Digital Transformation Index II

Article Synopsis :

Almost half of the business leaders believed their organisation would be obsolete within three to five years, according to research by Dell Technologies undertook two years ago.

Emerging economies are stealing a march in the digitalisation stakes

Dell’s Digital Transformation Index II updates this research and shows that this message has not been heeded. Despite the irresistible move towards a digital world, few businesses have made very great developments on their transformation.

The study identifies five groups – leaders, adopters, evaluators, followers and laggards. The majority of businesses are behind the curve. Though only 9% overall are considered laggards, 30% are followers and 33% occupy the middle ground as evaluators. Almost a quarter (23%) are adopters, while only 5% are leaders.

Four out of five of the business leaders surveyed (78%) believe transformation should be more widespread in their organisation and more than half (51%) believe they will struggle to meet the changing demands of their customers within five years. A third fear being left behind.

Things have improved since 2016, with the biggest swings in the laggard (down 6%) and adopter (up 9%) groups. However, it is emerging markets are leading the charge. Arguably, they have the least legacy to deal with, but they are also grasping the nettle and effecting change.

India leads in terms of digital maturity, ahead of Brazil and Thailand. More organisations in emerging markets believe they will disrupt rather than be disrupted in the next five years – 53% compared to 40% in developed markets. They also outnumber their developed market counterparts in the adopter and leader cohorts by 35% and 50% respectively.

Almost all (91%) businesses face obstacles in implementing their transformation programme and these cover the usual suspects of technology, people and policies. The top 10 are:

1. data privacy/security
2. budget/resource
3. lack of skills In-house
4. changes to regulations and legislation
5. underdeveloped digital culture
6. finding technology to work at the speed of the business
7. information overload
8. lack of management buy in
9. no coherent digital strategy/vision
10. weak digital governance/structure

Since 2016, data privacy, regulation and information overload have all risen up the ranking to become much greater barriers to transformation. In fact, a third of respondents don’t trust their organisation to comply with regulations like GDPR or to safeguard either employee or customer data and a half (49%) believe they will find it hard to prove they can be trusted with data within five years. Almost half (43%) doubt whether they can be transparent about business decisions.

Despite this pessimism, business leaders believe that a transformation programme will deliver improved productivity, profitability, revenue growth, customer retention and a return on investment. As a result, 46% are focused on developing in house expertise by training coders while ensuring IT leaders have business skills and vice versa.

More than three quarters (77%) believe that within five years they will have harnessed emerging technologies to make use of big data, while 68% will use it to improve efficiencies. Almost half (47%) believe they will be transacting via blockchain within the same period.

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