Over the last seven years we’ve researched what companies are doing to drive long-term, sustainable business success. This year we extend our focus with a new look at business sovereignty and a deeper look into AI. What are the biggest disruptors companies face? What strategies are companies adopting? What priorities are they placing on the critical factors that drive success? What technologies are they employing? And how has the changed over the last year. Take a look at our survey results to find out.
Please enjoy the summary* below. For the full research, please visit our sponsor Dassault Systèmes (registration required).
Table of Contents
- Companies Transforming in Response to Shifting Risk and Disruption
- Rising Business Risk and Disruption
- Significant Shift in Risk and Disruption this Year
- Responding to Risk and Disruption
- Shifting Long-Term Success Drivers
- Shifting Strategy and Initiative Drivers
- Business Sovereignty is Prevalent
- ESG Drivers are Consistent with Last Year, and Growing
- Technology’s Importance to Business Success
- Technology Supports Strategy and Drives Direct Value
- AI Targets Multiple Goals
- AI Faces Significant Challenges
- Conclusions and Recommendations
- About the Research
- Acknowledgments
Companies Transforming in Response to Shifting Risk and Disruption
Responding to Shifting Risk and Disruption
We’ve tracked continued increases in business risk and disruption over the seven years of this survey on long-term business success. It shows that risk and disruption are the default in global markets. The source of the risk varies, and this year’s survey of over 200 companies shows significant growth in the impact of financial market issues including tariffs and trade wars, along with political uncertainty and the effect of continued armed conflict in Europe.
Our prior surveys concluded that companies turn to innovation, agility, and digital transformation to overcome disruption. This year, we expanded our research to include two new strategic imperatives we see as increasingly important: cybersecurity and business sovereignty. Survey results show both are significant factors that must be considered for long-term, sustainable business success.
ESG for Sustainable Business Success
As always, the study looks at ESG (environmental, sustainability, and governance) in the context of long-term success and profitability. The results show that the vast majority, 86%, say that environmental sustainability is critical or important to the long-term success of their company. The study also shows that ESG strategy drivers, including internal goals for net zero, customer demands, and increased calls for transparency like product passports, have increased.
Digital Transformation is Crucial to Success
As before, survey responses show the importance of digital transformation to long-term success. This year, we added a deeper line of inquiry into the adoption and strategic value of AI (artificial intelligence). Not surprisingly, companies have broad goals for AI, and it is delivering business value. Let’s dig into the details on how companies plan to focus on the essential pillars of long-term business sustainability to ensure business success.
Significant Shift in Risk and Disruption this Year
The Impact of Geopolitical Factors Grew
Risk and disruption factors negatively impacting business shift year to year. This year, the drivers experienced a significant shift. Financial market issues grew steadily over the last four years, and are now the most commonly reportednegative factor. This year it grew by 24%, likely due to recent tariffs and trade wars. Similarly, political uncertainty rose sharply this year, increasing by 74%. Fallout from armed conflict also increased substantially last year, although negative impacts are still less common than from other factors.
Cybersecurity Threat is Significant
This year’s research began tracking the negative business impact of cybersecurity. This digital threat debuted as the second most commonly reported risk over the last year and was reported by almost two-thirds of respondents. Companies today can’t ignore online threats, and we expect this to continue as companies become increasingly digitalized.
Other Factors Subsided
Risks come and go. For example, the impact of global health concerns dropped significantly this year. Workforce issues continue to plague companies, but have dropped slightly in prevalence after a significant increase last year. The impact of energy shortages also subsided somewhat, perhaps as companies learned to deal with issues and uncertainty decreased. Despite these reductions, of course, any of these could become significant issues in the coming year, demanding vigilance.
Conclusions and Recommendations
Be Prepared to Respond with Agility
Although the underlying factors shift with the times, business risk and disruption continue to grow. Over the last three years, the issues leading to negative business impacts have shifted from supply chain disruptions to workforce issues to the current impact of global financial issues. To address the risk, companies are adjusting the focus of their actions. This year, companies are increasing emphasis and accelerating digital transformation, developing the workforce of the future, and creating supply chain resilience.
Continue Focusing on Long-Term Success, including ESG
In addition to addressing time-sensitive disruptors, companies must maintain focus on the fundamentals of business to be successful over the long term. Additional pillars that companies report are critical to long-term success include product/service innovation and agility, environmental and social responsibility, and developing the workforce of the future.
ESG drivers remain steady, although the demand for transparency, including product passports, has increased. Even in these challenging times, when priorities may falter, companies this year are 26% more likely to include ESG as a critical long-term success driver, and more companies are incorporating ESG priorities into their corporate strategy and actions.
Focus on Resilience and Explore Sovereignty
Supply chain resilience continued to grow in importance to long-term success. One approach to accomplishing this is seeking supply chain sovereignty. We observed companies putting significant emphasis on supply chain independence and found that many are also pursuing sovereignty in other areas, including technology and data sovereignty.
Extend Digital Transformation Strategies with AI, Cybersecurity
Digital transformation is seen as the most common factor impacting long-term success. It’s the most common area companies are accelerating to combat short-term disruption. Technology is essential to long-term business success and adds direct value. Two areas getting significant attention are AI and cybersecurity.
Cybersecurity, as a new focus, is top of mind for executives, not just technologists. It showed up as both a significant driver of long-term success and a significant risk that creates negative impacts on companies. Company leaders are also focused on AI and have a wide variety of goals, are adopting a variety of approaches, and are gaining value despite facing both business and technical challenges. We see a trend toward companies looking to their solution providers to help with holistic, industry- and application-specific solutions built into their existing solution platform to speed up and ease adoption.
Remain Vigilant and Prepare for Disruption
This survey, as the previous ones, makes it clear that company success and profitability are under siege by a variety of challenging and changing factors. To survive, companies will need to continue to monitor and adapt to risk and disruption. We believe those that digitally transform will be better positioned to overcome short-term risk and disruption and improve the performance in the pillars that allow them to achieve long-term success.
*This summary is an abbreviated version of the ebook and does not contain the full content. For the full report, please visit our sponsor Dassault Systèmes.
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