A new breed of digital-first CEOs has emerged
Digital-first CEOs plan to drive at least half of their income from digital products, services, and experience by 2027, ahead of the market average of 39 per cent. Driven by their experiences from the COVID-19 pandemic, these business leaders have changed how they think about the relationship between business and technology, and in how they approach the next digital transformation (DX) era – from scaling digital to running a viable digital business.
IDC defines a digital business as value creation based on digital technology, which entails:
- Automated customer-facing processes and internal operations.
- Provisioning and delivery of data-driven products, services, and experiences.
- Multi-party orchestration of ecosystem collaboration, co-creation, and co-innovation.
- Attraction, augmentation, and continuous development of a digital workforce.
“A new breed of digital-first CEOs has emerged. We expect to see CEOs strategically use technology to compete and stay relevant to their customers, ecosystems, and employees, with the goal of increasing their digital share of revenue,” says Linus Lai, Chief Analyst and Digital Business Research Lead, IDC Asia/Pacific.
IDC earlier predicted that in 2022 at least half of the Asia/Pacific economy will be based on or influenced by digital. As digital-first CEOs in Asia/Pacific including Japan (APJ) aspire to increase their digital share of revenue, the study shows that they are prioritizing digital business models such as industry digital ecosystems (73 per cent), as-a-service consumption (62 per cent), and direct-to-consumer (DTC) (59 per cent) to respond to shifts toward digital in customer spending and continue participation in the digital economy.
The study also shows that digital-first CEOs are focusing on essential capabilities such as empathetic customer experience (CX), digital trust, and a hybrid-first workforce as key building blocks of a digital business. This includes technology investments in CX applications, security tools, business process automation (BPA), artificial intelligence (AI), and employee experience (EX).
“For digital-first CEOs, the technology architecture is the business architecture,” says Lawrence Cheok, Associate Research Director for Digital Business research at IDC Asia/Pacific. “These investments are aimed to better enable direct customer relationships, contextual on-demand services, joint value creation through digital ecosystems, and ultimately, a leading digital share of revenue,” Cheok adds.
As APJ organizations aim to take pole positions in the digital economy – one where digital IS the business, they must embrace digital-first approaches. Coming out of the COVID-19 pandemic, digital has become a permanent, yet dynamic fixture of our world. Digital-first represents the next evolution in digital transformation and a digital-first approach applies to any organization that are developing digital-based capabilities to become a digital business.
IDC Future Enterprise Awards (FEA) recognizes and celebrates leading organizations that are using technology to shape and lead in the digital economy. In its 6th year, the award categories and selection criteria reflect how organizations can successfully bring their businesses into the future. Featuring nine digital-first building blocks – including Future of Customer Experience, Future of Digital Innovation, Future of Work, and Future of Trust – these are the new organizational benchmarks to become tomorrow’s digital business and Future Enterprise.
“Every year we see better nominations that address not just an innovation agenda but the organizational and operating dimensions that allow making these changes happen throughout the enterprise,” ends Linus Lai.
In tandem, IDC’s Asia Pacific Digital Business Strategies service looks at the organizational transformation in their use of digital technologies to run a viable digital business. By examining organizations’ maturity, market trends, competitive landscape, and end-user buying behaviour, the research looks at the impact of digital businesses on people/skills, processes, and technology. This service analyses the necessary changes required across culture, leadership, business, and IT functions, providing actionable recommendations on how to thrive in the digital economy.