC selected cloud as a priority (same as the global average), while 41% opted for IoT, which was 10% more than the global average, making IoT the second most important focus for APAC respondents. In addition to this, when asked about top investment priorities, 45% of APAC respondents selected IoT technologies, versus the global average of 38%.
About this research
This report’s findings are based on responses of 573 C-level executives from North America, Latin America, Europe and Asia-Pacific. They represented enterprises with revenues above US$500 million, with 62% of companies having revenue of more than $1 billion, and 19% with revenues of $10 billion or more. The majority of respondents were chief executive officers (CEO) (23%), chief technology officers (20%), chief information officers (15%), and chief financial officers (7%), and all were involved in the planning or implementing of digital transformation in their organizations. Respondents represented a wide range of industries, including technology and services (20%), telecommunications (10%), financial services (14%), and healthcare (10%).
The report also includes econometric research, conducted by the Department of Business Technology, University of Miami, in association with Forbes Insights. This research examined the relationship between increasing technology expenditures during the last recession (2007 through 2009) and an increased compound annual growth rate (CAGR) during economic recovery (2010 through 2015). It is based on the analysis of 99 of the world’s biggest companies. In APAC, companies that prioritized technology spend during recession experienced 86% greater revenue growth during the recovery, which is significantly higher than the global average of 61%.
About Forbes Insights
Forbes Insights is the strategic research and thought leadership practice of Forbes Media, a global media, branding and technology company whose combined platforms reach nearly 75 million business decision makers worldwide on a monthly basis. By leveraging proprietary databases of senior-level executives in the Forbes community, Forbes Insights conducts research on a wide range of topics to position brands as thought leaders and drive stakeholder engagement. Research findings are delivered through a variety of digital, print and live executions, and amplified across Forbes’ social and media platforms