Most senior executives are confident about the success of the digital transformation efforts despite more than 60 per cent saying they still need to make significant organisational changes to reach their goals.
The figures are contained in a study, by the Economist Intelligence Unit (EIU) on behalf of Pegasystems.
Furthermore three quarters of respondents said digital transformation is their company’s top strategic priority in 2016, and poor financial performance looms as the top consequence for not meeting this goal.
Agenda setting
According to the report’s authors, “This strategic significance reflects the pace of change that executives are witnessing in their industries. Over six in ten (62 per cent) executives surveyed report that the pace of change related to digital transformation is “accelerating significantly” in their industry.”
Pretty much everyone (96 per cent) agreed that change is accelerating and the impact of the acceleration was felt more in big companies than small who would naturally have a harder time adjusting.
“Just under three-quarters (74 per cent) of respondents from companies with over US$5 billion in annual revenue say the acceleration of change in their industry is significant, compared with 50 per cent of those in other firms. This accelerating change is not necessarily negative, however,” says the study.
Change presents opportunities, and executives see digital disruption as a chance to improve their competitive position, say the authors.
“When asked to identify the factors that will have the greatest influence on their digital transformation priorities in 2016, just under half of those surveyed say “areas where we can seize competitive advantage”.
Once again this was a more significant problem for larger organisations (55 per cent) than for smaller companies (41 per cent).
Interestingly, only 25 per cent overall identified “…areas where we face strong competitive pressure” as a major influence on their digital transformation priorities.
The authors say this suggests business leaders see digitally driven change as more of an opportunity than a threat.
The results are is based on a global survey of 282 executives from key industries such as healthcare, financial services, biotech, pharmaceutical, and telecommunications.
According to the study, 69 per cent of executives expect to achieve their digital goals set for this year.
The authors say one reason for the optimism is the way executives are approaching digital transformation. “The prospect of gaining a competitive advantage is the largest driving influence on how organisations set their digital transformation priorities, with 48 percent of business leaders citing it as a top factor. In contrast, only 25 percent identify competitive pressure as a lead driver for pursuing digital transformation.”
But the report also reveals most organisations expect a rocky transition.
“Respondents identified a lack of executive sponsorship as a critical impediment to reaching their goals. Forty percent of respondents said senior leaders need to increase their oversight of digital transformation initiatives, meaning change needs to be actively driven from the top.”
Customer service is a primary transformation objective for many, with 57 percent of respondents identifying it as their top customer-facing goal. “From an internal perspective, process optimization ranks as the most common goal, cited by 38 percent of respondents. This far outweighs focus on employee experience, with just 14 percent of business leaders focusing on improved employee engagement among their core digital transformation objectives.”
The study also found more organisations plan to invest heavily in big data and analytics technologies (58 percent) this year than in any other digital technology, such as mobile computing (36 percent) and software as a service (29 percent). The planned investment in big data and analytics is consistent across industries.
According to Don Schuerman, CTO and vice president of product marketing, Pegasystems. “The future of many companies now depends on their ability to translate digital potential into a competitive advantage. This is an all-encompassing effort that requires top executives to champion the deployment of flexible, digital technologies that change the way they engage with their customers.”
This article originally appeared on B&T’s sister business site www.which-50.com
