80% of better performing companies more willing to collaborate with competitors
A new study reveals a sharp divide in the digital strategies of better-performing companies (leaders) versus followers, including unexpected insights such as 80% of leaders being more willing to collaborate with competitors than followers (23%).
Tata Consultancy Services (TCS) has published a global study titled 'Where, How, and What Leaders Will Compete within the New Decade: Findings from the TCS 2021 Global Leadership Study', based on a survey of 1,200 CEOs and senior executives.
Published by the TCS Thought Leadership Institute, which conducts primary research to help organisations transform for long-term, sustainable growth, the study examines how large global enterprises have recalibrated their competitive strategies through 2025, following the pandemic.
It explores how management teams across the world are striking a balance between innovation and optimisation in four areas: digital strategies, digital offerings, digital ways of conducting business, and leadership approaches.
"Senior executives are always challenged to lead their organisations forward to be more competitive, and increasing digitisation only accelerates that momentum," says TCS business group head, business & technology services, Krishnan Ramanujam.
"The study captures the pulse of global business leaders and their nearly universal belief that massive digital opportunities abound in the next five years and that their company culture must embrace an innovation mindset.
"At TCS, we use our 3-Horizon Purpose-Led Transformation framework to help organisations embrace innovation in a way that helps them compete more effectively."
Some key findings of the study include:
- What to compete with: Purely digital products and services account for 43% of respondents' revenues, slightly more than the global survey average (39%). By 2025, these products are expected to generate 51%, compared to 46% overall. Respondents expect 39% of revenues by 2025 to come from entirely new offerings, compared to 41% for all surveys. Across the region, APAC respondents expect more than half of future revenues to come from existing offerings.
- How to compete: Innovation was ranked as the most important aspect of organisation culture, followed by diversity, inclusion and equal opportunity, quality orientation, and customer-centricity. All senior executives identified an accelerated digital economy on the horizon, yet few are preparing to innovate accordingly and may end up lacking the capabilities to compete successfully.
- Where to compete: Outdated strategic planning still dominates in markets in the APAC region. Less than 40% of the respondents in Asia Pacific say their firms consider cross-industry "digital ecosystems" when evaluating future business opportunities, including Australia and New Zealand (19%), India (31%) and Singapore (37%), compared to 45% in the survey globally. Although firms in APAC tend to assess threats only from within their industry, more than 60% believe their most significant competitor will come from elsewhere, including other sectors, digital companies and start-ups.
The study found that in an increasingly digital business environment, senior executives now see many areas of their organisations vulnerable to cyberattacks beyond the IT function. Finance is predicted to be the most prone to cyberattacks, followed by customer databases, research and development.
According to the report, leaders are more focused on customers than followers, suggesting they are more focused on preventing cyberattacks on customer data.
"While the concerted push for innovation has put Singapore and the region in good stead to capitalise on the digital pivot, there's an urgent need to create thriving digital cultures while also safeguarding our digital ecosystems," says TCS Asia Pacific president, Girish Ramachandran.
"Asia Pacific is expected to grow faster than most other mature markets, and TCS is committed to continuously invest in enhancing the resilience and agility of the region's businesses to ensure Asia is well-positioned to drive the digital economy forward in a post-COVID-19 world."
The study surveyed more than 1,200 CEOs and senior executives from a range of industries including (but not limited to) retail, manufacturing, insurance, banking and financial, healthcare and more, from four regions across the globe, North America, UK and Europe, APAC, and LATAM. Respondents' companies had annual revenues over $1 billion, with average revenue of $14 billion.