1 in 3 Asia Pacific firms to earn over 30% income from digital by 2023

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SINGAPORE: Asia Pacific is witnessing digital transformation (DX) at an unprecedented rate over the past year. With the digital-first approach, 1 in 3 Asia Pacific companies will generate over 30% of their income from digital products and services by 2023, predicts IDC.

This massive digital transformation is likely to see a considerable impact on the economy over the next year. At least 65% of Asia Pacific GDP will be digitalized by 2022, expects IDC.

With more and more enterprises heading towards their digital-first state, DX technology spending is expected to grow 2x faster than overall IT.

IDC unveiled its top ICT predictions for 2022 and beyond at its annual predictions event.

“As of July 2021, we have 28% of organisations in Asia Pacific already in the most progressive stages of digital transformation maturity, up from 18% pre-COVID in 2019. The world is now firmly anchored in a digital-first economy,” said Sandra Ng, Group VP – ICT Practice, IDC Asia Pacific.

“However, economic and business outlook for the next 3 years remains highly fluid because of a growing range of global challenges including the pandemic. An enterprise’s success in the next 12-36 months will be defined by how well it navigates these crosswinds,” added Ng

According to Ng, these are the top ICT and business predictions that will shape how Asia Pacific organisations and industries operate in a digital-first world:

1: Digital rules: By 2023, 1 in 3 Asia Pacific companies will generate more than 30% of their revenues from digital products and services, as compared to 1 in 5 in 2020.

2: Diversity matters: By 2024, 55% of successful digitally innovative products will be built by teams that include people with creative, critical thinking, analysis, and automation skills as well as software engineers.

3: The value in trust: By 2023, 40% of organisations will allocate half of their security budget to cross-technology ecosystems/platforms designed for rapid consumption and unified security capabilities to drive agile innovation.

4: The value in ecosystems: By 2026, on average 30% of 2000 company revenue is derived from industry ecosystem shared data, applications, and operations initiatives with partners, industry entities, and business networks.

5: Scaling with digital twins: Between 2021 to 2027, the number of new physical assets and processes that are modelled as digital twins will increase from 5% to 60% resulting in operational performance optimization.

6: Scaling with knowledge: 30% of large enterprises will see a 25% improvement in information usage by 2026 due to investments in intelligent knowledge networks that turn structured/unstructured data into findable and actionable knowledge.

7: An evidence-based culture is paramount for digital-first enterprises: By 2026, 30% of organisations will use forms of behavioural economics and AI/ML-driven insights to nudge employees’ actions leading to a 60% increase in desired outcomes.

8: Digital infrastructure is at the core of future enterprises: By 2025, a 6X explosion in high dependency workloads leads to 65% of 2000 firms using consistent architectural governance frameworks to ensure compliance reporting and audit of their infrastructure.

9: Business value of networks: By 2022, more than 50% of organisations will prioritize connectivity resiliency to ensure business continuity, resulting in uninterrupted digital engagement to customers, employees and partners.

10: Business value of IT: By 2024, digital-first enterprises enable empathetic customer experiences and resilient operating models by shifting 60% of all tech and services spending to as-a-service and outcomes-centric models.

According to Ng, there will be greater interdependencies between enterprises and across industries in a digital-first world. Over 50% of organisations in the Asia Pacific will see increased spending on technologies due to collaborations with ecosystem partners.

“This co-innovation and sharing of data, insights, and applications will lead to new products and services addressing the digital-first customer’s changing needs and habits,” concluded Ng.

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