Digital-First CEOs Are Ahead When It Comes To Future-Proofing Businesses
- By CDOTrends editors
- August 22, 2022
Digitalization has been a top priority for CEOs for years, but COVID-19 has pushed many business leaders to rethink their strategies and prioritize digital transformation. Digital-first is now top of mind for CEOs as they look to future-proof their companies and take advantage of digital opportunities.
IDC's latest report, The Digital-First CEO: A Pathfinder for the Digital Business, explores how digital-first CEOs prepare for the next digital transformation era. The next DX era is not about technology but how technology can be used to create new value. As such, it requires a different set of capabilities from CEOs.
According to IDC, digital-first CEOs intend to drive at least half of their income from digital products, services, and experiences by 2027. This is well ahead of the market average of 39%.
A digital business includes automating customer-facing processes and internal operations and providing data-driven products, services, and experiences. In addition, digital businesses need to be able to orchestrate collaboration and innovation among multiple parties, as well as attract and develop a digital workforce.
For example, digital-first CEOs are focusing on digital business models such as digital industry ecosystems (73%), as-a-service consumption (62%), and direct-to-consumer (DTC) (59%). These are all areas where customers are spending more and more money and where there is a significant opportunity for growth.
“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 at IDC Asia/Pacific.
In a previous report, IDC predicted that in 2022, at least half of APAC will run on or be influenced by digital. This suggests there is still significant room for growth in the region, and digital-first CEOs are well-positioned to capitalize on this opportunity.
“For digital-first CEOs, the technology architecture is the business architecture,” says Lawrence Cheok, Associate Research Director for Digital Business research at IDC Asia/Pacific. "These investments are aimed to enable better direct customer relationships, contextual on-demand services, joint value creation through digital ecosystems, and ultimately, a leading digital share of revenue," Cheok added.
In a commentary by analysts from Heidrick and Struggles, they mentioned that a digital-first business must also prioritize culture, as it is one of the key success factors for a company's DX journey. Executives must be able to role model the desired behaviors and create a culture that supports innovation.
"Getting culture right is critical because it is one of the main accelerators of digital transformation and overall organizational performance. Culture has a direct impact on mindsets: good cultures support good mindsets, and harmful cultures can destroy the open mindsets needed for digital transformation," they said.
Image credit: iStockphoto/gorodenkoff