WHAT BLOCKS COMPANIES
FROM GOING DIGITAL?
According to research from International Data Corporation (IDC), companies spending related to technologies and services for digitalization is bound to grow of a staggering 16.7% by 2022 in comparison with 2017 expenditures, for a comprehensive global value of 1.97 USD.
Digital transformation is key across different industries, and its mantra is being adopted even by those sectors that traditionally lag in this field, such as construction for example.
If digitalization has become so vital for companies, no matter their dimensions or area of business, what are the factors that hinder its adoption?
1. Management & Corporate Culture
Many companies believe that technology is what matters most in digitalization, but it is not always true: technologies must be weighed against the value that they can bring to businesses and customers, together with the potential they may unlock if pared with other, similar technologies.
Data and analytics are just the tip of the iceberg, as analysing such data and figuring out ways to make more money is crucial for the sustainability of a digital business. IoT and connected devices are the biggest component of digital transformation and are becoming the new hardware backbone to an organisation, much like service and storage were in the 1990s (Nicholas D. Evans).
What’s important here is stop believing that fancy devices alone can solve the puzzle. Going digital is a process that differs from company to company, and it needs strategical thinking as any other process in the business model.
2. Technology Adoption
According to Yang Guoan, Senior Management Consultant at Tencent, one of the “big four” (BATB) in the Chinese digital ecosystem, digital transformation is first of all a transformation of “people”. Management must act as the architect of the whole process, and to do so it must have a clear view of what needs to be done and enough willpower to take all the actions required.
The same view is also shared by Giulio Finzi, Senior Partner at Netcomm, as the values of digitalization must be endorsed by C-level employees to gain enough traction to transform corporate culture from the higher roles and downwards.
However, despite the majority of leaders advocating digital change, only 11% are actually delivering digital businesses, with more than half of the organizations surveyed in a research by The Economist (about 57%) that have not even found a starting point for digital business transformation.
3. Digital Customer Experience
According to Altimeter, companies are not investing enough resources in customer research, thus hampering the overall digitalization process.
Prioritizing tech over customer experience will result in a lack of value for the consumers, as being able to segment the market is a skill that is mandatory to move a business online.
For example, spending resources in building buyer personas of mobile consumers is crucial to understand their purchasing journey, guiding you and your team among the technologies most useful to direct sales and marketing towards this specific consumer segment.
Luckily, technology is getting cheaper, and with it the cost of entry into digital transformation. Of the companies surveyed by IDC, revenues of those that managed to digitalize successfully increased by about 4.5%, compared with losses at companies lagging in digital investment.