Tata Consultancy Services (TCS) (BSE: 532540, NSE: TCS), a leading global IT services, consulting, and business solutions organization, published its global study titled ‘Where, How and What Leaders Will Compete with in the New Decade: Findings from the TCS 2021 Global Leadership Study’, based on a survey of 1,200 CEOs and senior executives. The study reveals a sharp divide in the digital strategies of better performing companies (Leaders) versus the laggards (Followers), including unexpected insights such as: 80% of Leaders are more willing to collaborate with competitors compared to Followers (23%).
While digital cultures are thriving, senior executives are underestimating the amount of innovation they will need, as competing in the marketplace will still mean navigating some legacy barriers to innovation.
Brought out by the TCS Thought Leadership Institute—which conducts primary research to help organizations transform for long-term, sustainable growth—the study examines how large global enterprises have recalibrated their competitive strategies through 2025, following the pandemic. Specifically, it explores how management teams across the world are striking a balance between innovation and optimization in four areas—digital strategies, digital offerings, digital ways of conducting business, and leadership approaches.
“Senior executives are always challenged to lead their organizations forward to be more competitive, and increasing digitization only accelerates that momentum,” said Krishnan Ramanujam, Business Group Head, Business & Technology Services, TCS. “This study captures the pulse of global business leaders and their nearly ubiquitous belief that massive digital opportunities abound in the next five years—and their company culture must embrace an innovation mindset. At TCS we use our 3-Horizon Purpose-Led Transformation framework to help organizations embrace innovation in a way that helps them compete more effectively.”
Key findings of the study include:
What to compete with:
- Purely digital products and services account for 43% of Singapore respondents’ revenues, slightly more than the global survey average (39%). By 2025, Singapore is expected to generate 51% from such products, compared to 46% overall.
- Singaporean 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 organization culture, followed by Diversity, Inclusion and Equal Opportunity (#2), Quality Orientation (#3), and Customer-Centricity (#4).
- 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 successfully compete.
- Singaporean companies are more convinced than others that mass customization of offerings and highly personalized sales and marketing will have the greatest impact by 2025. They are less enthusiastic about higher value customer experiences, which ranked second globally but second to last in Singapore.
Where to compete:
- Outdated strategic planning still dominates in markets in the region, less than 40% of the respondents in Asia Pacific said 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.
- Most Singaporean companies (53%) still analyze their opportunities and threats using historical industry boundaries. Yet only 27% believe future competition will come from within industry boundaries.
- Although firms in APAC tend to assess threats only from within their industry, more than 60% believe their biggest competitor will come from elsewhere, including other industries, digital companies and startups.
Other findings:
- In an increasingly digital business environment, senior executives now see many areas of their organizations to be vulnerable to cyberattacks beyond the IT function. Finance is predicted to be the most prone to cyberattacks, followed by Customer Databases (#2) and Research and Development (#3).
- Leaders are more obsessed with customers than Followers, suggesting that they are more obsessed with preventing cyberattacks on customer data.
The report also offers data-driven insights to help shape the strategy of forward-thinking senior executives on how to take their organizations to higher performance:
- Most Leaders realize they must collaborate extensively with competitors to be key players in digital ecosystems; Lower performers still regard competitors as enemies to avoid. 55% of Leaders plan to expand more collaborative relationships with competitors.
- Leaders also anticipate that more of their revenue will come from purely digital offerings compared to Followers.
- Leaders ranked Customer-Centricity as the top cultural priority, above Shareholder Value, while Followers ranked it number 6, indicating that higher-performing companies embed a ‘customer-first’ mindset across the organization.
- Leaders believe that digitally empowering employees will be more impactful to the organization, including over automation of real-time analysis of the company’s financial condition.
“The adoption of digitization in the Philippines picked up pace as businesses and consumers acknowledge the need to cope with changes in the society, especially given the challenges brought about by the pandemic. Local leaders continue to find holistic and safe solutions to empower businesses, employees and consumers today and beyond.” said Shiju Varghese, Country Lead, TCS Philippines. “TCS Philippines remains committed to its goal of bringing the vision of its partners to reality through innovative solutions that will not only drive recovery but also enable businesses, organizations and the economy to achieve resiliency post-pandemic.”
TCS’ 2021 Global Leadership 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 (US, Canada); UK, Europe (Germany, Netherlands, France); APAC (India, Singapore, China, Australia, New Zealand, Japan); and LATAM (Colombia, Brazil, Mexico). Respondents’ companies had annual revenues over $1B, with an average revenue of $14B.
To view the full report and receive more information, visit www.tcs.com/perspectives/ceo