During the summer of 2018, independent research company Vanson Bourne surveyed 4,600 business leaders from mid- to large-size companies across 42 countries and sub-regions to gauge their organizations’ place on the Dell Technologies Digital Transformation (DT) Index.
Vanson Bourne classified businesses’ digital business efforts by examining their IT strategy, workforce transformation initiatives and perceived performance against a core set of digital business attributes.
In Asia Pacific, Japan and Greater China, 1,300 business leaders across 11 countries and regions, including Australia, China mainland, India, Indonesia, Japan, Malaysia, New Zealand, Singapore, South Korea, Taiwan and Thailand, were surveyed.
Just 6% of businesses in the region are considered 'Digital Leaders', according to the latest Dell Technologies DT Index. Emerging markets are also the most digitally mature, with India and Thailand topping the regional ranking.
The DT Index II found that many businesses’ digital transformation programmes are still in their infancy. 84% of business leaders across markets in Asia Pacific, Japan and Greater China admit digital transformation should be more widespread throughout their organization, and close to half (46%) believe they’ll struggle to meet changing customer demands within five years.
More than a third (35%) still worry their organization will be left behind in the race to become a digital entity.
Behind the curve
By comparing the results with the first DT Index launched in 2016, we can see that progress has been slow and the vast majority of organizations in the region still have a long way to go to become 'Digital Leaders'. While the percentage of 'Digital Evaluators' and 'Digital Adopters' has increased, there has only been a 1% increase in the percentage of 'Digital Leaders'. 38% of businesses are still spread across the two least-mature groups on the benchmark: 'Digital Laggards' and 'Digital Followers'.
Amit Midha, President, APJ Commercial, Dell EMC, said:
“In many respects, Asia Pacific, Japan & Greater China is emerging as a source of innovation: in the way it fosters new business models and embraces emerging technologies. This is a tremendous opportunity for the region – but it’s also a determined period in time. To secure their digital future and progress with innovation, businesses must accelerate their transformation – rather than slow down.”
David Webster, President, APJ Enterprise, Dell EMC, added:
“Digital transformation places technology at the heart of an organization’s products and services, to accelerate its business and help transform the customer experience. As such, it requires an equal focus on technology, people and process. Businesses are waking up to this but not in the numbers that we had hoped for by now – despite the high-stakes. Over the next decade, every organization will need to be a digital organization. This can be achieved, if the work starts now.”
Barriers to transformation and confidence
Linked to the meagre number of Digital Leaders, over 9 in 10 (95%) businesses are held back by persistent barriers to transformation.
The top barriers to digital transformation success in the region are data privacy and security concerns – up from fifth place in 2016. Having an ‘immature digital culture’ has risen to fourth place (from seventh place in 2016). And today, more leaders are concerned about regulation and legislative changes than they were two years ago.
The top five barriers to digital transformation success in Asia Pacific, Japan & Greater China are:
- Data privacy and security concerns (up from 5th place in 2016)
- Lack of budget and resources
- Lack of the right inhouse skill-sets and expertise
- Immature digital culture (up from 7th place in 2016)
- Regulation and legislative changes (up from 10th place in 2016)
In addition to mapping businesses’ digital transformation progress, Dell Technologies asked business leaders whether they trust their organizations to govern themselves correctly, protect customer and employee data and be transparent in this rapidly changing digital world.
The research reveals that four in ten (41%) believe their organization will struggle to prove it is trustworthy within the next five years. One-third do not trust their organization to look after employee data (33%) or customer data (35%) and almost three in ten (29%) of Asia Pacific, Japan & Greater China leaders don’t trust their own organizations to comply with regulations (such as GDPR).
The findings suggest that business leaders lack faith in their organization’s ability to be transparent and compliant.
Plans to realize their digital future
On the plus side, leaders have reported common priorities and investments to aid future transformation, including an increased focus on their workforce, security and IT.
However, many of these measures still aren’t ubiquitous. More than half of those in the region (51%) are developing in-house digital skills and talent, for instance by teaching all employees how to code (up from 23% in 2016). While there has been movement, in this digital era, the percentage of companies investing in their digital skills could be higher.
The top planned technology investments for the next one to three years, as identified by the research, are as follows:
- Cybersecurity: 61%
- Internet of Things tech: 53%
- Artificial Intelligence: 50%
- Multi-cloud environment: 47%
- Compute-centric approach: 38%
First published in Enterprise Innovation