Will Your Business Become Digitally Old-Fashioned?
- By Lachlan Colquhoun
- May 15, 2023
If you were trying to predict the next generation of the Asia Pacific’s unicorn companies with a value of USD1 billion or more, the first place to look would be in the software industry.
According to research from KPMG and HSBC in the joint Emerging Giants in the Asia Pacific report, of around 6500 startup companies identified with valuations of up to USD500 million, 80% were either software or technology platform providers.
This is important not just regionally but also globally. By 2030, the Asia Pacific will likely catch up to North America as the world’s number one home to new startup businesses that become unicorns.
China and India, each home to 30% or more of the companies in the KPMG study, dominate the landscape, followed by Japan, with 12.7% of the startups, and Australia, with 8.7%.
The most common technology themes in the top ten companies identified in the 12 regional markets were decentralized finance, digital twins, AI-drug discovery, blockchain real estate, decentralized autonomous organizations and even the often maligned NFT sector.
Adapting to a changing world
As KPMG’s Darren Yong, the head of client and market development and head of technology, media and telecoms, elaborated at the recent CDOTrends conference in Singapore, these are the companies which the most prominent private equity firms are investing in and the ones most likely to move to significant share market IPOs.
These businesses harnessing frontier technologies are agile and able to adapt quickly in a changing world. Yong told the 6th Chief Digital and Data Officer Asia Summit in Singapore that they will also ignite the future.
Value creation can be exponential because companies that do this can extract up to 50 times more value for the organization
Yong identified the top ten technology trends of the last decade: genetic engineering, blockchain, artificial intelligence, renewable energy, the internet of things, quantum computing, augmented and virtual reality, advanced materials, nanotechnology, and 3D printing. Map these trends against the 6,500 top companies, and significant overlap exists.
Towards future-proofing
Beyond predictions of who will fail or succeed, Yong is more interested in future-proofing the digital enterprise. He laid out the key areas that business leaders need to access and the principles that drive the technology transformation.
He and his colleagues at KPMG had identified eight areas of focus for digital future proofing, five internal and three external.
First on Yong’s checklist were the five internal areas, the first of which is a culture of innovation, where learning and innovation are encouraged and rewarded.
Cross-function collaboration across different departments and investment in employee development were the human focus areas. At the same time, Yong identified the proliferation of agile ways of working to enable a broader cultural shift beyond technology teams.
Go modular
In terms of technology, the advice was to embrace a modular architecture because this enabled scalability and made it easier to adopt new technologies as they emerge.
From the internal, Yong’s presentation moved to external factors, the first of which is understanding and embracing emerging business models. There must be inputs at the leadership level to ensure adjacent business models and the competitive landscape is understood.
Next is to keep up to date with emerging technology trends and align research and development so it can identify new opportunities for innovation. The future-proofed enterprise must align and plan for future capability needs.
The last of the eight focus areas is to create partnerships with technology providers and an ‘ecosystem over a few horizons.’ Through this process, critical criteria are defined to ensure a competitive advantage.
Yong’s message is not just about technology but about how a fully connected enterprise creates more value when business and technology priorities are aligned. The value creation can be exponential because companies that do this can extract up to 50 times more value for the organization.
In technology terms, the critical paths are around emphasizing modularity, prioritizing data architecture, designing an architecture that enables innovation and agile leadership.
Data is critical, but it must be governed effectively, said Yong.
He said that trust is inherently critical in how we manage data because the moment you lose trust, you lose all your customers.
Unsurprisingly, these factors are related and enable each other. Change requires adaptability and a willingness to embrace the new and innovative data-driven organizations that can only execute their vision if they can integrate and deploy new technology.
For this reason, modularity is one of the main drivers because it allows organizations to “plug in” APIs from new collaborators and suppliers and create a dynamic and responsive digital ecosystem.
Lachlan Colquhoun is the Australia and New Zealand correspondent for CDOTrends and the NextGenConnectivity editor. He remains fascinated with how businesses reinvent themselves through digital technology to solve existing issues and change their entire business models. You can reach him at [email protected].
Image credit: iStockphoto/Alessandro Biascioli