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Business leaders reveal major lag in digital transformation

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Despite the relentless pace of disruption, the latest Dell Technologies Digital Transformation (DT) Index shows many businesses’ digital transformation programs are still in their infancy. This is evidenced by the 78% of business leaders who admit digital transformation should be more widespread throughout their organisation (UK: 71%).

More than half of businesses (51%) believe they’ll struggle to meet changing customer demands within five years (UK: 22%), and almost one in three (30%) still worry their organisation will be left behind (UK: 19%).

Dell Technologies, in collaboration with Intel and Vanson Bourne, surveyed 4,600 business leaders (director to C-suite) from mid- to large-sized companies across the globe to score their organisations’ transformation efforts.

The study revealed that emerging markets are the most digitally mature, with India, Brazil and Thailand topping the global ranking. In contrast, developed markets are slipping behind: Japan, Denmark and France received the lowest digital maturity scores. The UK came in 19th place, in front of Germany (24th) but behind Russia (17th) and Spain (14th). What’s more, emerging markets are more confident in their ability to “disrupt rather than be disrupted” (53%), compared to just 40% in developed nations. 

Behind the curve

The DT Index II builds on the first ever DT Index launched in 2016. The two-year comparison highlights that progress has been slow, with organisations struggling to keep up with the blistering pace of change. While the % age of Digital Adopters has increased, there’s been no progress at the top. Almost four in 10 (39%) businesses are still spread across the two least digitally mature groups on the benchmark (Digital laggards and digital followers).

“In the near future, every organisation will need to be a digital organisation, but our research indicates that the majority still have a long way to go,” says Michael Dell, chairman and CEO of Dell Technologies. “Organisations need to modernise their technology to participate in the unprecedented opportunity of digital transformation. The time to act is now.”

Benchmark groups Description Today global 2016 global Today UK 2016

UK

Digital Leaders Digital transformation is ingrained in their DNA 5% 5% 5% 4%
Digital Adopters Have a mature digital plan, investments and innovations in place 23% 14% 22% 12%
Digital Evaluators Gradually embracing digital transformation; planning and investing for the future 33% 34% 37% 24%
Digital Followers Make very few digital investments; tentatively starting to make plans 30% 32% 33% 41%
Digital Laggards Do not have a digital plan; limited initiatives and investments in place 9% 15% 3% 19%

 

Barriers to transformation and confidence

The findings also suggest business leaders are on the verge of a confidence crisis, with 91% held back by persistent barriers.

Globally, the top five barriers to digital transformation success:

  1. Data privacy and security concerns (up from 5th place in 2016)
  2. Lack of budget and resources (1st place in the UK with 41% citing as the top barrier)
  3. Lack of the right in-house skill sets and expertise
  4. Regulation and legislative changes (from 9th place in 2016)
  5. Immature digital culture

Despite almost half of all surveyed organisations (49%) believing they will struggle to prove they are trustworthy within the next five years. This figure drops significantly to 16% in the UK. Meanwhile, nearly a third (32%) don’t trust their own organisation to comply with regulations such as the EU General Data Protection Regulation (UK: 31%) and one in three (33%) don’t trust their own organisation to protect customer data (UK: 26%).

Plans to realise their digital future

Leaders around the world have reported common priorities and investments to aid future transformation, including an increased focus on workforce, security and IT. 46% are developing in-house digital skills and talent, by teaching all employees how to code for instance, up from 27% in 2016. For the UK this has increased from 27% in 2016 to 49% in 2018.

The top technology investments around the world for the next one to three years will be in:

  1. Cybersecurity
  2. Internet of Things technology
  3. Multi-cloud environment
  4. Artificial intelligence
  5. Compute centric approach

How organisations fare in the future will depend on the steps they take today. For instance, Draper, a Dell Technologies customer, was traditionally focused on department of defence research but it’s starting to move into more commercial areas such as biomedical science.

Mike Crones, CIO of Draper said, “Technology enables us to keep solving the world’s toughest problems; from the infrastructure and services that underpin our innovation, to the experimental technologies that we wield to prevent disease for instance.

“We couldn’t push boundaries, and call ourselves an engineering and research firm, without being a fully transformed and modern company from the inside out.”




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