Building the Future Enterprise for the Digital Economy




Pandemic or not, the world is changing. Digital transformation (DX) offers the most promising set of tools to enable business survival. Hence, adapting is no longer an option.

According to IDC’s Worldwide Digital Transformation Strategies Practice Research Director Shawn Fitzgerald, a Future Enterprise can be described as a “digitally determined organization where digital is achieved at a scale across its operations”.  Furthermore, it innovates “at a pace that is an order of magnitude greater than traditional businesses”.

IDC predicted that by 2022, the digital economy will go mainstream with at least 50% of Asia/Pacific GDP coming from digital products and services.

Key Dimensions of the Future Enterprise

Moreover, IDC conducted a study on “realizing digital at scale” for “providing the next-generation framework for viewing digital transformation maturity across five dimensions.” The five key dimensions of the Future Enterprise are as follows:

  • First, Future of Culture: Leadership at scale
  • Second, Future of Customers: Empathy at scale
  • Third, Future of Intelligence: Insight at scale
  • Fourth, Future of Operations: Resilience at scale
  • Finally, Future of Work: Work model at scale
DX Predictions

IDC forecasted in its study that “empathy among brands and for customers will drive ecosystem collaboration and co-innovation”. Combined, these will drive 20% collective growth in customer lifetime value. On the other hand, in a factory setting, it projected that, by 2025, “more than half of A2000 enterprises will be prolific software producers”. Over 90% of new apps will be cloud-native, 50% of code externally sourced, and 1.5 times more developers employed.

DX will be a driving force for this adaptation, now more than ever. According to IDC, by 2022, “50% of IT organizations will have transitioned from builders and operators to designers and integrators of digital solutions”.  In the near future, they will define every product, service, or process.

The COVID-19 pandemic has created an environment where such changes are vital for business survival. “Proactive, hyper-speed operational changes and market reactions” are expected to be in place by 2022. This will enable enterprises to “respond to customers, competitors, regulators, and partners at least 1/3 faster than their peers”.

Definitely, digitally-advanced businesses will need to evolve to “a broad, flexible, self-service mashup of digital tools”. This will replace the walled-garden’ IT-as-an-Enabler model by 2024.

Additionally, that same set of IDC data pointed to an expansion of “the functionality and effectiveness of the digital workforce by 30%”. This will fuel an acceleration of productivity and innovation at practicing organizations by 2021, as per IDC.

As a matter of fact, what the world needs now is to modernize platforms, something that IDC predicted will happen throughout 2023. The drivers for this modernization, according to that study, were “escalating cyber threats and needed new functionality” and IDC predicted that “65% of organizations will aggressively modernize legacy systems with extensive new technology platform investments through 2023.”

The Future Enterprise in the Time of COVID-19

More than anything, the world needs to create digital bridges that will take into account the needs for the next normal. This includes social distancing, minimizing person-to-person contact, and build and maintain good customer relations using digital channels. Stopping the spread of COVID-19 now requires adapting novel ideas. Some examples are contactless payment, working from home, and seamless digital interactions and transactions. Without a doubt, the future, and organizations’ survival of this global crisis, demand it.

This year, a new breed of digital disruptors should have emerged. According to IDC, “traditional brands have either successfully transformed to the advanced stages of Future Enterprise (aka DX 2.0) maturity or have expressed determination to accelerate in their Future Enterprise journeys.”

Add one virus named COVID-19 among the disruptors, albeit not one of the digital variety. IDC also predicted last year that, by 2024, “leaders in 50% of the top 2,000 Asia-based organizations will have mastered ‘future of culture’ traits such as empathy, empowerment, innovation and customer-and data-centricity to achieve leadership at scale.”

Biggest Barrier to Digital Transformation

In February, IDC Insights pointed to more DX changes. It projected that by 2024, “leaders in 50% of organizations on the Forbes’ Global 2000 list of the world’s largest public companies will have mastered ‘future of culture’ traits”. Future of Culture traits encompasses empathy, empowerment, innovation, and customer and data centricity to achieve leadership at scale.

IDC found that the biggest barrier to effective digital transformation is not technology, nor the lack of strategy or budget. It can be summed up in two words: organization culture. IDC Chief Research Officer Meredith Whalen said that “leading companies are racing toward becoming future enterprises”. Indeed, it is “a journey where taking operations and innovation to scale is the measure of success”.

Whalen noted that “relying on past accomplishments and inertia is no longer an option”. To thrive, organizations need to build a culture that fosters change. This underscores the redefinition of commonly accepted values, processes, corporate structures, and metrics. She added that “culture and leadership are interwoven”. Since founders and leaders can imprint values and behaviors that persist for decades, they can also shape those values when change is required. This is especially true now. The future is here and it demands change.

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