Building Competitiveness and Business Performance with ICT

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FindingThe benefits and risksof digitized platformsare especially salientfor firms based inAsia-PacificFigure 10: Average % total strategy allocated to one of three strategic foci.North AmericaProductLeaershipCustomerIntimacy30%OperationalExcellence33%36%Thirty-four percent of survey participants werefirms based in the Asia-Pacific region, and wellover half of these firms were based in India andChina, the two BRIC economies which haveEurope28%33%shown a remarkable period of rapid growth.40%In our survey, Asian-Pacific participantsdistinguished from firms in other geographicregions in two ways: First, with regards to theirallocations of investments in technology; andAsia32%35%second, their access to technical talent.33%Asian-Pacific firms take a morebalanced approach to strategy,whereas European and NorthAmerican firms are more focusedon cutting cutting and controllingoperational costs.Participants were asked to describe theirorganization’s strategic focus by showing howthey would allocate 100% of their total ICTbudget across the following three strategicfoci.• Product Leadership and Innovation;• Customer Intimacy; and• Operational Excellence.Figure 11: Average % of IT Budget allocated to new application development,by REGION.North America 33%Europe0% 10% 20% 30% 40% 50%3 years ago last year 2 years from now32%40%36%37%39%Figure 10 depicts strategy allocations acrossthe regions. These results are consistent withthe economic environments conditions ofeach region.Asia44% 45% 48%Asian-Pacific firms are spending agreater percentage of their total ICTbudget on new applications andexternal servicesFigures 11 and 12 show how the rapid growthof most Asian-Pacific economies is reflected intheir portfolio of ICT investments. In contrastto firms based in Europe and North America,where economic conditions are significantlymore challenging, firms from Asia-Pacificanticipate spending almost half of their totalICT budget on new application development(Figure 11). Moreover, Asian-Pacific firmsexpect to increase significantly their spendingon external service providers, reflecting thegreater access firms have to service providersin the region (Figure 12).Figure 12: Average % of IT Budget allocated to External Service Providers,by REGIONNorth America 21%EuropeAsia3 years ago last year 2 years from now30%24%33%28%35%25% 32% 40%6More specifically, 34% were from China; 27% from India; 6% from Australia; 6% from Japan; and 6% fromSingapore. The remaining 21% were firms from other parts of the region.22 INSEAD eLab ICT Report
Overall, complementarities holdacross regions.While the survey revealed important differencesbetween firms from Asia-Pacific and firmsfrom Europe and North America with regardsto the average percentage of the total ICTbudget spent on items such as emergingtechnologies including cloud, mobility andcollaboration tools, new applications, andoutsourcing, it showed little or no statisticaldifferences between regions with regards tothe complementarities between investmentsin ICT and key business enablers. There was,however, one notable exception.One less hurdle to competitivenessfor Asian-Pacific firms: Greateraccess to technically-focused talent.In contrast to firms from other regions ofthe world, access to technical talent did notsignificantly enhance the likelihood of highperformance for high investors from AsiaPacific. Put another way, Asian high investorsin cloud with weak technical talent werealmost as likely to be competitively agile asthose with strong technical talent. What doesthis say? That the impact of technical talenton competitiveness – both as a risk and anenabler – is not as great in those regions thathave greater access to strong technical talent.Conversely, high investors in North Americaand Europe put a higher premium on strongtechnical talent simply because they have lessaccess to the ICT skills required to turn theirinvestments into rewards.Figure 13: Regional differences of the impact of technically-focused talent.The width of the bars corresponds to the percentage of survey participants that belong to a specificinvestor group.Withininvestorgroup, % offirms thatwerehighly agileNon-investors inCloud (12%) arenot shownWithininvestorgroup, % offirms thatwerehighly agile42%33%North America52% of the total sample wereLow Investors in CloudEurope 80%33%38%weaktechnicaltalentweaktechnicaltalent18%75%strongtechnicaltalent17%35% of the total sample wereHigh Investors in CloudstrongtechnicaltalentRevealed in the survey, a greater percentageof high investors have sufficient access totechnically-focused talent in Asia-Pacific thanin Europe and North America (62% versus 50%).In addition, the supply of technically-focusedtalent is greater in Asia-Pacific because of anumber of factor endowments: the depth oftech-savvy graduates from top-ranked schools,the technology spillover effect, the growth ofhighly competitive economic sectors andaggressive salaries.Whether a firm has weak or strong technicaltalent will vary depending on the resourcesthat are available. In areas where there is a largesupply of technical-focused talent, demandwill be more discerning and selective. In areaswhere there are significant gaps betweendemand for and supply of technically-focusedtalent, such as Europe and North America,demand on average will be less selective. Inthese circumstances, firms that are strugglingto find technical talent will be happy with talentthat is good enough, whereas firms in areaswith a strong supply will only be happy with thebest.Non-investors inCloud (28%) arenot shownWithininvestorgroup, % offirms thatwerehighly agileNon-investors inCloud (27%) arenot shown47% of the total sample wereLow Investors in Cloud36%Asia42% of the total sample wereLow Investors in Cloud12% 13%25% of the total sample wereHigh Investors in Cloud50%weaktechnicaltalent12%62%strongtechnicaltalent19%31% of the total sample wereHigh Investors in CloudBuilding Business Performance and Competitiveness with ICT 23
Page 1 and 2: Building Competitiveness and Busine
Page 3 and 4: Foreword“ Information andCommunic
Page 5 and 6: ExecutiveSummaryFor the first time
Page 7 and 8: FindingUses of technologycan become
Page 9 and 10: Real SuccessEuropean policiesdesign
Page 11 and 12: FindingSimply focusing onICT invest
Page 13 and 14: FindingHigh performersmatch investm
Page 15 and 16: Real SuccessFerrovial: Selective us
Page 17 and 18: FindingHigh performingfirms involve
Page 19 and 20: FindingDigitized platformsare assoc
Page 21: These results provide additionalsup
Page 25 and 26: Real SuccessFerrovial: Howinvestmen
Page 27 and 28: Key Implicationsfor BusinessLeaders
Page 29 and 30: Key Implicationsfor PolicyMakersThe
Page 31 and 32: Next StepsTo remain relevant and co

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