Competing in 2020: Winners and Losers in the Digital Economy
The first post in our new blog series on Accelerating Digital argued that the urgency of digital transformation is now widely accepted by most senior executives. Few remain to be convinced about the disruptive impact of emerging technologies.
With the focus shifting from the WHY to the HOW of transformation, Post 3 hinted at a growing ‘digital gap’ between where many organisations are on the transformation journey and where they should be. Overcoming the obstacles and barriers preventing organisations from leveraging the full potential of digital technology has now become the main focus (see Accelerating Transformation (Part 3): Your Digital Audit).
Competing in 2020
New research conducted by Harvard Business School, with sponsorship from Microsoft, provides additional evidence supporting the two key points above.
Based on a large-scale survey of 783 executives across a broad range of sectors, countries and size of organisation, the research examined the pace of innovation and how prepared business leaders are for rapid digital change.
The report concluded that the majority of business leaders know their industries are ripe for transformation. In most cases, they are eager to bring the benefits of technology to their businesses. However, a major digital gap still exists with the majority of respondents being unprepared for rapid digital change.
Key headline findings are as follows:
- Digital disruption is a wave sweeping over industries, with most being on the crest of that wave or soon will be. Eighty percent of respondents believed that their industry will be disrupted by digital trends; with 84% of these stating that their industry has either passed the inflection point of disruption or will pass it by 2020. Most see this as an opportunity rather than a threat.
- While digital transformation is real and widespread, not all organisations are ready for it. Fewer than half of those surveyed stated that their organisation had a fully formed digital strategy, a major cause for concern given the imminent threat of disruption most organisations face. Nearly half of respondents stated that their organisation’s traditional business model would be obsolete by 2020. Progress towards developing new models and strategies is still evolving.
- Respondents identified three main priorities for digital transformation – using digital to create exceptional, highly relevant customer experiences; enhancing operations for greater intelligence and speed; transforming existing products and business models to be more information-based (rather than replacing them with something new altogether). The majority plan to transform things they are already doing rather than doing something radically different.
- A wide range of barriers to digital transformation were identified including restructuring how the business is organised and managed; time and resource pressures; organisational silos; and managerial/employee resistance to change.
- Digital leadership is critical to overcoming these barriers.
- The report concludes that there will be winners and losers in the digital economy. Companies that form their digital strategies now, shift resources to new digital initiatives and redesign organisation and culture will have a distinct advantage.
At Bridgeall, we work closely with a wide range of organisations (public and private) to accelerate digital transformation through excellence in software development and project delivery.
In future blog posts, we will discuss the way in which our services, products, technologies and overall approach can help business leaders make a digital difference.
As one respondent in the Harvard/Microsoft report stated – “we need to transform the engine of the company”. To enable this transformation, technology AND organisation are key.
There is a mutually dependent relationship between the organisation and its use of digital technologies. Digital technology creates new opportunities for working differently; working differently creates new opportunities for leveraging the full potential of emerging technologies.
The failure to recognise this mutual dependency is one of the main reasons why so many organisations struggle to derive maximum value from technology.
Leading digital organisations successfully integrate strategy, people, processes, systems, organisation, culture AND technology. At Bridgeall, we facilitate this transformation by building bridges between IT and the business; between software implementation and tangible outcomes.
The full Harvard/Microsoft report can be downloaded here – Competing in 2020: Winners and Losers in the Digital Economy.
You can contact Bridgeall here – Contact Us.