India Inc is bullish on the country’s economic prospects with 88 percent of CEOs being optimistic about the Indian economy’s growth prospects over the next three years. Whereas 63 percent of the industry’s captains have expressed confident about the global economy in the short and mid-term, according to a report.
“Overall geopolitical uncertainties in the global economy, and growing instances of protectionism especially in the West, have probably contributed to a slight dip in the confidence towards the global economy,” KPMG said in its Disrupt & Grow: India CEO Outlook 2017 report, which took views from 130 CEOs of the country.
Besides Indian economy, the CEOs expressed their views on key factors affecting the growth of the organisations.
The importance of building greater trust among external stakeholders and customers is a priority for 75 percent of the organisations. More than 50 percent of CEOs want to invest in emerging technology to ensure the growth of the organisation.
The survey insists that three big threats to the growth are reputational risks, inability to cope up with emerging technologies and global economic factors.
What exactly are the CEOs doing to build a resilient organisation?
The report reveals that business transformation has become more prominent which means that companies will make significant changes to cater to customers’ needs and diversify their business models accordingly. About 54 percent CEOs said that were ready to transform their business their businesses to entirely different entities.
“With changing customer preferences and increasing affinity to technology, it is important to cultivate a “Digital First” mindset within the organisation, craft and execute simple user journeys and be agile to make changes on the fly,” said Sunil Sood, MD and CEO, Vodafone India.
The transformation requires investments in various sectors. About 85 percent of the CEOs said that they were ready to invest in new technologies such as Internet of Things, data analytics tools, and cognitive technologies.
Technology brings in complexity in the operating environment; more and more CEOs are hence relying on data-driven decision making. Eight out of every 10 CEOs are ready to go digital and invest in such infrastructure over the next three years, to enable them for strategic decision making.
Relying on digitally-driven analytics requires a safer cyber environment and preparedness for a cyber event. According to the report, There has been a significant increase in the number of organizations who are fully prepared for a cyber event in India. From 17% in 2016, 45 percent organisations are prepared for cyber crises such as ransomware attacks.
CEOs lay an increasing focus on data-driven decision making, thus making it crucial for them to chart out stronger strategies to build D&A capabilities. This is prompting CEOs to add ‘data’ as a big proposition to their investment plans.
While the pace of adoption may be quicker for global CEOs compared with that of their Indian counterparts — 12 percent of CEOs in India wish to become more data driven compared with 20 percent globally — CEOs are recognising data as the fundamental tool to achieve their other strategic goals, the report states.
What are the major areas of concern?
The current geopolitical landscape is pushing organizations to revisit their growth plans and strategise their organisations to make them geopolitically resilient.
According to the survey, approximately 21 percent of the CEOs are concerned the most about the impact of geopolitical risks.
Amidst the turbulence in the global economy, especially in the West, CEOs in India have a better growth outlook for the Indian economy.
“The last eighteen months have seen an unprecedented rise in geo political tensions across the globe and this accompanied by the U.S. elections and Brexit, has woken up India Inc. to a new challenge,” said Vikram Hosangady Head, Advisory KPMG, India.
To get ready for the constantly changing geopolitical landscape, companies are trying to meet individual needs of customers, rising costs and varying demands of customers.
High demands of customers lead to higher risks of inflation, which the companies need to be prepared for – all the time. Inflation determines the flow of products and services in the country. About 79 percent CEOs agree that any increase in inflation means that the increased costs are expected to get passed on to their customers.
Overall, risks to brands, embracing new technology and global economic factors top the list amongst factors impacting the growth of companies.