Tata Consultancy Services (TCS) published the findings of a commissioned research that revealed that 60 per cent of companies globally – which have adopted the full range of business behaviours needed to thrive in a Business 4.0 world – expect to grow over 10 per cent in the next three years. TCS’ global study, titled ‘Winning in a Business 4.0 World,’ surveyed senior business decision makers from more than 1,200 large enterprises spanning 11 industries and 18 countries.
With the rapidly evolving business landscape and increasingly sophisticated customer expectations, businesses face constant challenges to quickly adapt and stay ahead. This global survey benchmarks large companies in their Business 4.0 growth and transformation journeys, by mapping their adoption of four critical business behaviours: driving mass personalization, creating exponential value, leveraging ecosystems, and embracing risk. The study found that:
Almost one in ten (9%) survey participants or ‘Leaders’ have adopted all four behaviours.
More than eight out of ten (82%) companies or ‘Early Adopters’ have embraced one to three of the behaviours, with mass personalization being the most prevalent (78%).
European businesses accounted for the most number of Leaders, followed by the Asia Pacific and North America when adjusted for the respondent mix.
Leaders are three times more likely than ’Followers’ -- 9% of participants that have not yet adopted any of the Business 4.0 behaviours -- to have embraced AI, blockchain and IoT technologies, and twice as likely to have embraced automation.
“The study reveals a strong link between Business 4.0 maturity and technology adoption. Leaders are more likely than other participating companies to have driven digital growth and realized double-digit revenue gains,” said K Ananth Krishnan, CTO, TCS. “Agile methodologies, cloud, automation, and AI are examples of tech pillars that enable Leaders to change course and adapt to shifting market dynamics much better than companies with inflexible ‘idea to execution’ timelines of months or years.”
Business 4.0 Characteristics: Key Findings
Driving Mass Personalization
Mass personalization is the most familiar behaviour to business leaders, classified by digital technologies allowing companies to offer personalized products and services at scale, which significantly improves the customer experience and leads to higher revenues.
More than three-quarters (78%) of all survey participants claim they can customize experiences at individual transactions. This has led to the following benefits:
- Higher customer profitability (60%).
- Increased value (59%) and volume (58%) of customer transactions.
- Reduced customer churn (32%).
Personalization is more widespread among North American firms, with more than four-fifths (84%) adopting the practice.
Creating Exponential Value
Businesses can drive more value – and even new products and services – from a single transaction, using the power of data analysis, IoT and AI to forecast future customer needs and points of engagement. By integrating digital or online channels and creating new business models, organizations can unlock new revenue streams and expand their customer base by shifting from selling one-off products to offering subscriptions to products and associated services.
All surveyed companies identified the top benefits of operating an exponential value model:
- Ability to target a wider range of potential customers (64%).
- An expanded geographical marketplace (62%).
- Higher profitability (54 per cent) and revenues (50%).
- New business models through collaborative ventures (50%).
This adopted behaviour has progressed furthest among insurance providers and telecom firms.
Nearly four out of ten (38%) survey respondents cite concerns regarding data security as the biggest barrier to adopting this behaviour.
When businesses increasingly collaborate with multiple partners – beyond just their supply chain networks – they are leveraging ecosystems. Companies are no longer forced into silos by the limits of their resources, and instead can bolster their innovation capabilities and offer consumers broader propositions through existing and new partners. Among all of the companies surveyed:
More than half (54%) leverage their wider ecosystem by collaborating with multiple partners to create new products and services.
Almost half (46%) access a dispersed workforce or the ‘gig economy’ when they need to boost their skills base.
The largest number of firms adopting this behaviour is found in the health and life sciences, telecom and manufacturing industries.
This is the most difficult behaviour for many organizations to adopt, as it goes against traditional management approaches. Business leaders are accustomed to undertaking initiatives with the least risk and fewest resources. In the digital era, however, it is important to embrace risk to stay ahead of the competition and provide better value to customers.
Almost seven out of ten (68%) organizations have not introduced agile practices widely – integral to embracing risk in establishing a culture that is conducive to transformation.
By contrast, 70% of Leaders say agile underpins every process in their organization today.
One-third (33%) of all survey participants said they plan to transform their business model within one year to embrace risk – and 47 per cent plan to do so in the next three years....