The McKinsey Global survey, "Bullish on digital", was conducted in April this year with 850 C-level executives including 93 from Asia-Pacific (excluding China and India), representing a full range of industries, regions, and company sizes. Respondents were asked about five digital-enterprise trends, including big data and advanced analytics, digital engagement of customers, digital engagement of employees and external partners, automation, and digital innovation.
Overall, the survey showed increasing investment in digital programmes globally, with one-third of respondents in Asia-Pacific expected share of total cost base dedicated to digital-business initiatives would increase 3 per cent or more in current budget year.
More than 40 per cent of respondents said each of the five trends in the survey is a top-10 corporate priority, and at least one in five executives said each trend is a top-three corporate priority. Digital engagement of customers was given the highest priority, with 56 per cent saying it’s at least a top-10 priority.
However, the study showed that most of the companies have been slower to adopt digital approaches to engaging their own employees, suppliers, and external partners, except using online tools for employee evaluations and feedback or knowledge management.
Use of big data and advanced analytics has been given increasing attention, but seemingly not for marketing purposes. Respondents saw increased use of data and analytics tools to improve budgeting and forecasting (46 per cent), performance management and transparency in internal operations (39 per cent), decision making (37 per cent), R&D processes (35 per cent), and operations, service delivery and supply-chain management (31 per cent).
The study showed that companies are speeding up business-process automation, while more than 40 percent of respondents said their companies are either incorporating digital technology into existing products or improving their technology operating models. Only 23 per cent said they are creating digital-only products.
While 30 per cent of respondents reported their organisations have created a chief digital officer (CDO) role as an executive-level position for all digital initiatives, most of them said the success or failure of these initiatives ultimately relies on organisation and leadership, rather than technology considerations.
However, the results showed more companies’ senior executives are now supporting and getting involved in digital initiatives, with 31 per cent of respondents saying that their CEOs personally sponsor these initiatives, up from 23 per cent in 2012.
Although increasing effort has been put into digital strategies, only 31 per cent of respondents said their digital efforts have yielded a measurable impact on top- or bottom-line results, compared with 43 per cent of executives who aren’t facing this issue.
In addition, only 36 per cent said their companies have a top-line metric for monitoring their digital programmes’ overall progress.
Despite the challenge of measurement, 65 per cent of respondents expected these trends would increase their companies’ operating income over the next three years. The survey showed CEOs are more positive than executives in any other role, with more than one in five saying they expect income from digital to increase by more than 30 per cent in three years’ time.
The study suggested, to move forward in the digital space, companies need to find the right digital leaders, increase C-level involvement, set the right agenda and maintain an aspirational vision, and prioritise talent.