Singapore, 21 November 2023 -- A new IBM-sponsored study* by IDC of 600 companies across 17 industries in Asia Pacific (AP) found the key success metrics that leading corporations driving value from their digital investments are using. According to IDC InfoBrief, “Charting the Journey to Value: Harnessing Technologies for Sustainable and Resilient Growth”, #AP242447IB, November 2023, only six percent of those organisations surveyed across Australia, China, India, Indonesia, Korea and Singapore, are in the most mature, transformational stage, and effectively measure business value across a broad spectrum of dimensions, including financial, ecosystem and sustainability indicators. 

These companies, classified as “Leaders”, harness various technologies to drive continuous innovation across products, services and new business models, differentiating themselves and driving sustainable and resilient growth. 

In contrast, “Followers” tend to prioritise short-term internal financial goals. Some 71% of organisations surveyed in AP, at the less mature foundational and tactical stages, have more narrowly defined, internally focused metrics – predominantly financial. The digital investments of these Followers also tend to be equally narrowly focused. 

From an industry perspective, the banking, financial services, and insurance (BFSI) industries are at the forefront of driving transformational value. With the emergence of open banking, fintech and the increasingly competitive environment, BFSI organisations have been stepping up to revitalise their value chains, enhance product offerings, and elevate customer service platforms. Next on the maturity scale are the retail, hospitality and wholesale industries. 

Daniel-Joe Jimenez, Vice President, Digital Innovation, Software and Channels, DNB/SMBs, CX Research of IDC Asia/Pacific, said, “In today’s digital world, relying solely on financial gains is no longer sufficient to capture the holistic impact and significance of an organisation’s ongoing activities. The technologies and processes that businesses deploy are so tightly linked to those of their customers and markets that the boundary between the internal operations of the enterprise and its external ecosystem (such as customers, markets, and partners) is blurring. 

“To succeed, business and IT leaders must collaboratively create transformational value by leveraging digital technologies alongside organisational, customer, and operational innovations, fostering new ways of operating that lead to resilient and sustainable growth.”

According to IDC FutureScape: Worldwide Customer Experience 2023 Predictions — Asia Pacific (Excluding Japan) Implications, by 2024, at least 35% of Asia-based organisations will adopt new success metrics to track and measure customer value creation’s internal and external workflows. The IDC InfoBrief further elaborates that to participate and compete effectively in an increasingly interconnected world, organisations must embrace the triple bottom line of people, planet and profit: integrating social, environmental, and economic considerations into the company’s culture and decision-making processes can unlock new growth opportunities and achieve transformative value. 

Lula Mohanty, Managing Partner, IBM Consulting APAC, said: “The IDC InfoBrief and FutureScape report reinforce what business leaders have told us consistently: CEOs are making decisions faster than ever in a world that has moved beyond looking solely at shareholder value to include factors such as sustainability, cybersecurity, diversity, equity, ethics, and inclusion. 

“IBM sponsored the creation of the Asia Pacific Business Value Council, led by IDC, as well as the InfoBrief, to expand the conversation around what value means to corporations in APAC and identify opportunities to take intentional, data-driven action in this age of AI for business.” 

Additional insights from the InfoBrief 

According to the IDC InfoBrief, the journey to transformational value is an evolutionary path across six dimensions: Strategy and Governance; Customer Experience; Continuous Innovation; Operations; Work; and Technologies. 

The strategy-execution gap hinders progress 

Forty-eight percent (48%) of those surveyed are in the more mature categories for strategy and governance, with a centralised strategy and an integrated technology roadmap to attain value. 

However, while the strategies and programmes may be in place, execution is still lacking. The most commonly cited challenges are: 

• technology architecture to support rapid business changes (46%); and 

• applying traditional approaches that do not permit agility and adaptability (41%). 

The biggest opportunities lie in continuous innovation 

Within the six value dimensions, continuous innovation recorded the lowest scores among

both Leaders and Followers. Forty-eight percent (48%) of organisations surveyed are at the foundational stage. The top challenges in this dimension are: 

• limited skills and capabilities (49%), a key obstacle identified by 53% of followers and 40% of Leaders

• scaling digital innovation efforts (48%).

Not being able to scale digital innovation challenges Leaders (56%) and Followers (45%) in Asia Pacific. This is due to a fragmented technology architecture, which hinders their adaptability to rapid changes and progress in digital innovation. Followers, in particular, lack systematic processes to drive continuous innovation, resulting in uncoordinated investments and siloed islands of innovations using different technology platforms.

One characteristic that sets Leaders apart is how they use technology for value-based innovation (40%). They are intent on creating and capturing value through digital innovation efforts instead of driving digital innovation. 

Customer Experience (CX) is of paramount importance

In an era where a customer’s last best experience sets the bar and minimum expectations for the next experience, CX makes a significant difference. Some 73% of AP organisations are in the early stages of delivering consistent CX value.

• Both Leaders (40%) and Followers (40%) said they need a comprehensive definition or strategy for CX. This could indicate coordination gaps among chief marketing officers, LOB managers, and back-office staff. 
• Leaders (46%) and Followers (42%) are hindered most by ineffective customer feedback mechanisms. Leaders cite the “Absence of adequate feedback loops to act on data, hindering the ability to execute/intervene,” while Followers seek “effective technologies and capabilities to measure and drive CX”. 

Key traits of Leaders

• While most organisations prioritise driving customer satisfaction and experiences, leaders are strongly focused on driving value — not only financial aspects but also meeting ESG/sustainability goals (36%). In contrast, the latter (ESG/sustainability) is not a priority for followers.
   
• Leaders have a stronger focus on value-based innovation (40%). These companies harness various technologies to drive innovation across products, services and new business models, differentiating themselves and driving sustainable and resilient growth. In contrast, followers tend to prioritise short-term internal financial goals.

• 46% of leaders prioritise data and analytics technologies such as AI, cognitive, data governance and data integration to improve and attain business value. Automation technologies (39%) and security, risk and compliance (34%) are key priority investments for the next 18 months.

For more insights from the InfoBrief, please visit https://ibm.biz/BdSa5T. 
 

Survey Methodology

IBM commissioned an IDC survey of large organisations across 17 industries and six countries in the Asia Pacific region. The 600 organisations – 100 each from Singapore, Australia, Korea, China, India and Indonesia -- were benchmarked according to IDC’s Journey to Value framework in six key areas: strategy and governance, customer experience, innovation, operations, workforce, and technology. 

The Journey to Value framework defines four stages of maturity: Foundational, Tactical, Integrated, and Transformation.

There are four stages in the IDC Journey to Value Maturity Framework: 

• Stage 1 Foundational; 
• Stage 2 Tactical; 
• Stage 3 Integrated; 

• Stage 4 Transformational. 

“Leaders” are defined as those at Stages 3 and 4. Followers are in Stages 1 and 2. 

Perspectives from the AP Business Value Council Executive Committee members
The Asia Pacific Business Value Council separates reality from hype and aims to turn aspiration into action, focusing on topics such as generative AI; balancing sustainability and profit, building future skills, and supercharging the customer experience. The Council’s mission is to help senior business leaders drive transformational value from digital investments. Led by IDC and sponsored by IBM, the Council is fueled by a group of trailblazers who collaborate with IDC and IBM to shape the executive committee. 

“It is important that the transformation be executed with a business lens and be very purposeful. It should be about solving a business problem or providing deep insights to the business so that work can be executed in a smarter and quicker way.” - May Yap, Senior Vice President and Chief Information Officer, Jabil.

“Technology can do great things if we put empathy and humanity at the center of innovation and progress.” – Indra Utoyo, President Director, Allo Bank Indonesia.

“It’s about platform, process, people—our platform’s flexibility in pushing APIs to partners and our ability to launch digital services quickly; our focus on streamlined processes for speed to market, aiming for ‘plug and play’ simplicity to empower both our employees and customers, making life simple for all.” – Ritesh Singh, Director & Chief Commercial Officer, Indosat. 

“At HSBC, our values guide us in all our actions – from strategic decisions to day-to-day interactions with customers and each other. Rooted in HSBC’s history, heritage and character, our values help us deliver on our purpose for over 150 years – to open up a world of opportunities for our customers and overcoming the challenges along the way in our transformation journey.” - Tancy Tan, Chief Operating Officer, HSBC Singapore.

“Managing a product that’s cheaper than water on per ton basis, is no easy feat, especially in the midst of increasingly frequent global shocks. When it comes to cement, it’s all about remaining hyper-focused on cost, efficiency, and people.” - E.R. Raj Narayanan, Business Head & Chief Manufacturing Officer, UltraTech Cement.

About IBM

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