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By Brian Solis
Each year, I publish a report that documents the "State of Digital Transformation" around the
world. This year, for the first time, the report included input from companies digital
transforming in China. This was inspired by a recent speaking engagement I had on the subject
in Shanghai. In my interviews with executives ahead of the conference, I noticed a very
different corporate approach to digital transformation and innovation. Now, a new report, in
partnership with Leon Zhang and Benoit Garbe at Prophet Asia, compares the data between
Chinese companies and those around the world. The goal was to surface key differences in
strategy and efforts.
Almost all companies around the world are now undergoing digital transformation. But, digital
transformation is no longer an initiative that can be executed solely in silos, nor is DT an
investment limited to IT. It is a crucial component in any business growth strategy.
In China's distinct and fast evolving landscape, digital transformation is directly tied to agility
and innovation. In the past several years, tech innovators such as Baidu, Alibaba, Tencent, Didi
Chuxing, ByteDance (TikTok and Toutiao), RED and Meituan Dianping, have led an accelerated
wave of sweeping digital transformation. Their stories have served as influential case studies for
a new wave of transformers. Traditional businesses are now aiming to shift toward a digital-
first, growth mindset to more effectively compete and thrive.
So, how does China's digital transformation trends compare to the rest of the world?
A common theme is that a majority of efforts focus on customer experience
(CX) and modernizing critical touchpoint across the digital customer journey. But how and why
they do that is what separates China from everyone else.
In China, digital transformation is increasingly led by the CEO. In other countries, CEOs are
increasingly assuming leadership, but also CIOs and other C-level players still largely lead
efforts. Forty-two percent of the companies in China said that their steering committee for
digital transformation is led directly by the CEO, which is significantly higher than other
countries at 29%.
The Next Chapter of Digital Transformation in China
PROPHET
What's Driving Digital Transformation?
Companies in China are taking a more offensive role, using digital transformation as a way to
differentiate, drive revenue, enhance customer experiences and acquire new customers. For
instance, Chinese companies place emphasis on digital transformation in modern marketing
and CX (83% on CX, 58% in digital marketing and 75% in e-commerce initiatives." Compared to
the rest of the world, those numbers are significantly higher (32, 40 and 23% respectively).
China is also applying and directing digital transformation efforts toward product and
innovation, notably ahead of the rest of the world.
Interestingly, Chinese companies are investing less on employee engagement in comparison,
8% (China) vs. 29% (rest of the world). This orientation of digital transformation toward
external factors over internal efforts is closely linked to China’s highly competitive digital
ecosystem and dynamic market landscape. This is most likely the reason that investments in
employee experience (EX) around the world is on the rise. The need to modernize the work
force and work itself is a critical enabler for enterprise-wide innovation.
Executive Ownership of DT
PROPHET/ALTIMETER
Digital Transformation is a Competitive Advantage
To serve rapidly changing consumers and respond to a fast-moving and innovative
environment, businesses in China use digital to stay competitive. Every industry has to keep up
and evolve. By way of illustration, retail is evolving as “new retail,” automotive is emphasizing
electric and autonomous solutions, finance is driven by fintech and manufacturing is comprised
of IoT, robotics and AI-powered solutions, etc.
On average, data shows that global firms tend to use digital transformation as a means to drive
operational efficiencies along with modernizing CX infrastructure and customer experiences.
China, in contrast, invests driving a competitive edge and growth. For example, digital
transformation helps identify growth opportunities (62% in China versus 48% in rest of the
word). When it comes to CX, DT efforts help executives better understand consumer behaviors
and preferences (50 versus 45%). Additionally, DT informs strategies against increased
competition (45 versus 40%).
DT Aimed at Performance + Innovation
PROPHET/ALTIMETER
Top Digital Transformation Initiatives in China
The drive for growth is also reflected in Chinese companies’ long-term priorities of digital
transformation. CX and customer data strategy dominate the agenda with 66% integrating
customer touchpoints to deliver integrated, frictionless, omnichannel CX. At the same time,
62% are investing in IT infrastructure and technology to better manage data and cross-
functional efficiencies.
It is worth noting that organization and internal transformation is relatively low in terms of
priorities for many Chinese companies.
Top DT Initiatives
PROPHET/ALTIMETER
In Digital Transformation, Customers are Number One
Innovators such as Baidu, Alibaba, Tencent, Didi Chuxing have raised consumer expectations.
Just like Uber, Airbnb and Amazon has affected their respective markets. Anyone interacting
with a brand and business now expect fluidity, real-time, personalization, and complete
integration cross touch points and interactions. This means understanding the customer
journey, where it's broken and where there's need for innovation, is paramount.
As much as 74% of the Chinese companies interviewed are in the process of (28%) or have
completed (46%) mapping out the customer journey compared to 32 and 27% respectively.
Customer-Driven DT
PROPHET/ALTIMETER
Proving ROI is a Top Challenge Over Culture and EX
Digital transformation is an incredible expense and is often viewed as a cost center. But,
understanding where investments will have a business impact focuses strategy around
performance and growth. As Chinese companies evaluate whether to increase investments in
digital, they noted the lack of data and ROI important. In fact, 61% of companies in China
expressed concerns over the lack of data and ROI, while only 34% shared budget concerns.
External factors clearly motivate companies in China to digitally transform. As a result, they are
less worried about internal facing programs compared to the rest of the world. In other
countries, a lack of clear vision (18%) and company culture (23%) pose major challenges for
companies. Whereas in China, these numbers are substantially lower, at only 11% and 6%
respectively. The top-down cultural norm in China and the fact that many employees are digital
natives, are providing businesses with a unique position to be more intentional and agile.
Around the world, the early roots of digital transformation overly emphasized "digital" ahead of
business strategy. Now however, customer experience and innovation are core drivers. In
China, this is leading organizations to take a more proactive, rather than defensive, role in
pursuing growth and performance. For businesses around the world, this means that
enterprise-wide innovation must also significantly factor into digital transformation strategies.
At the same time, the under-prioritization of Human Resources in Chinese companies is a signal
to organizations worldwide that workforces must be trained, guided and incentivized to work in
what's quickly becoming a much more dynamic and agile ecosystem.
“The State of Digital Transformation” in China report is also available in Chinese and Korean.
Brian Solis, Author, Keynote Speaker, Futurist
Brian Solis is world-renowned digital analyst, anthropologist and futurist. He is also a sought-
after keynote speaker and an 8x best-selling author. In his new book, Lifescale: How to live a
more creative, productive and happy life, Brian tackles the struggles of living in a world rife with
constant digital distractions. His model for “Lifescaling” helps readers overcome the unforeseen
consequences of living a digital life to break away from diversions, focus on what’s important,
spark newfound creativity and unlock new possibilities. His previous books, X: The Experience
When Business Meets Design and What’s the Future of Business explore the future of customer
and user experience design and modernizing customer engagement in the four moments of
truth.
Invite him to speak at your next event or bring him in to your organization to inspire colleagues,
executives and boards of directors.
Follow Brian Solis!
Podcast: WTF: What’s the Future!?
Twitter: @briansolis
Facebook: TheBrianSolis
LinkedIn: BrianSolis
Instagram: BrianSolis
Pinterest: BrianSolis
Youtube: BrianSolisTV
Newsletter: Please Subscribe
Speaking Inquiries: Please Contact

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The State Of Digital Transformation In China Versus The Rest Of The World by Brian Solis

  • 1. By Brian Solis Each year, I publish a report that documents the "State of Digital Transformation" around the world. This year, for the first time, the report included input from companies digital transforming in China. This was inspired by a recent speaking engagement I had on the subject in Shanghai. In my interviews with executives ahead of the conference, I noticed a very different corporate approach to digital transformation and innovation. Now, a new report, in partnership with Leon Zhang and Benoit Garbe at Prophet Asia, compares the data between Chinese companies and those around the world. The goal was to surface key differences in strategy and efforts. Almost all companies around the world are now undergoing digital transformation. But, digital transformation is no longer an initiative that can be executed solely in silos, nor is DT an investment limited to IT. It is a crucial component in any business growth strategy. In China's distinct and fast evolving landscape, digital transformation is directly tied to agility and innovation. In the past several years, tech innovators such as Baidu, Alibaba, Tencent, Didi Chuxing, ByteDance (TikTok and Toutiao), RED and Meituan Dianping, have led an accelerated wave of sweeping digital transformation. Their stories have served as influential case studies for a new wave of transformers. Traditional businesses are now aiming to shift toward a digital- first, growth mindset to more effectively compete and thrive. So, how does China's digital transformation trends compare to the rest of the world? A common theme is that a majority of efforts focus on customer experience (CX) and modernizing critical touchpoint across the digital customer journey. But how and why they do that is what separates China from everyone else.
  • 2. In China, digital transformation is increasingly led by the CEO. In other countries, CEOs are increasingly assuming leadership, but also CIOs and other C-level players still largely lead efforts. Forty-two percent of the companies in China said that their steering committee for digital transformation is led directly by the CEO, which is significantly higher than other countries at 29%. The Next Chapter of Digital Transformation in China PROPHET What's Driving Digital Transformation? Companies in China are taking a more offensive role, using digital transformation as a way to differentiate, drive revenue, enhance customer experiences and acquire new customers. For instance, Chinese companies place emphasis on digital transformation in modern marketing and CX (83% on CX, 58% in digital marketing and 75% in e-commerce initiatives." Compared to the rest of the world, those numbers are significantly higher (32, 40 and 23% respectively). China is also applying and directing digital transformation efforts toward product and innovation, notably ahead of the rest of the world.
  • 3. Interestingly, Chinese companies are investing less on employee engagement in comparison, 8% (China) vs. 29% (rest of the world). This orientation of digital transformation toward external factors over internal efforts is closely linked to China’s highly competitive digital ecosystem and dynamic market landscape. This is most likely the reason that investments in employee experience (EX) around the world is on the rise. The need to modernize the work force and work itself is a critical enabler for enterprise-wide innovation. Executive Ownership of DT PROPHET/ALTIMETER Digital Transformation is a Competitive Advantage To serve rapidly changing consumers and respond to a fast-moving and innovative environment, businesses in China use digital to stay competitive. Every industry has to keep up and evolve. By way of illustration, retail is evolving as “new retail,” automotive is emphasizing electric and autonomous solutions, finance is driven by fintech and manufacturing is comprised of IoT, robotics and AI-powered solutions, etc.
  • 4. On average, data shows that global firms tend to use digital transformation as a means to drive operational efficiencies along with modernizing CX infrastructure and customer experiences. China, in contrast, invests driving a competitive edge and growth. For example, digital transformation helps identify growth opportunities (62% in China versus 48% in rest of the word). When it comes to CX, DT efforts help executives better understand consumer behaviors and preferences (50 versus 45%). Additionally, DT informs strategies against increased competition (45 versus 40%). DT Aimed at Performance + Innovation PROPHET/ALTIMETER Top Digital Transformation Initiatives in China The drive for growth is also reflected in Chinese companies’ long-term priorities of digital transformation. CX and customer data strategy dominate the agenda with 66% integrating customer touchpoints to deliver integrated, frictionless, omnichannel CX. At the same time, 62% are investing in IT infrastructure and technology to better manage data and cross- functional efficiencies.
  • 5. It is worth noting that organization and internal transformation is relatively low in terms of priorities for many Chinese companies. Top DT Initiatives PROPHET/ALTIMETER In Digital Transformation, Customers are Number One Innovators such as Baidu, Alibaba, Tencent, Didi Chuxing have raised consumer expectations. Just like Uber, Airbnb and Amazon has affected their respective markets. Anyone interacting with a brand and business now expect fluidity, real-time, personalization, and complete integration cross touch points and interactions. This means understanding the customer journey, where it's broken and where there's need for innovation, is paramount.
  • 6. As much as 74% of the Chinese companies interviewed are in the process of (28%) or have completed (46%) mapping out the customer journey compared to 32 and 27% respectively. Customer-Driven DT PROPHET/ALTIMETER Proving ROI is a Top Challenge Over Culture and EX Digital transformation is an incredible expense and is often viewed as a cost center. But, understanding where investments will have a business impact focuses strategy around performance and growth. As Chinese companies evaluate whether to increase investments in digital, they noted the lack of data and ROI important. In fact, 61% of companies in China expressed concerns over the lack of data and ROI, while only 34% shared budget concerns. External factors clearly motivate companies in China to digitally transform. As a result, they are less worried about internal facing programs compared to the rest of the world. In other countries, a lack of clear vision (18%) and company culture (23%) pose major challenges for companies. Whereas in China, these numbers are substantially lower, at only 11% and 6% respectively. The top-down cultural norm in China and the fact that many employees are digital natives, are providing businesses with a unique position to be more intentional and agile. Around the world, the early roots of digital transformation overly emphasized "digital" ahead of business strategy. Now however, customer experience and innovation are core drivers. In China, this is leading organizations to take a more proactive, rather than defensive, role in pursuing growth and performance. For businesses around the world, this means that enterprise-wide innovation must also significantly factor into digital transformation strategies.
  • 7. At the same time, the under-prioritization of Human Resources in Chinese companies is a signal to organizations worldwide that workforces must be trained, guided and incentivized to work in what's quickly becoming a much more dynamic and agile ecosystem. “The State of Digital Transformation” in China report is also available in Chinese and Korean. Brian Solis, Author, Keynote Speaker, Futurist Brian Solis is world-renowned digital analyst, anthropologist and futurist. He is also a sought- after keynote speaker and an 8x best-selling author. In his new book, Lifescale: How to live a more creative, productive and happy life, Brian tackles the struggles of living in a world rife with constant digital distractions. His model for “Lifescaling” helps readers overcome the unforeseen consequences of living a digital life to break away from diversions, focus on what’s important, spark newfound creativity and unlock new possibilities. His previous books, X: The Experience When Business Meets Design and What’s the Future of Business explore the future of customer and user experience design and modernizing customer engagement in the four moments of truth. Invite him to speak at your next event or bring him in to your organization to inspire colleagues, executives and boards of directors. Follow Brian Solis! Podcast: WTF: What’s the Future!? Twitter: @briansolis Facebook: TheBrianSolis LinkedIn: BrianSolis Instagram: BrianSolis Pinterest: BrianSolis Youtube: BrianSolisTV Newsletter: Please Subscribe Speaking Inquiries: Please Contact