Organisations across both public and private sectors have reached a tipping point where they can no longer play in a world where they are not connected and open to their customers.

"Flourishing enterprises are typically those that work closely with their partners and suppliers and, more particularly, have strong, effective employee networks and engagement, says Rob Lee, managing director of IBM New Zealand.

The business landscape has fundamentally changed, says Lee, as he releases the New Zealand component of The Customer-activated Enterprise, a global survey among C-suite executives by the IBM Institute for Business Value (IBV).

"The emergence of social, mobile and digital tools means we're faced with a new dynamic, one where the customer has a greater say than ever before in their relationships with organisations," says Lee.

"It's forcing businesses to rethink how they work and has introduced the customer as the newest member of the C- suite."

Related: CIOs have a new boss -- customers: IBM

"The digitally activated customer moves to the top of the C-suite agenda," says Lee, quoting the report, which was based on interviews with 4183 CXOs in 70 countries. IBM interviewed 52 executives (CEOs, CFOs, CIOs, chief marketing officers and chief human resource officers) from public and private organisations in New Zealand. IBM says nearly half (42 per cent) of the local respondents are from government.

"What the survey is telling is a real recognition of the power of the customer, and how businesses - large or small - have to think about their strategy and how they are going to include customer input in their strategies and actions," he says.

"Customer expectations are having a dramatic influence on all aspects of the enterprise, everything from the development of new products and services, right through to long-term business strategies that will determine the very shape and nature of what a company stands for," he says.

"We're already seeing clients reshaping their business models to capitalise on this ability to understand and respond to customer influence. Mobile banking, for example, provides customers with information at their fingertips and aims to deliver a more convenient experience with more functionality than they'd expect in a branch."

Lee says the New Zealand results reveal organisations aim to position themselves for this shift by dramatically improving their understanding of customers, while increasing internal and external collaboration.

The majority (82 per cent) of New Zealand respondents anticipate truly understanding their customers within the next three to five years, up from just 16 per cent today. And while just 28 per cent of local respondents believe they strongly collaborate with customers today -- compared with 46 per cent internationally -- they expect to triple this to 96 per cent over the next three to five years.

Currently, 34 per cent of NZ executives believe they collaborate strongly with business partners and suppliers, compared to 47 per cent internationally. When asked about employee collaboration, just 32 per cent of New Zealand executives rated this as strong, compared to 50 per cent elsewhere globally.

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