The ecosystem era is here. Are you ready?

Build it yourself and fall behind. Build it with others and go further, faster together. 

In brief

• Ecosystems are collaborative business models that can outperform competitive ones.
• Asia-Pacific business leaders are adapting to a complex and dynamic risk landscape, and they understand that more value can be uncovered in partnerships than in isolation.
• Leveraging ecosystem-driven technology solutions is already helping companies in the region to embrace AI, adopt cloud computing and elevate risk management.

Almost three quarters (71%) of CEOs, according to the latest EY CEO Outlook Pulse Survey, plan to either accelerate or maintain their rate of digital transformation over the next 12 months.

This digital transformation is occurring as business leaders also grapple with an increasingly complex interplay of geopolitical conflict, cyberthreats, macroeconomic and market volatility, regulatory risk and ESG imperatives.

The rapid pace of change and the relentless demand for innovation make it harder and harder for businesses to keep up. It is impossible to have all the skills, creativity and knowledge within any one organization.

Asia-Pacific business leaders know this, which is why they are embracing the ecosystem opportunity. 

Cloud computing shows why the sky’s the limit

EY teams are also leveraging ecosystems to help our clients build strong business cases to take advantage of cloud technology.

Historically, businesses big and small stored their data and software on their own hard drives, servers, and systems. However, the surge in cloud computing is enabling these companies to migrate their applications, infrastructure, and data to cut costs, enhance security, boost resilience, innovate, and scale up their operations.

Take just one example. On 31 December 2027, SAP will stop providing mainstream maintenance for its legacy Business Suite 7 product.1 This may be several years away, but it means that tens of thousands of corporations must now move away from monolithic, on-premises legacy systems to cloud-based digital platforms. What they’ll get is the flexibility of frequent releases and rapid access to improved features and functions.

EY and SAP teams have built an ecosystem to help our clients transform with certainty at speed and scale by moving to SAPs S/4HANA cloud solutions. Leveraging SAP’s Business Technology Platform (BTP) integration and extension suite delivers the capabilities EY clients need to differentiate and positions them to innovate faster and disrupt other businesses.

What will this look like?

One obvious area is sustainability, where government regulation, consumer expectations and corporate leadership are evolving at lightspeed. We know around four in 10 (41%) Asia-Pacific CEOs have placed sustainability at the forefront of their capital allocation strategies. But we also know ESG disclosures by Asia-Pacific companies are falling short of the information investors need to make informed decisions.

Meeting investor expectations and regulatory standards will require new technical capabilities to disclose greenhouse gas information. While this is a rapidly evolving space, SAP has announced that its investments in green ledger and new transactional carbon accounting capabilities will only be available to cloud customers.

This is just one example of why businesses will remain frozen in time unless they make the choice to move to the cloud. Yes, they can make slow, costly bespoke adjustments to their on-premises systems. But they can’t take advantage of the millions of dollars that cloud providers invest into their platform each year, nor tap into the talents of tens of thousands of developers responding to real-world business challenges across every sector of the global economy. Put this way, the power of ecosystems is crystal clear.

Responding to risks with clarity and confidence

Companies today navigate a complex landscape with risks at every turn.

When we asked CEOs across Asia-Pacific what risks would influence their business’ performance over the next 12 months, five factors stood out for having either a “very significant” or “significant” impact: geopolitical conflict (62% of CEOs); digital disruption and cyberthreats (57%); macroeconomic and market volatility (56%); regulatory risks (55%); and ESG imperatives (54%).

How do you choose which ecosystem is right for you?

1. Start with your sense of purpose: If your goal is to deliver a specific outcome – for example, to reduce backend costs – then your ecosystem should be built around the parties that can deliver efficiency at the lowest risk to avoid future debt and regret. But if you are looking to transform your front office function, a potentially entirely different ecosystem will be in play.
2. Avoid the supplier mentality: We see it all the time, where tech contracts are sent out to tender, and business leaders confuse a supplier with an ecosystem. But using a supplier as a commodity to achieve an outcome is not an ecosystem. Creating new value together is the name of the game.
3. Keep up with the market opportunity: Don’t set and forget your strategy. The market, and therefore your opportunity, is always evolving. It’s important to consider changing needs and use your ecosystem to maximize your flexibility in response.
4. Invest in your technology talent: All companies are scrambling to source the right tech skills, but when you enter an ecosystem, you must ensure your IT team is up to the task. This means adopting a multi-faceted talent attraction and retention strategy to ensure you can connect the dots between your aspirations and actual ecosystem outcomes.
5. Act fast: The pace of change is accelerating so rapidly that time is a scarce commodity. Work out what you are trying to achieve and then act on it – and fast. You don’t have a moment to wait.