CEOs view digital transformation as positive - but dramatic
A new survey shows Asia Pacific CEOs see technology as higher priority than their international counterparts, and are bullish about digital transformations benefits to their company’s bottom line.
Gartner’s 2016 CEO survey, which polled nearly 400 chief executives and senior business executives, including 70 in Asia Pacific, shows technology is the second ranked priority for Asia Pacific chief executives, while globally it has fallen slightly down the priority list to number six, despite half of CEOs expecting their industries to be substantially or unrecognisably transformed by digital.
“Asia Pacific chief executives are more aggressive about the external – customer, competition – impact of digital than their global counterparts,” Gartner says.
One third of Asia Pacific chief executives expect digital to create substantial transformation in their enterprise, with nine percent believing they will operate in a new industry by 2020.
When it comes to acquiring the necessary innovation, ‘techquisition’ is becoming an attractive option for Asia Pacific CEOs, Gartner says.
Mark Raskino, Gartner vice president and fellow, says one noticeable trend in this year’s results was the big rise of explicit mentions of the word ‘customer’.
"CEOs seem to be concerned about improving customer service, relationship and satisfaction levels,” Raskino says.
“At the same time, CEOs have become much more concerned about employee issues than a couple of years ago. The emphasis is as much on benefits, retention and training of mainstream staff. It is not constrained only to senior grade 'talent' issues.”
The survey also found that increasing numbers of CEOs are choosing to head up digital change in their business, with digital business now regarded as substantial enough to warrant them leading it personally.
Those not leading it themselves are most likely to delegate to the CIO.
The survey also shows most CEOs see digitalisation as a positive force, rather than a destructive one, and are overall very bullish about the effects the change will bring to the gross profitability of their businesses, with 84% saying they expect higher profit margins.
“One explanation for CEOs' optimistic attitude toward digital change may be because they can see how it helps with the product innovations that matter to customers,” Raskino says.
“We asked CEOs what proportion of the customer perceived value of products and services they think is digital. Thinking about the product features that customers are choosing and believe they are buying, CEOs believe the value percentage is already 30% on average and will rise to 46% by 2019.”