The CEOS of Digital-First anticipate that by 2027, at least half of their revenue will originate from digital products, services, and experiences; ahead of the market average of 39%, according to the latest report of International Data Corporation (IDC) entitled “The Digital-First CEO: A Pathfinder for the Digital Business”
As a result of their experiences with the COVID-19 pandemic, the CEOS have changed their perspectives on the link between business and technology and how they approach the next digital transformation, moving from scaling digital to operating a profitable digital business.
For IDC, they define 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.
At least half of the Asia/Pacific economy will be based on or influenced by digital in 2022, according to a previous prediction by IDC. The study reveals that digital business models such as industry digital ecosystems (73%), as-a-service consumption (62%), and direct-to-consumer (DTC) (59%) are prioritized by digital-first CEOs in Asia/Pacific including Japan (APJ) as they strive to increase their digital share of revenue and adapt to shifts in consumer spending.
Moreover, the study also shows that digital-first CEOs are focused on critical competencies as important building blocks of a digital organization, including empathic customer experience (CX), digital trust, and a hybrid-first workforce. 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… 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,” ,” says Lawrence Cheok, Associate Research Director for Digital Business research at IDC Asia/Pacific.
After the COVID-19 pandemic, digital has established itself as an ever-changing, permanent part of the world. Hence, any organization that is developing digital-based capabilities to convert into a digital business should adopt a digital-first approach, which is the next development in digital transformation. In line with this, APJ organizations must adopt digital-first approaches as well if they want to dominate the digital economy.
To sum it all, the IDC report looks at the digital-first CEO as pathfinders and offers business executives and technology suppliers insights into how digital-first CEOs invest differently in digital skills and technology.
