APAC companies spending less when it comes to investing in digital initiatives
Only 8% of all respondents have plans in place for ‘Digital Consumer Economy’
AMONG Global 2000 companies, 70% of global corporations surveyed see making major investments in digital initiatives as crucial to their business success this decade.
This sense of urgency is even more pronounced in Asia Pacific than other regions, where nearly a quarter of the companies ranked digital initiatives as not just crucial, but ‘of most importance’ to financial success in the next five years, according to a new Global Trend Study.
However, the current reality shows a steep gap from the widely shared vision of the business imperatives, said Tata Consultancy Services (TCS) which released the report.
Merely 8% of survey participants have plans in place for a path to changing their core business models, products and services, business processes and workplaces amidst the shift to the ‘Digital Consumer Economy,’ TCS said in a statement.
Only one-third said that they are planning to build their strategy by 2020.
Furthermore, Asia Pacific businesses appear to be playing catch-up with the other major regions. In fact, Asia Pacific companies are currently outspent by their counterparts in North America, Europe and Latin America when it comes to investing in digital initiatives, TCS said.
These findings indicate a large number of companies may be at risk of falling behind and losing their competitive edge compared with those that are already placing ‘digital’ at the core of their business today, backed up significantly increased budgets.
TCS’ report, entitled The Road to Reimagination: The State and High Stakes of Digital Initiatives, asked over 800 global corporations about their investment in digital to date, the return on investment they have seen and their expectations for the future.
The study explores how Global 2000 companies are using five transformative technologies – big data and analytics; cloud computing; mobile and pervasive computing; social media; robotics and Artificial Intelligence (AI) – to move towards ‘Digital Reimagination,’ or changing their core business models, products and services, business processes and workplaces.
“The world economy is in the midst of a tectonic shift from the Internet Economy to the Digital Consumer Economy,” said TCS chief executive officer N. Chandrasekaran (pic).
“Individually, these [five key] technologies are undoubtedly powerful but, when combined, they have the potential to fundamentally change how enterprises develop products, market themselves and engage with customers across every major industry,” he said.
With so much at stake, it is vital that businesses focus their activities in this space on the right business objectives, TCS said.
Key findings from the report include:
‘Digital Leaders’ have one plan for the Digital Consumer Economy
Leaders focus their digital efforts on a smaller number of business capabilities, while ‘Followers’ tend to spread their efforts more thinly between many business objectives.
Leaders have achieved superior capabilities in understanding what customers want in three areas:
Identifying customer needs for whole new products or services (61% of Leaders versus 34% of Followers have done so).
Improving demand forecasting (33% versus 18%).
Tailoring offerings to smaller and finer-grained customer segments (30% to 17%).
Leaders are nearly twice as likely as Followers to have already brought a whole new digital offering to market (89% of Leaders have done so versus 48% of Followers).
Digital Leaders are most likely to focus their efforts on using digital technologies to deliver greater insights into customer behaviour and expectations: 74% of Leaders are focused on using digital initiatives to more accurately predict demand for their products or services, with 66% prioritising initiatives that allow them to monitor how customers are using products or services in order to identify the need for new offerings.
Gaining greater insights using big data is also the biggest focus for investments more widely. Businesses expect to spend more of their digital budgets on big data than any other technology. Over the next three years, 28% of all digital investments will be spent on big data technologies compared to 20% on social media, 20% on mobile, 19% on cloud computing and 13% on AI and robotics.
Currently, businesses are relying primarily on mobile apps and social media analysis as sources of data on their customers; both of these technologies are used by 50% of respondents. However, wearable technology is expected to become a major source of customer data with 62% of businesses planning to gather data from wearable digital devices by 2020.
For more on the survey, go here.
It’s a new era: The Digital Industrial Economy, says Gartner
Embrace changing trends or perish, says Gartner
The business of going social
For more technology news and the latest updates, follow us on Twitter, LinkedIn or Like us on Facebook.