74% of European organisations are digital transformation laggards

25 November 2019 Consultancy.eu 4 min. read

Seven out of ten European organisations are struggling with realising their digital maturity ambitions, according to a new study by IDC. As it stands, less than three out of ten have managed to significantly digitise their business models, processes, products and services. 

The research polled 375 leaders in Europe across multiple industries to gain insight in their digital transformation maturity and the growth obstacles they face. Laying the scene for how important digitisation is to overall business strategy and innovation, 65% of the surveyed C-Suite leaders said that they are under considerable pressure to deliver a successful digital transformation strategy. 

Most of the leaders however buckle under that pressure, because just a very small percentage in fact succeed in embracing digital in a (partly) complete manner. These ‘leaders’ in the field manage to apply modern digital technologies to improve and help deliver major value across the business, from sales & marketing and operations to IT and finance.

To what extent has your organization embraced digitization of business processes, products, and services?One aspect which differentiates the leaders from the laggards is the extent to which they harness the power of their data. The research found that 67% of ‘digital leaders’ are able to analyse data and leverage insights to react quickly and accurately enough to cope with the dynamic market conditions, compared to only 4% of ‘digital laggards’. Similarly, leaders have the capacity to use digital to accelerate time-to-market and time-to-value, vastly over performing laggards in this regard.

Using data-driven insights to improve predictions is another differentiator. “The ability to predict business conditions effectively creates a huge advantage, but it builds on a solid technology foundation and integrated data,” said Ian Tickle, a Senior Vice President at Domo, a software company that commissioned the IDC study.

In manufacturing environments, digital leaders manage to better streamline production and enjoy increased tracking and tracing of materials and products, providing higher levels of productivity. Meanwhile, in sales & marketing, leaders perform better on a range of activities, including customer targeting and segmentation, campaign management, pricing and promotion orchestration. 

To what extent has your organization embraced digitization of business processes, products, and services? - Digital leaders vs LaggardsAsked what hinders leaders in advancing their digital maturity, the primary barrier noted is data fragmentation. Siloed data results in a lack of visibility across business processes, and in turn leads to a poor decision-making culture. Tickle stated; “It’s no longer about driving digital transformation in vertical stacks, but rather horizontally across the entire enterprise. However, data stuck in silos across the business hinders new and efficient ways of working, and ultimately stalls digital transformation.” 

Other barriers to growth in digital maturity include organisational complexity (45%), the lack of visibility across business processes (28%), an absence or insufficient leadership commitment and a lack of skills for execution. The latter echoes the results of a study released last year by Capgemini Invent, which found that on average, European companies lack leadership capabilities for digital transformation projects.

Looking ahead, the importance for laggards to advance their digital maturity is only set to increase, highlight the authors. Amid a disruptive environment and the rapid rate with which emerging technologies are unfolding in the marketplace, organisations that fail to adopt digital in an integrated fashion – including in their culture – risk falling behind. By 2029, 75% of European organisations will be completely digitally transformed, operating as what IDC defines as a ‘digital native enterprise’.