It is believed that impact of digital services on businesses is being realized by a growing number of international companies. Yet an overwhelming majority of businesses is not ready to implement digital transformation strategies. That was a conclusion made by Riverbed Technology which conducted a global survey of the challenges faced by companies advancing towards digitalization.
91% of respondents agreed that digital experience has a critical impact on competitiveness of a business. Even more respondents (98%) are certain that companies can really succeed only through introducing digital technologies. Nevertheless, 95% of respondents stated there are significant obstacles for businesses going digital.
In its survey, Riverbed Technology polled representatives of a thousand companies operating in transportation, manufacturing, retail, healthcare and finance industries. The company collected opinions of representatives of nine nations, namely, USA, UK, Brazil, Germany, Australia, France, China, Singapore, and India.
Regretfully, most leading international companies confront serious difficulties in going digital.
“The reality for the majority of organizations is that the current state of their digital services is not living up to expectations, nor providing what is required to thrive in a highly competitive and modern digital marketplace”, Riverbed Technology notes.
The key problems which limit the digitalization strategies implementation are quire earthly. Thus, 51% of companies have budget constraints, 39% face such an obstacle as less skilled personnel, whereas 37% named top executives’ lack of interest towards digital initiatives. The causes also included complex and rigid legacy infrastructure (45%) and lack of visibility across digital or end user experience (40%).
The digital breaks substantially differ depending on a region where a business operates. Budget problems are typical for companies in the US, UK, and Australia. Complaints about an obsolete IT infrastructure were registered in the US, UK, and France.
Nevertheless, the situation is not an obstacle for admitting that digital technologies have prime importance for most diverse industries and for shaping customer experience, increasing revenues, and even for accelerating presentation of new products to the markets. True, digitalization advantages are seen differently in different countries. Representatives of Germany and the UK first of all noted improved customer experiences as a result of optimizing digital performances (61%), whereas in Singapore increased profitability is expected (50%), while in Brazil increased employee productivity (56%) and brands strengthening (53%) are anticipated. Employees surveyed in the US link digitalization to a greater market agility of their companies (55%).
Unpreparedness for digitalization is partially due to the hardships companies face when operating the already existing infrastructure. Malfunctions are commonplace. 80% of the survey respondents note that important digital services and applications are failing a few times a month or more. The highest instance of team impact as a result of poor performance more than once a month was reported by companies operating in China (92%), USA and Germany (86%), as well as in France (82%), UK (81%) and Singapore (79%).
Poor performance of critical digital services impacts team work in companies of media (60%), finance (54%) and healthcare (53%) industries as they have to deal with technical failures once a week or more. Technical deficiencies are certainly being taken care of. 67% of respondents believe failures in critically important infrastructure should be resolved within an hour, while 18% think it should take several minutes. It’s most important for businesses that problems in IT services operation are rectified within a day.
It apparently happened that the most demanding companies are in China and France where 86% and 84% of respondents, respectively, are certain problems in IT infrastructure performance are to be sorted out within an hour. Malfunctions are less uneasily perceived in Germany and Singapore where repair of technical problems within an hour is expected by 76% and 72% of respondents, respectively. In Brazil, India, and Australia such expectations are typical for 60% of respondents only.
If companies do not launch digital technologies implementation, their market position will be impaired, Riverbed Technology’s respondents realize. That includes loss of sales and revenues (42% of respondents envisage such risks), delayed new products launches, loss of customers and brand loyalty (mentioned by 41% of respondents), as well as loss of employee productivity (feared by 40% of the survey participants).
Invest today and lead tomorrow, that must be corporate development strategy in line with required digital transformations. Most of the survey participants agree with that as 77% say it’s critical their company invests in improving the digital experience for users and customers in the next 12 months. Investments are first of all required in modernizing network infrastructure (60% of respondents think so), monitoring and measurement of the digital experience of end users (59% of respondents are certain about that), as well as in improving service desk capabilities and accelerating applications development (59% and 58% of respondents, respectively).
What digital transformation technologies are to be primarily implemented by organizations? The survey respondents believe attention should be paid to Data Analytics (60%), Internet of Things (59%), Blockchain (48%), Artificial Intelligence (47%), Virtual Reality (36%), and 5G networks (21%).
The researchers note, that over the next two years, organizations that are first to move will begin to see digital bets to pay off. According to a recent McKinsey study, early adopters of digital business capabilities had a three-year CAGR of more than twice that of companies who played it safe. According to IDC, within the next three years, more than 50% of global GDP will come from digital services, while global capital expenditure for investments in digital services is expected to reach US $2.1 trillion. It’s possible the world is moving into a new game where those who innovate early will gain a substantial lead, and those who wait may never catch up.
“It’s not a question of if companies will embrace digital, it’s a question of when, how, and how fast”, Riverbed Technology believes.
By Olga Blinova