Digital transformation has long been a point of discussion for organisations but, for many, it has often remained just that: a discussion. Organisations have been slow to prioritise and harness the power of technology to gain a competitive advantage. In 2017, a McKinsey survey showed almost 50% of executives viewed cost saving as one of technology’s biggest roles, whereas just 10% of executives ranked technology in the same way in December 2020. Instead, more than half of board members now prioritise competitive advantage as a driving force behind technology.
This shows the drastic change in roles technology has undergone throughout the pandemic. No longer is technology merely used for cost-saving purposes. Instead, it has progressed through the ranks to become the driver of innovation and competitive edge. Where organisations would have been reluctant to integrate various types of technologies into the business operation, those same technologies have swiftly become a minimum requirement, and the implementation of more advanced technologies has taken centre-stage.
Why hasn’t digital transformation happened sooner?
With the incredible advances in technology over the past decade alone, it is a wonder why businesses have been slow to digitalise their operation and adopt more sophisticated technologies.
No urgency
A reason for the sluggish development of technology within organisations was the lack of urgency or necessity. Organisations could comfortably survive and grow while digital transformation took a backseat, with a minority of companies making it a priority.
Since the arrival of Covid and the ensuing work from home orders, companies were forced to innovate, and at short notice. Not only was it a matter of practicality, but of survival too. Without evolving digitally, many companies would have ceased to exist.
Lack of management buy-in
Another major obstacle to digital transformation was the apparent lack of management buy-in, without which organisations did not have the force to drive digital innovation. In 2018, data showed just 36% of organisations felt they had the right leadership capability to drive digital transformation. However in 2020, this figure increased to 62% which indicates a significant mindset shift among the leadership team. With a firmer leadership capability, organisations have been able to adopt digital innovation at a much quicker pace.
Digital growth accelerates at unprecedented speed
Since the start of the pandemic, research by Harvey Nash shows 75% of companies have increased their technology spending, with a median additional spend of 5%. How companies are using that additional budget remains varied, ranging from insights to product enhancement to customer experience to remote working capabilities. However, the same data from 2020 shows the top 3 most important technology investments were for security and privacy, customer experience and engagement, and infrastructure/cloud. As a result, the survey shows 55% of customer interactions in Europe are now digital, as opposed to just 32% in December 2019.
It is not surprising that security and privacy ranked the top priority for 2020, due to the speed at which organisations had to protect customer data as a result of remote working and operational digitalisation. However, one and a half years later, businesses have recovered from the shock and have implemented the relevant systems and procedures to accommodate the new way of working. It is likely they are now prioritising other areas of digital transformation with less of a focus on survival, and more of a focus on growth and innovation.
What businesses can expect from leveraging the power of tech
Undoubtedly, businesses are reaping more rewards through this new-found use of technology. From customer experience to talent retention to business operations, technology has the ability to positively impact every aspect of any business.
Improved sales and customer satisfaction
When done correctly, digital transformation will undoubtedly enhance customer experience. The customer demand for tech-fluent businesses is increasing with research showing 80% of consumers are saying that digital benefits, such as an easy to use website and digital loyalty programs, influence their choice of where to shop. Furthermore, more than half of consumers say they would prefer to shop exclusively online.
Tech has a strong influence over the customer journey, whether businesses provide a tangible product or offer a service, and whether they are B2B or B2C. The global mindset towards tech is changing fast and there is the opportunity for every type of business to enhance its customer experience through digital innovation.
Better talent attraction and retention
Tech can be used not only to enhance the customer journey, but the employee experience too. From finding better hires to training employees, tech can be harnessed to improve an employee’s full lifecycle in the business.
Furthermore, it could be argued that businesses who can provide a seamless remote working experience will attract and retain talent with more ease. According to a recent study, 67% of respondents thought companies that do not offer remote working will struggle to attract talent, and 68% said they would rather work remotely than in an office. Not only is there a growing demand for digital innovation among consumers, but among the workforce too.
Enhanced business performance
Having a seamless business operation is essential to growth and stability, and tech is now a vital tool to achieving a well-oiled machine. With a robust digital strategy in place, businesses can save time by automating repetitive tasks, securely store and access customer data through cloud-based platforms, achieve better inter-departmental communication and collaboration, gain better business insights through detailed reporting, and ultimately identify financial inefficiencies.
Companies should carry out a full analysis of their business operation and identify the areas which are not yet digitalised, and those areas which are inefficiently digitalised.
Digital transformation in the Boardroom
Needless to say, this digital transformation also affects the Boardroom. Without a tech-savvy team of Executives, digital innovation would not be possible. Boards need Executives who are not only in favour of a tech revolution, but those who are experienced with it too. However, just 49% of UK Directors said they felt confident with how their boards dealt with the pandemic. Meanwhile, the same survey revealed 94% of board members said they felt they needed more training on new technology.
This data reveals a gap in the digital transformation process for many businesses and a need for Directors to review their Board members in respect of the market changes.
Threats, risks and dangers
As with any significant changes to business strategy, a new catalogue of potential risks is presented. The danger with pandemic-induced digital transformation is the speed at which businesses have had to adapt beyond their comfort zones and areas of expertise. This welcomes cyber attacks, data leaks and breaches, as well as operational mishaps. As a result, organisations must seek out and invest in the help of experts, and also consider creating new internal roles to facilitate and manage the changes. As such, roles in Cyber Security and Change Management are of paramount importance during these times.
A new wave of opportunity
This era of digital transformation has truly brought about a whole new growth potential for those willing to seize the opportunity. There is no stopping the rise of tech, there is only learning how to harness it. Those businesses who make it a priority to experiment will thrive, albeit with challenges along the way. Those who are slow or reluctant to rise to this new age of tech will soon be outshone by their progressive competitors. Although there lie many uncertainties with today’s volatile market coupled with the explosion of innovations, it is clear that businesses must assemble the right team of Board members, well versed in technology, to ensure the business matches the pace of tech.
If you would like to discuss how we can help source the right talent to your business, or for more information about the market, please get in touch for a confidential discussion.