According to a new report by Forbes Insights, in association with Hitachi Data Systems (HDS), 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 percent of APAC respondents expect their organizations to undergo vast digital transformation in the next two years, 6 percent more than the global average of 49 percent.
The global study, based on a survey of 573 senior executives worldwide of which 34 percent were from the Asia-Pacific region, as well as on 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,” said Mark Ablett, general manager and senior vice president, Hitachi Data Systems Asia Pacific. “By failing to unlock the potential of data, organizations are falling short of their own transformation.”
The research suggests that those in APAC are 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 percent versus 50 percent 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 percent), along with increasing data and analytics capabilities (65 percent).
Business outcomes need to drive digital transformation (DX): New business models and industry competitors were the top drivers for DX (both at 42 percent), followed by new technologies (38 percent) and customer expectations (33 percent). Ability to innovate was the top measure of DX success, selected by 57 percent of APAC respondents and higher than the global average of 46 percent. This was followed by revenue or margin growth (54 percent in APAC versus 46 percent globally) and cost reduction (49 percent in APAC versus 43 percent 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 percent) see themselves as advanced or leaders in data and analytics, the clear majority (95 percent) have already seen revenue increases due to the use of data and analytics. APAC, once again, was ahead of the pack – 39 percent of respondents have seen an increase of more than 5 percent on revenues thanks to data analytics, compared to 31 percent globally. Only 5 percent of respondents from the region have seen no impact or are unsure of the effects. These findings indicate the clear potential that data analytics present 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 percent) or implementing (also 40 percent) strategy, with the bulk of this work done by IT (57 percent and 59 percent respectively). In APAC, 55 percent of respondents believe that IT is fully ready for digital transformation while only 42 percent 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 percent) and the top contributor to successful digital transformation (54 percent) in the Asia Pacific region. Nearly half (42 percent) of respondents felt top-level executives were the second top contributor to DX success (versus just 29 percent globally). Likewise, ‘Lack of Talent’ was cited as the top challenge to the implementation of DX by APAC respondents (29 percent). 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 the internet of things (IoT) in the region. When asked about the technology focus for digital transformation, 64 percent of respondents in APAC selected cloud as a priority (same as the global average), while 41 percent opted for IoT, which was 10 percent 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 percent of APAC respondents selected IoT technologies, versus the global average of 38 percent.