Hyperconnected organisations: How businesses are adapting to the hyperconnected age

THE HYPERCONNECTED ECONOMY: PHASE 2
HYPERCONNECTED
ORGANISATIONSHOW BUSINESSES ARE ADAPTING
TO THE HYPERCONNECTED AGE

© The Economist Intelligence Unit Limited 20151
The hyperconnected economy: Phase 2
Hyperconnected organisations
About this study 2
Executive summary 3
Introduction 5
Understanding the challenge 6
Organisational adaptation 8
Market disruption 11
Conclusion 13
Appendix: Survey results 14
Contents
1
2
3

The hyperconnected economy is a multi-phase
research programme conducted by The Economist
Intelligence Unit (EIU) and sponsored by SAP.
Hyperconnectivity is defined as the sharp
increase in the interconnectedness of people,
organisations and objects that has resulted from
three consecutive waves of technology innovation:
the Internet, mobile technology and the Internet
of Things (IoT). This report investigates its impact
at an organisational level and draws on the
following two research methods.
1. A global survey of 561 executives. Survey
respondents were drawn from a range of industries,
including 16% from financial services, 13% from
manufacturing and 11% from IT and technology.
One-third of respondents are of C-level seniority or
higher; one-third are senior vice-presidents, heads
of department or of equivalent seniority; and the
remaining one-third are other senior managers
representing a range of industries. Just over half of
respondents (58%) work for companies with
annual revenues of up to US$5bn; the remaining
42% have annual revenues above US$5bn. The
geographical split is as follows: 30% North
America, 30% Europe, 30% Asia-Pacific, and the
remainder from the rest of the world.
2. A series of expert and executive interviews.
The EIU interviewed the following experts and
executives for this report (listed alphabetically):
l Phil Abram, chief infotainment officer, GM
l Andrew Brem, chief digital officer, Aviva
l Jim Buczkowski, director of electronics and
electrical systems engineering, Ford
l David McCorquodale, UK head of retail, KPMG
l Mark Curtis, chief client officer, Fjord
l Davide Strusani, assistant director, economic
consulting, Deloitte
The Economist Intelligence Unit would like to
thank these interviewees for their time and
insights.
The report was written by Michael Kapoor and
edited by Pete Swabey.
About this
study

Hyperconnectivity is high on the corporate agenda.
The majority of executives believe that failure to
adapt to hyperconnectivity—the growing
interconnectedness of people, organisations and
machines that results from the Internet, mobile
technology and the Internet of Things—is the
biggest risk their organisation faces.
Executives generally feel positive about
hyperconnectivity—most say it presents more
opportunities than threats, and they believe they
are doing a good job of adapting to it.
But while experts warn of the need for
substantial change to meet the challenges of
hyperconnectivity, only about one in five survey
respondents expect to restructure “radically” as it
intensifies in future. These are the findings of a
study by The Economist Intelligence Unit,
sponsored by SAP. The study, which is based on a
global survey of 561 executives, examines their
views on hyperconnectivity and its impact on their
organisation.
The key findings are as follows:
Adapting to hyperconnectivity is a matter of
survival, most executives agree. Six out of ten
survey respondents agree that failing to adapt to
hyperconnectivity is the biggest challenge their
company faces. This view was especially common
among retailers, reflecting the considerable
disruption seen in this sector in the last decade.
Hyperconnectivity is nevertheless viewed
positively, and organisations believe they are
adapting well. Eight out of ten respondents
believe that hyperconnectivity has been beneficial
for their organisation, and only one-third say it
presents more threats than opportunities. This may
reflect the fact that its impact within organisations
has been broadly positive by boosting
collaboration, for example.
However, the extent to which organisations have
adapted is limited. Under half of respondents
have introduced digital skills training, and while
experts predict that it calls for deep organisational
change, just under one in five (19%) expect to
reshape their business “radically” in response to
hyperconnectivity.
The Internet is still seen as having more
potential to be revolutionary than mobile
technology and the Internet of Things (IoT). This
is true even among industries such as
manufacturing, in which embedded IoT
connectivity is expected to have far-ranging
implications. This suggests that companies expect
the future impact of hyperconnectivity to be a
continuation of historical trends, rather than
introducing new and unprecedented changes.
Executive
summary

Executives see digital offerings from established
competitors—not start-ups—as their biggest
source of competitive pressure. The threat of
disruption by a Silicon Valley start-up is one of the
most widely discussed challenges businesses face
today, but in fact more respondents say they have
felt severe or moderate competitive pressure from
the digital strategies of their established
competitors.
Hyperconnectivity is seen as important, but
there are signs of inertia or complacency. Experts
interviewed for this report warn of the need for
“deep” and “fundamental” organisational change,
and the risk of “irrelevance”. While they
acknowledge hyperconnectivity’s significance,
most respondents give few signs of this kind of
radical action. Time will tell if their confidence is
merited.

It is not yet known how many smart watches—a
recent high-profile extension of hyperconnectivity—
Apple has sold since they were introduced in April
2015. Market watcher Slice Intelligence, which
analyses US consumer spending, believes the
number to be around 2.5m worldwide, which
suggests that annual sales will be around 11m units.
This is not a bad start for a new product, but it’s
a drop in the ocean compared with the 60m-plus
iPhones sold in the first quarter of 2015 alone.
Observers are eagerly watching for clues whether
the Apple Watch will be a short-lived toy, with
limited functionality and a fierce price tag, or
whether it will follow the lead of earlier Apple
products, from the iPod to the iPad, and create a
new market segment.
Mark Curtis, chief client officer at service-design
consultancy Fjord, is among the believers. Sales
will be big, he expects, “because you don’t have to
take them out of your pocket”. It’s the sort of
simple advantage that has the potential to change
consumer behaviour—and in so doing change the
face of business.
In October 2014 The Economist Intelligence Unit
(EIU) published The hyperconnected economy, an
examination of how the rapid increase in the
interconnectedness of people, organisations and
objects seen in the last 30 years is affecting the
global economy. It found that from a global
perspective, this hyperconnectivity is a tide that
raises all boats—in fact, hyperconnectedness is
expected to be especially valuable for developing
economies.
But for organisations, it poses challenges as
well as opportunities. Look no further than the
industries disrupted by online media delivery or
mobile apps, such as publishing or camera
manufacturing, to see how high the stakes are.
In the second phase of the hyperconnected
economy programme, therefore, we investigate the
organisational impact in more detail through a
survey of executives and a series of expert
interviews (see “About this study”).
This reveals that businesses are well aware of
the significance of hyperconnectivity—indeed, the
majority believe that adapting to it is the key
challenge their organisation faces.
But there are also signs of a degree of
complacency. The majority of companies believe
they are doing a good job of adapting to
hyperconnectivity. Yet while experts warn of the
need for substantial changes, there is little
evidence in our survey sample that radical
measures are under way.
Introduction

Organisations are well aware of how significant
hyperconnectivity is for their future, this study
reveals. Nearly six out of ten (59%) respondents
agree that failing to adapt to hyperconnectivity is
the biggest danger faced by their company.
Predictably, its importance is most keenly felt in
those industries that have been most acutely
affected by the Internet so far. More than two-
thirds (68%) of retailers say that the need to adapt
to hyperconnectivity is their company’s biggest
challenge, for example, with a well above-average
44% saying that it “presents more threats than
opportunities” (compared with one-third of all
respondents). This is not surprising given the
disruption caused to their industry over the past
decade or more.
A wave of retailers, from the bookseller Borders
to the video chain Blockbusters, has been driven
out of business as sales have migrated to the net.
More recently, retailers have been struggling to get
to grips with omnichannel retail, linking different
sales platforms such as physical stores, the
Internet and smartphones. These have often been
launched as separate divisions and profit centres,
leading to unfortunate outcomes, such as the
refusal by a retailer, for example, to accept at a
physical store returned items that had been bought
online.
Addressing this situation requires “fundamental
change”, says David McCorquodale, head of retail
Understanding the challenge
1
Agree Disagree Don’t know
Consumer goods
Financial services
Healthcare, pharmaceuticals and biotechnology
IT and technology
Manufacturing
Retailing
Chart 1. The majority of firms believe that failure to adapt to hyperconnectivity is their
organisation’s biggest risk
Failure to adapt to hyperconnectivity is the biggest risk that our organisation faces
(% respondents)
Source: The Economist Intelligence Unit survey, May 2015.
45 33 21
64 24 12
55 33 13
67 29 5
60 30 10
68 21 12

at KPMG. Sometimes, even established retailers are
at a surprisingly early stage here. UK retailer Marks
& Spencer only took control of its own website last
year; previously its online sales had been
outsourced to Amazon. Now, it has relaunched
some of its stores to offer omnichannel services,
with iPad-wielding sales assistants and Internet
kiosks allowing customers to buy items online if
they are not available in-store.
Retail remains one of the starkest examples of
the upheaval that can be wrought by rapidly
changing consumer behaviour enabled by new
connectivity, but the same argument applies to
many other sectors. Some of these sectors may be
underestimating hyperconnectivity’s disruptive
potential, the survey suggests.
Only 45% of consumer goods companies, for
example, consider hyperconnectivity to be their
greatest threat (see chart 1). In fact, these
companies are arguably among the most exposed.
Hyperconnectivity is disrupting the retail channels
through which they reach customers. It is also
assisting the globalisation of manufacturing, which
affects the goods they sell, and it is empowering
customers to provide feedback over the Internet
and social media, which affects everything from
branding to marketing.
Nike, for example, has transformed itself from a
sportswear maker to a fitness and lifestyle brand,
using social media to foster communities and
driving customer engagement through mobile
fitness apps. Car companies are integrating digital
connectivity both into their production and into
the products themselves, thereby improving
component design and mechanical reliability.
Most companies have acknowledged the scale of
the challenge posed by hyperconnectivity, the
survey reveals. However, it also suggests that they
have not acknowledged how much they will need to
change.

The three components of hyperconnectivity, as
defined in this study, are the Internet, mobile
technology and the Internet of Things. It is not
surprising that for the majority of respondents the
first of these—the Internet—has had a
revolutionary or significant effect on their
organisation so far (84%, versus 71% for mobile
and 71% for the IoT).
It is surprising, however, that respondents are
most likely to say that the Internet will have such
an effect in the next three years (80%, versus 75%
for mobile and just 57% for the IoT).
Even among manufacturers, only 61% believe
the IoT will have a revolutionary or significant
effect. This is especially surprising given the
transformational impact that the embedded
systems are expected to have both on the
manufacturing process and on the resulting
products. This suggests that respondents might be
more focused on the hyperconnectivity trends they
know and understand than the ones that are still
emerging.
This helps to explain why respondents are
remarkably confident about their progress in
adapting to hyperconnectivity. Overall, a
significant majority (69%) say they are doing a
decent job of adapting to hyperconnectivity—even
in the least confident sector (healthcare), around
two-thirds of respondents reckon they are adapting
well.
This confidence may also reflect the fact that for
many respondents, hyperconnectivity has had a
positive organisational impact so far. For example,
45% believe that collaboration, both within and
between divisions, has improved as a result of
hyperconnectivity.
The most commonly cited organisational impact
of hyperconnectivity is that business processes
have accelerated, as identified by 47% of
respondents. Companies appear to be reacting to
this acceleration of pace through automation: the
most common organisational response to
hyperconnectivity is to have automated business
processes (46% of respondents).
Nonetheless, respondents’ bullishness masks
fairly limited progress. For example, only 39% have
introduced digital skills training. With companies
from banks to shops saying that their offerings
need to span web and physical stores and
manufacturers talking of the importance of
digitalisation to improving efficiency, digital skills
might be expected to be standard across industries
by now.
Many respondents believe that the continued
growth of hyperconnectivity will change power
dynamics in the organisation, with 45% saying the
control of central management will be reduced.
This is a positive indication, given the
recommendation of Fjord’s Mr Curtis that
companies need to become more agile, with less
rigid hierarchies, if they are to evolve at the pace of
hyperconnectivity.
Mr Curtis likens the process to the different
states of matter. Many companies are still in a solid
Organisational adaptation
2

On autopilot
“Infotainment has become a core source of
competitive advantage for the auto industry,”
according to Phil Abram, chief infotainment officer
at US car manufacturer General Motors. Now that
engine and component design are increasingly
standardised and fuel economy is regulated, in-car
information and entertainment systems are among
the few ways in which carmakers can differentiate
their products these days.
GM is currently rolling out 4G connectivity
across its vehicle range worldwide, offering its
customers more rapid Internet access on the
move. Mr Abram says that “the essential elements
of an infotainment system do not vary by
[geographical] market, although the detail
components might”.
Another iconic US car maker, Ford, gained a
competitive edge by launching an effective
infotainment system back in 2007, ahead of many
of its rivals. However, it damaged its reputation
with a glitch-ridden upgrade some time later,
which is now being replaced by a simpler, more
reliable system.
In reality, both companies are largely
outsourcing the work for these infotainment
systems to companies like Microsoft, which have
developed software that allows people to link
their smartphones to the car’s own systems. The
carmakers themselves are concentrating many of
their own resources on the information side,
feeding car-performance information to drivers
and dealers to allow for timely maintenance, and
to their own development teams so that real
information continuously informs product
development and production.
According to Jim Buczkowski, Ford’s director of
electronics and electrical systems engineering,
one challenge is the need to sieve the mass of
information now available from in-car sensors to
extract that which is usable. Ford hired in a chief
data and analytics officer at the end of last year to
co-ordinate these efforts in what Mr Buczkowski
describes as a “company reorganisation”.
In other words, these companies are putting
some “meat on the bones” of theories of smart
production and product development as they
start to get to grips with analysing the wealth of
data they can now generate. They are also
keeping a keen eye on developments from tech
competitors such as the search engine Google,
which has a project to develop a driverless car.
GM has worked with Google (and Apple) on
bringing phone integration to its vehicles. Phone
integration allows users to interact with select
applications from their smartphones through the
vehicle systems (steering wheel controls, touch
screen, etc.).
“We make sure that we can change with the
market by building platforms,” he says, adding
that driverless cars could completely change the
market for everything from commuter cars to
taxis. Rather than fighting to protect its existing
customer base, GM plans to ensure that it has the
products to sell to the new type of customer.
state, stable and predictable but slow to react to
change. More advanced firms have become fluid,
with adaptable structures that can flow into new
areas as they emerge. The real need, he says, is for
companies to become like gas—formless beasts
that exist to cater for constantly changing
customer demand.
Indeed, hyperconnectivity calls for “deep
organisational change”, according to Mr Curtis.
However, only 19% of survey respondents believe
they will have to restructure “radically”.
The same proportion (19%) has introduced a
chief digital officer (CDO). There is some evidence
to suggest that appointing an executive to lead
digital activities is a growing trend: the CDO Club (a
global network of chief digital officers) says that
the number of CDOs is doubling each year—to
1,000 worldwide in 2014 and an expected 2,000
this year.
US motor giant General Motors, for example,

hired Phil Abram as its chief infotainment officer
last year to advance the information and
entertainment systems built into its cars.
Previously, Mr Abram had worked for electronics
firms such as Japan’s Sony as the carmaker
recognised that shifting consumer tastes meant
looking beyond its traditional expertise. Similarly,
Aviva, the international insurer, hired Andrew
Brem as its chief digital officer in August last year
to overhaul its digital interaction with customers.
His background was with utility and mobile-phone
companies, rather than in insurance.
It is debatable whether a new executive role is
the best way for every company to adapt to
hyperconnectivity, so the low base of CDOs in our
sample is not necessarily evidence of inertia.
Nevertheless, there are signs in the survey data
that on an organisational level, companies are
overly confident of their ability to weather the
hyperconnectivity storm. When asked about how it
has affected their competitive stance, the story is
quite different.
Revolutionary
impact
Significant
impact
Limited
impact
No impact Don’t know /
not applicable
Internet
Mobile
IoT
Chart 2. More respondents believe the Internet will have a more significant or revolutionary impact in the
next three years than the Internet of Things
What impact do you expect the following technologies to have in the next three years?
(% respondents)
34 46 13 3 4
33 42 14 5 6
31 26 18 6 18

Much has been written about the disruptive
potential of digital companies, from big retailers
such as Amazon and eBay to person-to-person
platforms such as Airbnb, a site allowing people to
rent out their houses to people who might
otherwise choose a hotel. The impact of these
companies has been strong, driving scores of
shops, magazines and indeed hotels to the wall as
they lose sales to online competitors.
Nonetheless, our survey finds that executives
are more concerned with competition from existing
companies than with being wiped out by a wave of
new-tech upstarts: some 57% say that they have
faced notable competitive pressure from digital
products launched by established companies,
compared with less than half who feel pressure
from digital start-ups. Respondents expect
competition on both fronts to grow in future.
This is not as surprising as it might seem at first
glance. While the likes of Amazon and Airbnb are
highly visible owing to their novelty, in many
industries established players remain dominant. In
these sectors, the main contribution of digital
start-ups has been to force companies to adopt
digital practices.
Supermarkets offer an example. In many
countries, online groceries were first launched by
Internet-only brands, such as Ocado in the UK. As
time went on, supermarkets launched their own
Internet-based grocery services. Online sales still
account for only a small proportion of grocery
shopping, but the big supermarket chains, from
Carrefour in France and Asia to Walmart in the US,
are spending heavily on their own online offerings.
These operate in parallel with services such as Click
& Collect, which exploit their big store networks
and provide an advantage over Internet-only
retailers such as Amazon.
The strategic significance of such moves online
is evident in the fact that supermarkets appear to
be underpricing this service. According to HSBC’s
retail analyst Dave McCarthy, the true cost of a
home delivery is around £20 (about US$30),
whereas supermarkets typically charge £3-4. In the
UK alone, he estimates that this underpricing costs
the major supermarket chains £100m a year.
Clearly, though, supermarket retailers consider this
burden to be preferable to the losses suffered by
rivals which are only now struggling to break into
the online market.
It is a similar story in other sectors.
International banks, from HSBC to Citibank, have
started to offer smartphone apps allowing people
to make payments and complete other transactions
from mobile devices.
Other sectors of the financial services industry
are following suit. Insurance, for example, has
lagged behind banking to date, but that is
beginning to change as the sector is waking up to
the competitive consequences of hyperconnectivity
says Mr Brem at Aviva.
“It’s only a matter of time before a digital
disrupter hurts insurers,” he says, pointing to the
impact of digital start-ups from PayPal to the taxi
Market disruption
3

Will create severe
competitive pressure
Will create moderate
Will create limited
Will create no
Don’t know /
not applicable
Start-ups driven by digital technology
Digital offerings from our traditional competitors
Established companies that are using digital technology to enter our market(s) for the first time
Chart 3. Respondents are more likely to see digital offerings from traditional competitors as sources of
severe or moderate competitive pressure than start-ups
How do you expect the following to affect competition in the next three years?
(% respondents)
25 33 20 17 6
23 43 20 9 4
22 35 25 13 5
service Uber. “With Uber, it’s one click and your car
is on its way. You can see it approach on a map. You
know who your driver is. No cash, no hassle. People
will start to resent firms that do not offer this [kind
of] convenience.”
He points out that digital has already
transformed many areas of finance, from payments
to lending and investing, but that insurance has
yet to embrace the change. Customers now expect
a choice of ways to interact with their insurer or
broker, in person, over the phone, online or
through chat rooms. That means insurers must join
up their services in the same way as omnichannel
retailers.
Mr Brem adds that “we have a mass of data
allowing us to personalise offerings to customers”.
Motorists can use data from their cars to show that
they are safe drivers, reducing premiums, while
homeowners and people buying health insurance
can be monitored to show their risk levels, allowing
them to take out cover tailored to their needs and
lifestyles. “It’s a great opportunity—and we will
become irrelevant if we don’t take it.”
Fortunately, just as hyperconnectivity exposes
companies to new sources of competition, it also
allows them to exert some pressure of their own.
Nearly half of respondents (47%) say their
organisations have reacted to the competitive
pressure resulting from hyperconnectivity by
entering new markets—far more than those who
have lowered prices (28%) or exited the market
(18%), for example. Meanwhile, 41% say
hyperconnectivity has allowed them to identify new
markets that are suitable for them to enter.

Our study shows that companies are well aware of the
significance of hyperconnectivity. The unprecedented
uptick in interconnectedness that began with the
Internet, was extended by mobile technology and
now continues with the Internet of Things is not just
a technological trend—it is one of the era’s defining
characteristics. It’s little wonder that companies see
adapting to it as their greatest challenge.
Their confidence in their ability to do that
should not be dismissed out of hand. Compared
with the aftermath of the dot-com crash, when
anyone making grand claims about the Internet
was treated with suspicion, there is now
widespread acknowledgment of the significance of
digital technology. It stands to reason, therefore,
that organisations have made some progress in
putting it to use.
However, the consensus among experts in the
field is that gradual progress will not be enough to
meet the growing competitive pressure that
companies will encounter as hyperconnectivity
intensifies. They believe radical restructuring is in
order—and yet only one in five survey respondents
expect to undertake such an endeavour.
This implies a deficit in leadership. Whether or
not they appoint an executive with specific
responsibility for digital business, organisations
will only effect substantial change if it is led from
the top. The hyperconnected economy calls for
hyperconnected leaders.
Conclusion

Appendix:
Survey
results
Percentages may not
add to 100% owing to
rounding or the ability
of respondents to
choose multiple
responses.
In which of the following business functions does the Internet play a crucial role at your organisation?
Select all that apply.
(% respondents)
Finding new customers
Communicating with customers
Working with suppliers
Managing internal operations
Developing and delivering products and services
Collaborating internally
80
80
73
73
73
72
In which of the following business functions does mobile technology play a crucial role at your organisation?
(% respondents)
68
68
53
53
50
42

In which of the following business functions does the Internet of Things (IoT) play a crucial role
at your organisation?
(% respondents)
46
41
40
37
32
32
In which functions do you expect the Internet to play a crucial role in three years’ time?
(% respondents)
77
77
75
74
73
73
In which functions do you expect mobile technology to play a crucial role in three years’ time?
(% respondents)
74
67
61
60
59
57

In which functions do you expect the Internet of Things (IoT) to play a crucial role in three years’ time?
(% respondents)
59
50
49
49
45
45
Revolutionary
impact
Significant
impact
Limited
impact
not applicable
Internet
Mobile
IoT
How would you describe the impact that the Internet, mobile technology and the Internet of Things (IoT)
have had on your organisation so far?
(% respondents)
44 40 11 3 1
24 47 18 4 6
18 23 27 12 20
Revolutionary
impact
Significant
impact
Limited
impact
not applicable
Internet
Mobile
IoT
What impact do you expect them to have over the next three years?
(% respondents)
34 46 13 3 4
33 42 14 5 6
31 26 18 6 18
Agree Disagree Don’t know / not applicable
Hyperconnectivity has been beneficial for my organisation
Hyperconnectivity has been beneficial for my industry
Hyperconnectivity presents more threats than opportunities
Failure to adapt to hyperconnectivity is the biggest risk that our organisation faces
My organisation is doing a good job of adapting to hyperconnectivity
Do you agree with the following statements?
(% respondents)
86 7 7
83 9 8
30 56 13
59 30 11
69 18 13

Have created severe
Have created moderate
Have created limited
Have created no
Don’t know /
not applicable
To what degree have the following factors placed competitive pressure on your firm in the last three years?
(% respondents)
17 32 23 22 6
17 40 29 10 4
14 35 27 18 6
Will create severe
Will create moderate
Will create limited
Will create no
Don’t know /
not applicable
And how do you expect them to affect competition in the next three years?
(% respondents)
25 33 20 17 6
23 43 20 9 4
22 35 25 13 5
How has your organisation adapted to the competitive pressure resulting from hyperconnectivity?
(% respondents)
Lowered prices
Lowered margins
Entered new markets
Exited markets
Divested divisions
Acquired one or more competitors for their digital capabilities
None of the above
Don’t know
28
28
47
17
19
26
14
4

Which of the following strategies have you adopted as a result of hyperconnectivity?
(% respondents)
Diversified our channel partners
Used digital channels to enter new markets (ie, sell new categories of product or service)
Launched products or services that are only available through digital channels
Adopted dynamic pricing for sales through digital channels
Sold directly to customers for the first time
Offered prices that are only available through digital channels
None of the above
Don’t know
38
38
35
29
25
25
12
3
How do you think the continued growth of hyperconnectivity will affect your organisation’s position
within your industry in the future?
(% respondents)
Digital channel partners will become the dominant force in our markets
We will acquire one or more digital start-ups
Our market share will be significantly reduced as a result of digitally-enabled competition
We will merge with a more digitally capable organisation
We will divest or close production and focus on distribution
We will divest or close distribution and focus on production
None of the above
Don’t know
34
31
19
17
15
14
19
8
What impact has hyperconnectivity had on global competition in your industry?
(% respondents)
Hyperconnectivity has:
Lowered barriers to entry for foreign companies in the developed economies in which we operate
Lowered barriers to entry for foreign companies in the developing economies in which we operate
Boosted local competition in the developing economies in which we operate
Boosted local competition in the developed economies in which we operate
Helped us identify new markets that are suitable for us to enter
None of the above
Don’t know
33
30
35
32
40
11
5

What impact has hyperconnectivity had on your supply chain so far?
(% respondents)
Hyperconnectivity has:
Improved our ability to find suppliers from around the world
Improved our ability to select suppliers competitively
Improved our ability to work with international suppliers
Reduced our supply costs
Increased the range of materials we can purchase through our supply chain
Increased visibility into our supply chain
Increased the complexity of our supply chain
Improved the reliability of our supply chain
None of the above
Don’t know
34
39
38
35
27
33
20
26
8
6
What impact do you think the continued growth in hyperconnectivity will have on your company’s
global business and its supply chain?
(% respondents)
Declining barriers to market entry will help us grow internationally
Declining barriers to market entry will place us under increasing pressure in our established markets
An increasingly globalised supply chain will allow us to reduce costs significantly
An increasingly globalised supply chain will expose us to greater risk
Increasing demand from global markets through digital channels will require us to expand globally
Increasing automation of supply chain transactions will expose us to greater risk
34
39
45
26
27
16
What impact has hyperconnectivity had on your relationship with customers?
(% respondents)
Customers mostly hear about us online
Customers typically check online reviews or social media before purchase
Our online reputation is the biggest influence on customer perception of our company
We are reaching customers around the world for the first time through digital channels
Digital channels allow us to search proactively for customer demand
Digital channels have allowed more direct contact between customers and employees
Digital channels are our principal means of communicating with prospects and customers
29
38
34
31
35
39
20

Which of the following measures have you adopted as a result of hyperconnectivity?
(% respondents)
Taken efforts to improve our visibility and reputation on social media that have improved our business
Used digital processes to customise products and services to individual customers
Fed customer information from digital channels into product development
Embedded digital functionality into our products to measure customer use and/or improve customer service
Built an integrated view of our customer interactions across all digital channels
Boosted customer privacy as a way to differentiate our products and services
49
40
37
37
33
30
What impact do you think the continued growth of hyperconnectivity will have on your interactions
with customers in the future?
(% respondents)
Products and services will be increasingly tailored to customers’ individual needs
Input from customers will be deeply integrated into product development
Customer service will be mostly automated
A more globally diverse customer base will challenge our ability to communicate with and engage with customers
Our business will be more vulnerable to negative online publicity
Mobile will become our primary customer interaction channel
51
41
33
33
32
31
What impact has hyperconnectivity had on your organisation?
(% respondents)
Business processes have accelerated
Collaboration within divisions and geographies has improved
Collaboration between divisions and geographies has improved
Organisational strategy has become more data-driven
The pressure we are under to innovate has increased
Our ability to innovate has increased
Organisational strategy has become more effective
47
45
45
42
33
32
29

What organisational measures has your company introduced as a result of or to derive greater benefit
from hyperconnectivity?
(% respondents)
Automated business processes
Adopted agile development and/or project management techniques
Introduced digital skills training
Outsourced functions to accelerate digitisation
Flattened the organisational hierarchy
Appointed a chief digital officer
46
39
39
33
25
19
How do you think the continued growth of hyperconnectivity will affect your organisation in the future?
(% respondents)
Our ability to effect substantial organisational change will increase
We will reduce our staffing levels as more work is automated
We will match employment opportunities to candidates faster and more effectively
Information overload will damage the wellbeing of our employees
Our organisation will have to radically restructure
Ability of central management to control the organisation will be reduced
39
38
37
24
23
22
Better than average Worse than average Don’t know
Profit
Revenue growth
Innovation
Organisational agility
How does your organisation’s performance compare with the average in its industry?
(% respondents)
73 18 9
71 21 8
63 25 12
52 35 13

$500m or less
$500m to $1bn
$1bn to $5bn
$5bn to $10bn
$10bn or more
What are your organisation’s annual revenues in US dollars?
(% respondents)
0
22
36
14
28
North America
Asia-Pacific
Western Europe
Latin America
Middle East
In which region are you based?
(% respondents)
30
30
30
7
2
Board member
CEO/President/Managing director
CFO/Treasurer/Comptroller
CIO/Technology director
CMO/Head of marketing
COO/Head of operations
CDO (Chief digital officer)
CXO (Customer experience officer)
Other C-level executive
SVP/VP/Director
Head of business unit
Head of department
Manager
Other
Which of the following best describes your job title?
(% respondents)
2
6
4
8
3
2
1
1
3
12
6
19
31
2
Financial services
Manufacturing
IT and technology
Healthcare, pharmaceuticals and biotechnology
Consumer goods
Retailing
Energy and natural resources
Aerospace and defence
Automotive
Chemicals
Professional services
Telecoms
Transportation, travel and tourism
Construction and real estate
Logistics and distribution
Education
Government/Public sector
Agriculture and agribusiness
Entertainment, media and publishing
What is your primary industry?
(% respondents)
16
13
11
7
6
6
5
4
4
4
4
4
4
3
3
2
2
1
1

Finance
IT
Sales
General management
Human resources
Marketing
Procurement
Strategy and business development
Supply-chain management
Operations and production
Customer service
Information and research
Risk
R&D
Legal
Other
What is your main functional role?
(% respondents)
11
11
11
10
9
9
9
7
5
4
3
2
2
2
1
3

Whilst every effort has been taken to verify the accuracy of this
information, neither The Economist Intelligence Unit Ltd. nor the
sponsor of this report can accept any responsibility or liability
for reliance by any person on this white paper or any of the
information, opinions or conclusions set out in the white paper.

London
20 Cabot Square
London
E14 4QW
United Kingdom
Tel: (44.20) 7576 8000
Fax: (44.20) 7576 8476
E-mail: london@eiu.com
New York
750 Third Avenue
5th Floor
New York, NY 10017
United States
Tel: (1.212) 554 0600
Fax: (1.212) 586 0248
E-mail: newyork@eiu.com
Hong Kong
6001, Central Plaza
18 Harbour Road
Wanchai
Hong Kong
Tel: (852) 2585 3888
Fax: (852) 2802 7638
E-mail: hongkong@eiu.com
Geneva
Boulevard des
Tranchées 16
1206 Geneva
Switzerland
Tel: (41) 22 566 2470
Fax: (41) 22 346 93 47
E-mail: geneva@eiu.com

Hyperconnected organisations: How businesses are adapting to the hyperconnected age

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (17)

Similar to Hyperconnected organisations: How businesses are adapting to the hyperconnected age

Similar to Hyperconnected organisations: How businesses are adapting to the hyperconnected age (20)

More from The Economist Media Businesses

More from The Economist Media Businesses (20)

Hyperconnected organisations: How businesses are adapting to the hyperconnected age