The region’s digital transformation leadership is lagging behind now, but by 2022 the tables will turn, says an EY report …
In a dynamic business environment, it doesn’t matter whether the disruption is a global health pandemic or new competition, bushfires or Brexit. Agile, adaptable businesses with advanced digital capabilities are best positioned to weather any storm – and create long term value.
This is the opinion of Steve Bingham, EY Asia-Pacific’s Technology Consulting Leader, in a recent report on technology and transformation. The report found that half of APAC technology leaders felt they were at an advanced stage of the digital transformation (DX) journey.
In spite of this, the report listed six distinct habits of successful digital transformation leaders, and reached the conclusion that these habits will place Asia-Pacific at the top of the DX rankings within two years.
Six habits of DX leaders
In its preamble, the study listed the four key drivers of digital transformation growth in APAC region: customer obsession; investments in AI, cloud and innovation; and plugging the skills gap. From the survey results, in-depth analysis discerned six habits of DX leaders that improved overall financial performance and offered a roadmap to success for the region’s digital laggards.
The report asserts that APAC companies can expect accelerated digital transformation and leaders are 45% more likely to unlock annual revenue growth of more than 10% with these habits. It is important to remember that there are many factors that impact companies’ financial performance, but EY’s research showed that leaders tend to outperform laggards across a range of financial measures.
- Focusing on customers first and foremost: DX leaders focus more on internal goals when thinking about transformation, rather than external pressures such as ‘appetite to move to adjacent sectors’ (17%) or ‘pressure from investors/shareholders’ (16%).
- Leaders made big bets on AI in the last two years: Leaders outpaced laggards when it came to generating positive impact across tech outcomes, getting better results from their AI investments overall.
- Driving innovation through ecosystems and partnerships: Leaders saw the positive results of partnerships, but were not immune to cultural issues weighing on partnership opportunities. Almost half (45%) of digital transformation leaders worried that innovative partnerships will harm their organization’s culture.
- Nurturing talent with new incentives and strategies: Leaders knew the negative effect a growing skills gap can have on their industry. Leaders outpaced laggards in all methods to try and plug the skills gap, while 7% of laggards did not attempt to solve the issue.
- Activating governance plans for emerging tech: More than half (58%) of leaders had a mature approach to governing emerging tech compared to just 20% of laggards. The majority of laggards had only just begun to think about governance for emerging technology.
- Powering innovation by leveraging data and being agile: Almost all leaders used data to speed up innovation. Laggards were behind on every method used to reduce time-to-innovation (leveraging data and analytics insights, streamlining management hierarchy, deploying agile methodologies, re-engineering and automating processes, bringing disparate expertise together quickly).
Bingham concludes: “At EY we know that technology is a key enabler of transformation. Disruption won’t slow digital transformation. Instead, leaders understand they must redouble their efforts to unlock long term value.”