Executives start to acknowledge the strategic importance of data digitalization even further. Over three-quarters of executives meanwhile thinks that moving to a digitally-driven business model within the coming two years is of significant importance to the competition position of their company. Yet, at the same time these same executives are very worried about the slow progress when it comes to transforming digitally. This can be concluded from “Embracing Digital Technology: A New Strategic Imperative’ by Capgemini Consulting and MIT Sloan Management, performed among 1.500 directors active in 106 countries.
The importance of digitalization and BigData has dominated the headlines for circa two years now. The business case is apparent: with the assistance of new technologies – like social media, mobile, analytics and embedded devices – companies can realize break troughs in their business model and put through improvements in their operational management. A research report form McKinsey back in 2011 already dubbed digitalization as the next ‘economic revolution’ for several sectors*.
While a more recent report from Capgemini Consulting went a step further by quantifying the financial benefits at firm-level. The strategy and management consultancy branch of service provider Capgemini concluded that digital leaders, so-called ‘digirati’, reach up to 9% more turnover and 26% more profit than its competitors.
The research report shows that managers are increasingly becoming aware of this competitive edge digitalization can provide. 78% of respondents say that achieving digital transformation will become critical to their organization within the next two years. Less than 5% believe that digital transformations will never become important.
Adulthood is a long way behind
However, despite the clear financial benefits and heightened awareness, executives have to date been cautious in integrating a far reaching digital agenda into their top strategic priorities. Just 38% of directors state that digital transformation has been a permanent fixture on the agenda of the CEO. As a result, the researchers find that the overlarge majority of firms have a long way to go towards digital maturity. Only 15% of firms can call themselves a digirati, such as for instance Starbucks and Volvo, while more than half (65%) still find themselves in the lowest maturity phase.
When asked for the pace at which their company is pursuing digital transformation, executives sketch a worrying picture. At all levels of the organization, more than half employees believe that the pace of change is (too) slow. The only exception is the CEO, where roughly half feel that the speed of transformation is good enough.
The advice from the consultants is clear: “The possibilities to improve company performances through Digital Transformation are clearly present, only the execution is still difficult. But the only wrong action undertaken in this field, is no action at all” says Didier Bonnet, Senior Vice-President at the consulting firm.
Over ‘Embracing Digital Technology: A New Strategic Imperative’
The investigation is part of a large global research project of Capgemini Consulting in the field of ‘digital transformation’ The most famous examples of this are two research papers published in cooperation with the MIT Center for Digital Business: ‘Digital Transformation: A roadmap for billion-dollar organizations’ (2011) and ‘The Digital Advantage’ (2012)**.