CEOs no longer question the need to embrace technology at the core of their business in order to create value for customers, but 58% still see the rapid pace of technological change as a challenge. So we learn from the 18th annual PwC CEO survey. It’s based on 1,322 interviews with CEOs in 77 countries, conducted between September and December 2014.
Digital transformation is both a challenge and an opportunity. Digitization has blurred or even eliminated rigid industry boundaries starting with the media, content, and communications industries and now spreading everywhere. The new digital business world has no pre-defined boundaries, no industry-based rules or limitations.
Indeed, 54% of CEOs have entered a new sector or sub-sector, or considered it, in the past three years, according to PwC. More than half (56%) of CEOs think it likely that companies will increasingly compete in new industries over the next three years. Unlike in the past, when “unrelated diversification” was the business strategy of only large conglomerates, PwC found that 51% of the smaller firms (revenues up to $100 million) included in the survey, have entered a new sector or subsector, or considered doing so, within the past three years, compared with 64% of the largest firms, with revenues of over $10 billion.
What technologies CEOs think are the most strategic in facilitating the digital transformation of their companies and industries? Leading the list are mobile technologies for customer engagement (81%), data mining and analysis (80%), cyber security (78%), the Internet of Things (65%), socially enabled business processes (61%) and cloud computing (60%). Most interesting here is the inclusion of the Internet of Things, somewhat new on the scene as a business buzzword, but it’s possible that the survey respondents have either referred to what they see as its future potential or to the value they have already derived from established technologies such RFID and machine-to-machine communications.
The pace of digital transformation has a lot to do with the return on investment CEOs and their companies have enjoyed from the digital technologies they have deployed in the past. 86% say a clear vision of how digital technologies can help achieve competitive advantage is key to the success of digital investments. 83% say the same for having a well-thought-out plan – including concrete measures of success – for digital investments.