While the benefits of digitalisation are increasingly clear, the road towards becoming a truly digital organisation is for many companies a difficult and long journey to embark on. Recent research by Capgemini Consulting shows that only 7% of global organisations have evolved into a truly digital organisation, with the majority (56%) of companies on the verge of starting their transformation. According to the consulting firm, to successfully transform, companies not only need to develop digital capacities, they need to be dexterous – allowing them to seize digital opportunities.
The need to digitise operations is more and more recognised by the business world, as an abundance of research pinpoint the advantages of digital technologies. According to Accenture, for instance, digital has the potential to add a combined $1.36 trillion to the GDP of the world’s top 10 economies by 2020. Whereas the benefits of digitalisation are increasingly known, many companies are struggling to find the appropriate way to transform their organisation. As a result of which, according to Arthur D. Little, 80% of firms are facing lagging digital transformation maturity. To weigh in on the question ‘how to transform’ into a digital organisation, Capgemini Consulting* recently released its ‘Organising for Digital: Why Digital Dexterity Matter’ report.
The firm’s research, based on a survey of 274 industry executives from 135 companies across 28 countries, reaffirms other research as it shows that truly digital organisations – those that have redesigned their organisations to adapt to digital while investing significantly in technology – outperform their peers in a number of on key performance indicators. Digitalised companies perform particularly well when it comes to customer satisfaction (90% vs. 41% for all firms) and profitability (90% vs. 46%).
According to the consulting firm, in order to become a digital organisation, companies not only need digital capabilities, which allow them to improve the customer experience, boost employee engagement and enhance internal operations; they need to be nimble and flexible – dexterous – to be able to self-organise to deliver new value from digital technologies. “Digital dexterity allows organisations to seize opportunities – and respond to disruptions and changes – much more quickly than their traditional competitors,” the researchers explain.
Firms with a high level of digital dexterity experience more ease in establishing sought-after partnerships than their competition, 80% vs. 17%. In addition, they are more responsive to customer needs (73% vs. 10%), better at finding talent (73% vs. 13%) and better at self-organising at speed (40% vs. 8%).
Although the benefits of digital dexterity are substantiated by Capgemini’s research, the firm notes that very few organisations can be called a dexterous digital organisation. The firm has identified the four stages of the journey towards becoming a digital organisation, and finds that only 7% of the surveyed companies have made the full transition to this level of sophistication. The vast majority (56%) of companies are still in the ‘initiating’ phase and are mobilised to start their transition. According to the research, these companies are investing in digital expertise and initiate partnerships to leverage digital opportunities and develop digital capabilities. A small group (16%) of companies are stalling their transition, while 21% are in the ‘engaging’ phase and are well underway in transforming their organisation.
According to Capgemini Consulting, any organisation has the potential to become a true digital leader, but it will require leadership, investment and persistence. In the report, the firm identifies four dimensions that are crucial to succesfully complete the digital transformation:
- Digital-first mindset: the need to seek and prioritise digital solutions first and foremost;
- Digitised practices: the need to digitise operations and encourage collaborative ways of working and learning;
- Empowered talent: the needs to raise the digital IQ of the organisation by developing key digital skills and increasing employee engagement;
- Data access & collaboration tools: the need to acces data and collaboration tools to drive innovation and to introduce these tools across the organisation.
Didier Bonnet, Senior Vice-President for Digital Transformation at Capgemini Consulting, and one of the co-authors of 'Leading Digital', explains that the road towards full digitalisation might be long, but needed to benefit from digital technologies. “During electrification, productivity surged only after firms that had radically redesigned how they organised – from the physical factory layout to the introduction of the assembly line and greater job specialisation. This was a radical shift that did not happen overnight. It took some 20-30 years to evolve. Our conviction is that something very similar will happen with digital transformation. It will require major surgery to evolve our traditional industrial organisational models into digital ones. But we have no choice if we want to fully benefit from this digital revolution.”
* The research was conducted in collaboration with the MIT Centre for Digital Business.