Digital disruption is sweeping the world, with 92% of organizations saying they have a digital transformation strategy

Recently, Cisco, together with IDC and other authoritative institutions, released two white papers on digital transformation readiness for the Asia-Pacific region and the Chinese market, respectively. They not only presented a macro view of the digital development trend in the entire Asia-Pacific region, but also conducted research and analysis on important markets including China. The research shows that

• The larger the organization, the more difficult it is to transform digitally: 19% of large organizations feel they are not ready for digital transformation, compared to only 7% of small organizations.
• Acquiring digital skills is not easy: 41% of organizations are unable to adopt relevant skills due to lack of talent;
• Poorly considered actions: 40% of organizations forgo innovation and 40% ignore after-sales support in the hope of reducing the cost of purchasing IT infrastructure, but 40% of organizations that do so regret it.

A Cisco survey of more than 1,300 IT executives in 11 countries in Asia Pacific shows that they are confident about the fully digital future. However, confidence levels vary across regions due to concerns about budget, talent and IT infrastructure readiness. In particular, large organizations and mature markets lack confidence due to the latecomer advantage of new players.

The white paper "Ready to Fight, Ready to Go, Wait and See: Asia Pacific Digital Transformation Readiness Technology Outlook" points out that digital disruption is sweeping all countries and all industries, and technological innovation will only accelerate the pace of change. The current situation is extremely favorable for the vast developing markets, including China. Compared with more developed countries/regions and organizations constrained by traditional infrastructure, new players have the opportunity to overtake in this round of digital transformation.

The white paper "Fully Digital-Ready Networks Intelligently Lead the Future of Digital Economy" which focuses on the Chinese market shows that China's digital economy accounts for more than 30% of GDP, and digitalization has become a new engine of economic growth. Therefore, digital transformation is an inevitable choice for enterprises in the future digital economy era. And fully digital-ready networks are the key to digital transformation for enterprises.

Overview of key findings and highlights in Asia Pacific:

1. Companies in Asia Pacific are generally confident about their digital future

92% of companies say they have a digital transformation strategy, and 88% believe their strategy is helping them succeed. Additionally, 88% of IT leaders believe they are fully prepared to adopt technologies for the future. The exception is Japan, where 59% of IT leaders say their digital strategies are inadequate. Larger organizations also appear to face more challenges: 19% of IT leaders in large organizations do not believe they are fully prepared to adopt technologies for digital transformation, compared to only 7% of respondents in small companies.

2. IT leaders focus more on costs than security

Budget is the top reason IT executives from both large and small organizations are holding back on investing in technologies related to digital transformation (42%). In fact, they admit to making trade-offs to reduce IT procurement costs. However, 37% of IT leaders regretted doing so because the solution was unreliable (48%) and did not meet expectations (45%), and 49% of companies were forced to invest additional money beyond the initial investment.

3. Aging infrastructure is a barrier (especially for large organizations)

When asked why they are unable to future-proof their technology, 38% of IT leaders across all markets in Asia Pacific cited aging infrastructure as a barrier. While 90% of companies said they had upgraded their IT infrastructure in the past three years, this did not cover all components: 30% of respondents said they had not upgraded their network, data center or security infrastructure (the three infrastructure components examined in the report). Again, the difference between large and small organizations was clear: 42% of large organizations said they were unlikely to upgrade their IT infrastructure, compared to only 29% of mid-sized organizations and 25% of small organizations.

4. Cybersecurity and cloud are the focus

65% of IT leaders in Asia Pacific believe that cybersecurity is critical to the success of digital transformation, especially in the financial services industry (80%). 85% of companies in Asia Pacific have already adopted security technologies, while 42% said they have upgraded security due to vulnerabilities. Cloud is also in the spotlight: 70% of IT leaders consider cloud a priority, while 80% of companies have already adopted cloud. The research also shows that 63% of companies are in the process of adopting SD-WAN, indicating that they may optimize their networks for the cloud.

5. Automation technology is expected to become the new favorite

Although automation is not prominent in the technology-driven digital future strategies of enterprises, 83% of companies plan to start implementing automation technologies in the next 6 months to a year. This automation boom is more likely to occur in developing countries such as Vietnam than in developed countries such as Japan.

Overview of key findings and highlights in China:

The Chinese market is leading the way in the Asia-Pacific region, and Chinese IT leaders believe they are ready to successfully achieve full digital transformation. More than 94% of IT leaders are optimistic about their full digital transformation strategies, and 96% of companies believe they are ready to adopt relevant technologies to establish competitive advantages.

1. Highlights: Big data, 5G

China has become the largest adopter of big data and analytical technology, with an adoption rate of 79%, ranking first in the Asia-Pacific region. In addition, 46% of the companies surveyed said they might adopt 5G, while the proportion in the entire Asia-Pacific region was 36%, and China's data was far ahead.

2. Weaknesses: IT infrastructure, price factors

40% of Chinese companies said they were unable to adopt new technologies such as AI or the Internet of Things due to a lack of appropriate IT infrastructure; 40% of companies said they would rather sacrifice quality in exchange for lower prices when upgrading their IT infrastructure. At the same time, 70% of companies agreed that using price as the main basis for decision-making would result in the purchase of new infrastructure being less reliable.

3. Future recommendations: A fully digital-ready network is key to digital transformation for enterprises

In terms of informatization investment, more than 20% of enterprises choose to upgrade and optimize their networks. Among them, 46% of the respondents said that the network cannot meet the needs of business changes is the primary problem they encounter; 35% of the respondents regard the inability of the network to smoothly expand as the second biggest problem encountered by the enterprise; 31% of the enterprises regard the inability of the network to adapt to the improvement of customer experience as the third most important problem. In this regard, IDC believes that a fully digital-ready network is the future development direction. With the development of the digital economy and the trend of digital transformation, the network needs to be transformed and digitized, and needs to become smarter and gradually have self-healing capabilities. A fully digital-ready network can provide revolutionary tool support for digital transformation, and ultimately meet all the needs of cloud, mobility, the Internet of Things and new business models to align with the business goals of the enterprise.

About Ready, Ready, Waiting: A Technology Outlook for Digital Transformation Readiness in Asia Pacific

The Cisco survey was conducted by an independent third-party research company and interviewed more than 1,300 IT executives in 11 countries/regions in the Asia-Pacific region, including Chief Information Security Officers, Chief Information Officers and Chief Technology Officers, as well as IT vice presidents and directors, IT directors and IT infrastructure directors from the education, financial services, public sector, healthcare, manufacturing and retail industries. The survey topic is to understand their attitudes and plans for key technologies, including cloud, cybersecurity, Internet of Things (IoT), artificial intelligence, automation, big data and analytics, and 5G.

About "Fully Digital-Ready Networks Intelligently Lead the Future of Digital Economy"

This research report was jointly released by Cisco and IDC. It conducted in-depth research on the full digital transformation, core technology and network concerns, expectations of network suppliers, and enterprise networks of 100 Chinese companies. It surveyed China's six major industries including finance, manufacturing, education, retail, medical care, and the Internet, and detailed the progress and key factors of the digital transformation of Chinese companies.