Even with the massive growth in digital opportunities senior leaders anticipate, the findings suggest most are significantly underestimating the amount of innovation they will need to effectively compete.
According to a new study by Tata Consultancy Services (TCS), innovation was ranked as the most important aspect of organisation culture, followed by (#2) diversity, inclusion and equal opportunity, (#3) quality orientation, and (#4) customer-centricity.
With innovation being ranked the number one priority, the following findings emerged around it:
- By 2025, respondents believe 41% of their revenue will come from new offerings. Within that, leaders expect 44% revenue from new offerings, while followers expect 40%
- The respondents projected that by 2025, 46% of their revenue will come from purely digital products or services. Leaders expect it to be even higher – 56%.
- When asked where they need to more effectively use data, leaders ranked digital marketing campaigns first, followed by sales initiatives, and customer service, suggesting that their companies need to improve the way customer data is used to create demand and improve customer experience.
TCS' global study titled, Where, how and what leaders will compete with in the new decade: findings from the TCS 2021 global leadership study’, is based on a survey of 1,200 CEOs and senior executives, which examines how leaders of large global enterprises in 13 countries around the world have recalibrated their organisational strategies for the next few years, through 2025.
Four key takeaways in Asia Pacific
- Outdated strategic planning still dominates markets in the region; less than 40% of the respondents in Asia Pacific said their firms consider cross-industry “digital ecosystems” when evaluating future business opportunities, including Australia and New Zealand (19%), India (31%) and Singapore (37%), compared to 45% in the survey globally. More than half of the firms plan using the outdated framework of their historical industry boundaries.
- Although firms in APAC tend to assess threats only from within their industry, more than 60% believe their biggest competitor will come from elsewhere, including other industries, digital companies and startups.
- APAC respondents expect more than half of the future revenues to come from businesses in which the firms operate today, including Australia/New Zealand (68%), India and Japan (65%), and China (53%). This could suggest either confidence in their offerings or excessive optimism.
- The subscription-based revenue models in selected markets in Asia Pacific are showing an upward trend to 2025. Respondents in Australia/New Zealand believe that the models will bring in 18% revenue in 2021 and increase to 25% by 2025. In India, firms surveyed currently derive 22% of revenue from this model, and by 2025, it is expected to account for 25%. Singaporean respondents believe the subscription-based revenue will increase from 25% in 2021 to 34% in 2025, and the figures correspond with the upward trend globally (25% in 2021 to 31% in 2025).
What did leaders say about China?
- 60% of Chinese respondents said their company considers cross-industry “digital ecosystems” when evaluating future business opportunities, compared to only 45% in the survey globally. Two in five firms plan using the outdated framework of their historical industry boundaries. Existing sales and marketing capabilities are the top factor for Chinese firms, but they are less concerned with market growth and brand recognition compared to other countries.
- More Chinese respondents said their company cooperates with competitors (73%) than overall survey respondents (51%), yet 17% said they plan to decrease cooperation, compared to 12% overall.
- In improving customer data use, the top Chinese priorities are creating new products and services (67%) and improving marketing and sales (63%).
- By a substantial margin, Chinese respondents said innovation will be the most important aspect of their company culture between now and 2025, followed by customer centricity.
All images / Tata Consultancy Services