Today’s customers demanding seamless cross-channel experiences, convenience, reassurance, and commitment to environmental, social, and governance (ESG) values and the list keeps growing, states Forrester in one of its latest reports. Not to mention that the pandemic, supply chain disruptions, and the “Great Resignation” remains challenging.
To fight the rising tide of entropy that has disrupted customers and employees, business leaders in Asia Pacific (APAC) will embrace controlled, positive change in 2022 — implementing future fit technology strategies, such as cloud-native approaches to improve business agility, and ushering in a new era of regionally aligned, hybrid work strategies to build customer trust and tackle climate change.
“2022 is a year to be bold. The old ways of working no longer work. The future is up for grabs. Leading firms will use the crucibles of 2020 and 2021 to forge a path to an agile, creative, and resilient tomorrow”, Forrester states, besides providing the following forecasts:
- Consumers see the world as all digital and have rapidly increased their technology adoption and usage since the outbreak of the COVID-19 pandemic. According to Forrester data, 66% of Chinese consumers say they are buying more things online than they normally would. Even consumers who were once considered digital holdouts anticipate continuing the online behaviors they adopted in the pandemic. As a result, consumers have higher expectations that digital experiences work well. Although they’re generally willing to forgive companies struggling with pandemic-related disruptions, consumers expect them to double down on building a successful and sustainable digital customer experience. Given that almost two years have passed since the onslaught of the pandemic, it is not surprising that consumers believe that companies should have figured out by now how to manage pandemic-related disruption.
- Tech execs leap from digital- to human-centered technology transformations. So-called “digital transformation” efforts have come and gone. In 2021, one in four APAC firms nominated digital transformation as a key action to address business model change. That number will drop to less than 15% in 2022, but that doesn’t mean pandemic-sparked technology acceleration will slow. Ongoing digital sameness and falling returns on IT investments are forcing firms to seek new means to demonstrate business value in crowded markets. Leading firms will unlock the creativity of their employees and surround them with intelligent technologies such as automation and predictions engines that focus on outcomes, not just financial results. This shift will establish a new era of transformation, comprising human-centered technology initiatives that form a tight link between customer experience and employee experience, drive competitive advantage, and deliver a 3% to 5% net gain in productivity. In 2022, 10% of technology executives will prioritize investments in strategic partnerships and innovation practices at three times the rate of their competitors to radically expand their organization’s creative and innovative capacity.
- Brands dance and spar with marketplaces. In China, 98% of B2C e-commerce sales flow through marketplaces today. For years, Western brands have leaned most heavily on Alibaba/Tmall and JD.com for online sales in China, along with closely integrated payments, logistics, delivery, and more. But marketplaces are as much enemy as friend, amping up sales volume at the expense of stealing a brand’s soul. So, in 2022, brands will fight back with every technology and weapon in their arsenal. Western brands will follow the lead of some mature (often luxury) brands and spend 2022 vetting and courting niche marketplaces as well as mini programs via companies such as Douyin, Little Red Book, and WeChat. Globally, brands will make direct relationships and better shopping experiences a priority to keep customers away from marketplaces and coming back for more. The mantra will become “Anywhere Commerce” as first movers and fast followers alike pursue presence in every possible shopping moment, from an owned website to an influenced marketplace or social slot to a paid retail media placement. Brands will also invest in the commerce building blocks of their experience architectures; order management, payments, and inventory control will make every touch a shoppable moment; investments in immersive experiences will turn browsing into virtual inhabiting; and subscription billing will make loyalty a business model pivot.
- APAC is well on its way to becoming a digital society. APAC governments lead the world in implementing the three pillars of a digital society: digital identity, digital currency, and data interoperability. The region also leads the world in central bank digital currency rollouts: e.g., more than 20 million Chinese consumers use the digital yuan, and trials are planned in the retail and wholesale industry in Australia, India, Japan, Singapore, and South Korea. Interoperable, connected government data frameworks like the Singapore-Australia Digital Economy Agreement and India-Singapore payment link are still new and thus fragmented. Nonetheless, tech innovators should seek opportunities to leverage all three pillars to build and offer differentiated capabilities to deliver better experiences for their customers.
- Trust becomes a key business imperative. The world is in a major crisis of trust, driven by concerns over public health, cybersecurity, data privacy, and sustainability. In response, companies and governments will use trust to demonstrate their commitment to customer relationships. In APAC, financial services will be the first industry to act. As prior crises have shown, people’s financial well-being and trust in financial institutions is a matter of systemic economic risk. In 2022, four to six financial services pioneers will begin measuring and codifying trust, as NatWest Group does with its net trust score linked to business KPIs like customer deposits. Some firms will also take advanced measures to protect trust, like the consortium of 25 financial services and tech firms participating in the Monetary Authority of Singapore’s Veritas initiative, which sets out principles for the ethical use of AI in credit risk scoring and customer marketing. Companies that ignore the trust imperative will lose 10% to 40% of their customers, starting with those unwilling to forgive firms for breaching their trust.
- Companies adapt to climate change or face extinction. Values-based consumers have furthered firms’ awareness of corporate social responsibility and sustainability, with 42% of senior business leaders in APAC reporting that these initiatives have increased in corporate importance due to COVID-19. Unfortunately, the sustainability plans of too many firms have remained performative and were put on hold during the pandemic. Only 30% of firms are taking real action, such as making their sustainability efforts more transparent and reducing their carbon footprint or e-waste. For most firms in APAC, sustainability efforts are driven by compliance and investor pressure, not strategic planning and risk management. This shortsighted approach checks the box but will not materially affect climate change. Forward-looking companies will appoint a sustainability leader and create a dedicated funded function — or risk alienating empowered customers who see right through merely performative actions.
- B2B marketers accelerate technology investments, with uneven results. Persistent digital engagement will become the norm, with 70% of marketers adopting an “always on” digital engagement strategy in 2022. For instance, three times as many B2B buyers (17%) said that the competence demonstrated during the buying process was the most significant driver of purchase choice, far ahead of the relationship with the sales rep (5%) or customer references (6%). To meet their always-on goals, marketing leaders will turn to “smarter” (more autonomous and automated) solutions with complex tech stacks. Marketing technology’s slice of the marketing budget, which has dropped to 19%, will increase to 25% in 2022. But 75% of efforts to create automated, personalized engagement won’t meet ROI goals because of inadequate buyer insight. In 2022, only 10% of B2B organizations will identify metrics to measure the value created for buyers during the buying process. B2B marketing leaders need to instill customer centricity into planning and execution processes to meet personalization goals.
- Automation is emerging out of the back office to become a potent enabler of new business and operating models. Companies with advanced automation programs will obliterate the competition if they defined an automation fabric — a framework to build, orchestrate, and govern a hybrid workforce of human and digital workers — that links AI-based and traditional automation components, along with a proactive program for innovation. As automation technologies such as robotic process automation, integration platform as a service (iPaaS), and digital process automation/low code converge on the supply side, expect a significant number of organizations to embrace an automation fabric to develop innovation culture, create business models, take new products and services to market, or rethink their customer experience.
- APAC’s future of work looks different compared with the rest of the world. As the pandemic stabilizes and vaccination rates rise, workplaces are gradually opening. Globally, Forrester expects that 70% of large firms will embrace some form of anywhere work in 2022. But region-specific pressures will force more than 60% of APAC firms to prepare to bring the vast majority of workers back to the office full-time. For example, only 32% of workers in the region’s large manufacturing sector can work anywhere. Similarly, outsourcing firms with purpose-built, secure campuses and high-availability facilities cannot provide the same level of service in remote locations with poor infrastructure. Employees, unions, and regulators will also push back on contact center operators that insist on surveilling employees working from home. Additionally, Forrester data found that 65% of APAC information workers are eager to return to the office, with high-density extended-family living likely accounting for this trend: 58% of employees say they are less productive working at home during COVID-19, compared with 46% globally. In response, firms operating in APAC need a region-aligned anywhere-work strategy that balances employee expectations with the feasibility of hybrid work approaches.
- Cloud native gains momentum. The scale mandate will reform as companies experience new levels of cloud scale considering the pandemic-fueled digital acceleration. Global cloud-native adoption rose in 2021 as developers reported increased usage of containers (33% to 42%) and serverless (26% to 32%) at their organization. Instead of adopting cloud solutions only for new workloads, some APAC firms will prioritize container-based, microservice-oriented architectures with distributed capabilities in hybrid cloud and multi-cloud environments. They will use service mesh for microservice support, a key to increased business agility, as well as use cloud-native platforms to power tech- driven innovations. By embracing a cloud-native approach, these firms will accelerate enterprise modernization and implement future fit technology strategies. But this shift will be slow compared with the other regions and limited to organizations that also commit to modernizing their practices, such as infrastructure as code, DevOps automation, and composition over customization. Firms not embracing cloud-native strategies will see limited benefits as their cloud-first plans stall.
- Third-party risks escalate as “just-in-case” supply chains gain ground. In 2020, 27.8% of organizations reported 20 or more supply chain disruptions, an increase from 4.8% in 2019, according to the Business Continuity Institute. Firms are looking to make supply chains more resilient without dulling their competitive edge, transitioning from “just-in-time” efficiency to the “just-in-case” contingency necessary to ward off disruption and volatility. At the same time, firms are accelerating innovation. The collision of these two priorities means that firms are effectively doubling the size of their third-party ecosystem, resulting in more security problems. While 87% of security pros in APAC say they manage privacy and security risks in their partner ecosystem, Forrester data reveals that 38% still reported that their organization experienced an incident or breach involving supply chain or third-party providers in the past 12 months. With cyberattacks continuing to target smaller vendors and suppliers, SolarWinds-style headlines will plague organizations that don’t invest in the risk management trifecta: people, process, and technology. Smart companies will ensure the tech stack includes risk assessment, supply chain mapping, real-time risk intelligence, and business continuity management.