Forget e-commerce and digital marketing. Many American CEOs have advanced toward the adoption of more sophisticated technologies, at least one new survey suggests, as their digital transformation strategies move into the next phase.
Progress comes as an increasing number of everyday products and services are either accessed online or driven by digital applications, making it harder to distinguish between tech companies and everyone else.
One of the best examples of a non-tech company becoming what could be described as pseudo-tech is GE, which has invested heavily in the digitization of its engineering processes, rather than rely on cheaper offshore labor to drive profits. “We can’t be an industrial company anymore,” GE CEO Jeff Immelt said recently. “We need to be more like Oracle. We need to be more like Microsoft.”
Indeed, technology was found to be the second-biggest priority of 388 American CEOs at companies with at least $1 billion in revenue polled by tech research group Gartner. Some 31% listed it as a top-three priority, coming in second to “growth”, at 58%, but beating 10 other concerns, including customers, products, workforce and cost management.
While the idea of becoming a digital business may have been speculative to many respondents a few years ago, just under half said they are now being challenged by the board to make digital progress. Just over half said digital improvements had already converted to higher profits.
“CEO understanding of the benefits of a digital business strategy is improving,” said Gartner vice president Mark Raskino. “They are able to describe it more specifically.”
Although a significant number of CEOs still mentioned e-commerce or digital marketing, he said, more of them aligned digitization to advanced business ideas, such as digital product and service innovation. Increasingly popular applications cited by CEOs included the Internet of Things, which allows products such as cars and electrical appliances to be controlled by computers and smartphones. Then there’s artificial intelligence, wearable devices, virtual reality, robotics and 3D printing.
Around a fifth of the survey respondents had even gone so far as to take a “digital first” approach to their business, where, for example, the first version of a new process is delivered in the form of a mobile app.
Tech companies themselves are looking over their shoulders, with 78% of 580 Silicon Valley executives recently polled by KPMG somewhat to extremely concerned about non-technology firms becoming technology firms.