Missing: digital visions
There is a lot of talk about digitalization and its impacts, but what is the situation actually like at German companies? The UDG Digital Readiness Study looked into this for the first time as part of a survey of managers and experts across all disciplines and departments.
The majority acknowledged the importance of digital transformation against a changing backdrop, but only a third of them have a clear digital vision.
Companies anticipate significant changes in customer expectations, but have not fully grasped what they will be.
Companies are failing to include employees in the transformation, which is another reason why there is a snag in implementing digital strategies.
Digitalization is going to transform entire industries, something which companies have come to realize. Of those surveyed, 73% expect to see a fundamental change in their line of business. However, significantly fewer respondents − just 41% − believe that the transformation will affect their current business model.
The belief among slightly less than half of those who participated in the survey that they will not be personally affected by the coming developments perhaps explains why there is a lack of policies and guiding principles among companies on how to deal with digital transformation. Only 37% of companies have a clear digital vision, and 37% have also used this vision as a basis for developing a strategy. Just 25% have identified critical areas for taking action and what those steps will be.
The study also found that not all stakeholders are being integrated into the strategy process. At 33%, only every third respondent could confirm that all of the business units relevant to the transformation’s success have been brought on board concerning these efforts. Leaving entire departments out in the cold like this also impacts the extent to which employees feel like they are being included in the change. Only 13% of respondents believe that employees feel like they are being included as part of the digital journey, and just 12% think that all employees understand the digital vision.
Change management is not the only area where companies have ground to make up; the level of knowledge about their own customers leaves something to be desired as well. Even though 65% of respondents believe that customer expectations are changing drastically, only 18% of them have fully grasped what these new needs are and can glean some insight from them. In many cases, companies lack the means for implementation: 32% of those surveyed indicated that they lack adequate financial and human resources for the digital transformation.
Nonetheless, many companies have already set out on a path towards digitalization: 58% have launched pilot initiatives, 26% noted that they have kicked off an extensive digital transformation or even carried one out, while just 14% are still at the very beginning of the process.
The outlook is promising! Even though just 23% have tangible results to show for their efforts and only 20% are within the timetable that they set, 45% of the managers and experts are optimistic that they will be able to successfully transform their companies using the respective setups that they have chosen. What’s more, 53% even believe that digitalization will above all create opportunities for their companies.
About the methodology: In total, 106 managers and experts from large and medium-sized companies participated in the online survey conducted in June/July 2017.