Companies that were early adopters in transformative technologies have already started seeing returns on their investment. Those with mature digitization strategies will derive at least 45% of their revenue from digital-related activities as early as this year, according to a report from IDC. In contrast, those with less than 25% of revenue from DX-related activities will be at a serious disadvantage. Taking a broader city view, IDC predicts that digital transformation will add an estimated USD 9 billion to Hong Kong’s GDP by 2021.
With these kinds of results, it’s easy to understand why the vast majority of large enterprises in the Asia-Pacific region see the need and urgency to implement new technologies. In 2017, about 5% of Hong Kong’s GDP was derived from digital products and services created directly through the use of digital technologies, such as mobility, cloud, Internet of Things (IoT), and artificial intelligence (AI). This is expected to surge to around 60% by 2021.
In a poll by IDC, 92% of companies have indicated that they have allocated staff and budget for digital transformation strategies, and another seven percent plan to do so within a year.
“The state of digital transformation today is one where organizational awareness, competitive urgency, and resource investment are at an all-time high,” IDC said in the study, Digital Transformation: Discover the Right Path to Avoid Hype and Disappointment.
The study reaffirms what has been predicted for years about digital transformation – that if executed properly, the process of digitization places a company on a higher plane of productivity and efficiency. Benefits cited by the study included efficiency and productivity gains, customer experience enhancements, and the creation of new business models and go-to-market strategies to increase competitiveness.
Hong Kong is one of Asia's most dynamic retail markets with well-established retailers. The new generation of retailers understand that to be successful in this era, they need to up the ante and provide a personalized online experience to retain and attract new customers.
Successful DX strategies give organizations a competitive edge in dynamic markets. But to get there, they must figure out how to personalize the customer experience, connect their employees, and give them easy access to digital resources no matter where they are. And companies have to do this while still maintaining security and making the necessary quick adjustments to keep them agile and competitive.
It's far from an easy task, and none of it is possible without a robust, reliable network, which is a crucial prerequisite of successful digitization efforts. An underperforming network prone to interruptions is bound to hinder any digitization efforts – and that's something enterprise decision-makers clearly understand. IDC found that 76% of digital leaders consider network planning and digital strategy planning to be part of the same process. In addition, 70% of digital leaders believe networking capabilities underpin digital transformation initiatives. Customer experience highly depends on the network carrying the data. Hong Kong users have been spoiled with one of the fastest fixed broadband internet speeds in the world at an average speed of 172.67Mbps.
Indeed, the need for enterprises to align network and digital strategies has never been greater. Enterprises looking to leverage digital processes cannot do so without investing in network transformation. For instance, you can make your website look pretty, but if the network is overburdened, causing website transactions to slow to a crawl, customers are bound to give up and leave.
That’s one of the reasons enterprises must invest in a reliable dynamic infrastructure that expands and contracts based on company needs. The same goes for accelerating go-to-market strategies, boosting innovation, and connecting employees securely across different locations. These all require digital services and applications that increase pressure on the network. Without the proper investment, the return may fall short of the organization’s objectives.
Choosing a Partner
While the benefits of digital transformation are understood, implementation requires serious planning. DX is a multi-dimensional endeavor that requires enterprises to make fundamental changes in their processes. Companies have to take into consideration security, expenses, and the complexity of technologies such as software-defined networks (SDN) and network function virtualization (NFV).
For the most part, organizations don't have all the skills in-house to handle all these aspects of digitization – especially considering DX isn't a one-time activity. It is a journey that requires companies to re-evaluate their digital stature and make updates as necessary continuously. But while difficult, digitization efforts aren’t impossible – so long as companies recognize when to ask for help and recognize the right partners who can help them.
Helen Wong, Director, Product & Partner Strategy at Verizon Asia Pacific contributed this article.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends.