New problems are rarely fixed by applying old thinking. In the last decade, a combination of circumstances has evolved that requires new thinking from marketers. This new thinking takes advantage of the digital environment and transforms business as we know it.
Mobile technologies for customer engagement and data analytics are the most strategically important digital areas of investment for CEOs, according to a new report.
The 18th Annual Global CEO Survey from PricewaterhouseCoopers was based on interviews with 1377 CEOs in 77 countries conducted between September and December last year. It found the majority of CEOs see digital technology investments as having created value for their business, with operational efficiency (88 per cent), data and data analytics (84 per cent) and customer experience (77 per cent) the highest ranked areas.
When asked to gauge how strategically important specific digital technologies are for their organisation, mobile technologies for customer engagement came up top for 81 per cent of CEOs, followed by data mining and analysis (80 per cent), cyber security (78 per cent), and the Internet of Things (65 per cent).
Notably, 61 per cent also ranked socially enabled business processes as a core digital technology investment area.
Business leaders clearly see themselves playing a key role in driving digital change, with 86 per cent saying the CEO’s ability to champion digital technologies was vital in ensuring the organisation gleaned value from such investments.
Other key pillars for digital success are a clear vision of how digital technologies can help achieve competitive advantage (86 per cent) and a well thought-out plan for investments, including defining measures of success (83 per cent).
The value placed on digital investments came despite the fact that 58 per cent of CEOs see technological change as a challenge for their organisation, up from 47 per cent last year.
“CEOs are concerned, too, about the ability of new entrants to exploit weaknesses in technological capabilities: 32 per cent name technology as the sector from which significant competitors are emerging – far more than those who name any other sector,” the PwC report authors stated.
The impact of digital disruption on an organisation’s competitive landscape was evident throughout the report. For example, more than half of the CEOs interviewed believed cross-sector competitors will become more common over the next three years.
In addition, 54 per cent of CEOs had entered a new industry sector, or at least considered it, in the past three years, while 56 per cent believed organisations will increasingly be competing in new sectors over the next three years.
In response to these competitive forces, PwC found CEOs are looking to collaborate with a more diverse range of partners who can provide access not only to new markets and consumers, but also new and emerging technologies and innovation to help fuel growth. Half of CEOs interviewed plan to enter into new alliances in the next 12 months, and two-thirds of these have already being partnering with customers. Examples include GE and Unilever.
The rise of partnerships between established enterprises and startups was also apparent through the report, with 44 per cent of CEOs interviewed either engaged with or considering alliances with these types of organisations. Surprisingly, half said they were also considering or had partnered with their competitors.
The PwC report also looked into CEO views on talent and resources and found diversity was a core attribute for modern businesses. Seventy-seven per cent of CEOs said they have or intended to adopt a strategy that promotes talent diversity and inclusiveness, and 81 per cent are actively looking for a broader range of skills when hiring than they did previously.
When it comes to areas of concern, over-regulation, availability of key skills, government response to fiscal deficit and debt burden, and geopolitical uncertainty came up tops. Disruptors, meanwhile, include changes in industry regulation, increase in the number of significant direct and indirect competitors, and changes in customer behaviours.
Overall, however, CEO sentiment overall was positive, with 61 per cent of CEOs seeing more opportunities today than three years ago. Thirty-nine per cent are very confident of their business growth prospects in the coming year.
Digital disruption and the role CMOs and CIOs play in helping their organisations harness digital change will be key themes explored at CMO's Executive Connections events in Melbourne and Sydney on 24 and 26 February. Join us at this free event by registering online: http://www.cmo.com.au/digital/
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