There is no doubt that the digital transformation has gained momentum in Germany, Austria and Switzerland. In the meantime, 71 percent of companies in the DACH region have developed a digital agenda. In the previous year, this was only the case for about half of the companies.
Comprehensive market analysis by DXC Technology shows where the “digital journey” for companies is heading. One key result is that the majority of companies are focusing on digitization – and are recording measurable successes.
Out of the 800 managers surveyed, 86 percent admit that digital change has massively changed their industry. Conversely, this means that 15 percent are aware of the effects of digitization, but do not yet have a digital agenda. However, more than 80 percent of the companies surveyed want to have such a “digital timetable” by the end of 2019.
Startups: Partners instead of competitors
The companies in Germany, Austria and Switzerland are not afraid of the alerted, digital startup companies outstripping them. Rather, more than three-quarters of the established companies see potential partners in the newcomers, e.g. for the management of programming interfaces (APIs), via which companies can dock apps from partners and customers to their IT environment.
True to the motto “Learning from the big ones”, 70 percent of those surveyed also assume that they can benefit from the digital know-how of giants such as Amazon, Google or Microsoft in the field of digitization. Such companies, on the other hand, are considered less dangerous. The situation is different for traditional competitors who are successfully active in the same industry with digitization projects. Approximately half of the participants in the DXC Technology study consider it a threat to their own business model.
How digitization pays off
An encouraging signal for all businesses is that digitization is delivering tangible results. A total of 56 percent of the companies that have a digital agenda can demonstrate initial success. This applies in particular to those areas that have a particularly high priority for them – such as customer satisfaction, sales increases or quality improvements. For example, 84 percent of companies rate the success of their digitization strategy in terms of customer satisfaction as good to very good. Almost as many come to the same result in terms of sales increases (81 percent) and higher quality (79 percent).
There is, however, “air to the top”, because 36 percent of companies with a digital agenda and successes in digitization see it as “mandatory” to achieve measurable successes in customer satisfaction with the help of a digital strategy in the future. But only 27 percent rate the successes already achieved as “very good”. A similar ratio can be seen in the sales increases: Around 26 of the companies rated the success achieved as “very good”, but 44 percent consider higher revenues from digitization to be indispensable.
Finding the right organizational form
One of the factors that causes managers headaches in digitization is the organizational form. Because there is no kind of “blueprint” for all companies and industries. According to the study by DXC Technology, three forms of organization are currently emerging that companies are using to tackle digitization:
- A “chief digitizer” in the form of a Chief Digital Officer (25 percent),
- Digital project teams (24 percent),
- Independent, agile digital teams (20 percent)
It is therefore important for companies to find the best way for them, if necessary with the help of external consultants. However, the study has revealed a trend: 28 percent of companies with a digital agenda and measurable success rely on agile project teams located outside the corporate structure. Thus, this approach tends to be more promising than others. However, there is no “organizational silver bullet” to digital success. Much more important is that companies move in the direction of digitization and bring their employees on board.
Human factor: Brakemen and innovators
The human factor, in particular, is a headache for many companies. More than 60 percent of managers notice a lack of willingness among their employees to change existing procedures. In addition, departments behave like silos. Almost two-thirds of professional and managerial staff criticize the fact that communication across departmental boundaries in the context of digitization projects is inadequate.
If you want to digitize successfully, you have to convince your employees. In many companies, employees do not want to change existing processes.
There are several ways to remedy this situation. On the one hand, “Leadership Communication”: Management and department heads must clearly communicate why digitization is important for the company and how it is implemented. On the other hand, it is important to impart the necessary know-how to employees, for example through further training measures.
Which technologies do “digitizers” use?
Another result of the study also aims in the direction of “people”: companies classify new digital working environments as the most important technology in the implementation of digitization projects. They are characterized by collaboration platforms, mobile end devices and IT environments that allow work to be carried out at any time and from any location, e.g. with the help of cloud services. A modern Digital Workplace not only increases the effectiveness of employees but also their motivation. Further technologies will gain in importance in the future. These include Artificial Intelligence (AI) and Machine Learning (ML). It is striking that, according to the study by DXC Technology, industries with a digital agenda and measurable successes in the area of digitization rate digital work environments and AI as more important than industries that do not use an agenda.
The topic of service management also has a higher priority among the pioneers in terms of digitization. The background is that this technology plays an important role in improving quality and customer interaction. These are the areas where companies with a digital agenda are already achieving measurable success today. All in all, digitalization is an individual journey on which companies learn a lot – and therefore focus on goals, procedures/organization and technologies are shifting.
Conclusion: Digitalization has “arrived” at companies in Germany, Austria and Switzerland – and it is proving to have a positive effect. Anyone who has so far avoided this topic should therefore immediately start to set up and implement a digital agenda. It is important to start quickly and to accept that one or the other digitization project may fail at an early stage. Such learning effects are part of a “digital journey”.
This article was published on CIO’s website