Asia/Pacific CEOs Defy Macroeconomic Headwinds, Increase Technology Investments

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According to the recent IDC report Investing for Growth Amidst Uncertainties with Digital Business Transformation, digital transformation (DX) is now a top corporate agenda. 72% of Asia/Pacific including Japan (APJ) CEOs say that digital initiatives are long-term business transformation commitments going beyond the current financial year, based on data from IDC APJ CEO Sentiment Survey 2023. In exiting the pandemic, CEOs anticipate continued uncertain macroeconomic conditions in 2023 and beyond. CEOs' technology focus has shifted from efficiency to using tech for sustained growth while positioning their organizations against external macroeconomic shocks. Digital business transformation is seen as the solution to achieve both business resilience and enable growth in today’s digital-first market.

"Technology's role has been elevated from a back-office function to a source of competitive advantage. Unlike past recessions, CEOs are increasing technology budgets despite belt-tightening pressures driven by ongoing recessionary risks,' says Lawrence Cheok, Associate Research Director, AP Digital Business Strategies, IDC Asia/Pacific. "CEOs are embracing technology as the enabler for business resilience and growth to counter persistent external risks driving volatility, uncertainty, complexity, and ambiguity," added Cheok.

CEOs are investing in enabling digital business models and using technology to grow their digital share of revenue from 21% in 2023 to 41% by 2028. According to IDC's FutureScape : Worldwide Digital Business Strategies Predictions – Asia/Pacific (excluding Japan) Implications, by 2027, 80% of APJ organizations will accurately quantify the value of their digital capabilities and assets and significantly improve their market valuation.

About half of the CEOs are adopting scenario-based budgeting and dynamic monthly budget cycles to respond more effectively to unfolding macroeconomic uncertainties while ensuring that technology investments deliver incremental business outcomes along their multi-year transformation journeys. At the same time, CEOs are challenged by the C-suite's lack of digital know-how, the workforce's lack of digital skills, line-of-business (LOB) leaders' lack of trust in technology, and ineffective enterprise-wide change management. These organizational hurdles top the challenges in realizing digital value creation.

"Beyond technology solutions, technology vendors must help CEOs accelerate time to value, achieve measurable business outcomes, enable commercial flexibility, and catalyze innovation to be perceived as strategic partners in their business transformation journeys," ends Cheok.

A digital business creates and captures value through digital products, services, and experiences. The ongoing shift toward digital business models marks the next digital transformation era, where organizations use technology to compete, grow digital revenue, and disrupt the marketplace with new digital innovations. IDC's Asia/Pacific Digital Business Strategies program studies the transformation of organizations in their use of digital technologies to run a viable digital business. This program examines organizations' maturity, market trends, competitive landscape, and end-user buying behavior from the IT, LOB, and C-suite standpoints. The research looks at the impact of digital businesses on people/skills, processes, and technology, including business priorities, challenges, and technology investments. Technology vendors can expect quantitative data and qualitative insights to identify key areas of growth, position relevant messaging, and inform go-to-market and product strategies.