Although supply chain managers recognize the importance of digital transformation, organizations worldwide struggle to balance the necessary key elements.
Consider, for example, that of 1,625 business leaders surveyed for “The Digital Transformation PACT (People, Actions, Collaboration and Technology),” a report from Fujitsu, 84 percent of the respondents said their customers expect them to be more digital, while 71 percent said they believe their company lags behind competitors. Furthermore, 46 percent of the respondents said their business has already implemented digital transformation projects, while 86 percent said the company is planning for the impact of technology on the business beyond the next 12 months.
At the same time, however, one in three (33 percent) respondents said their company cancelled a project in the last two years at a cost of $499,000, while 28 percent of the respondents said their organization has experienced a failed project costing $655,000. Ultimately, 66 percent of the respondents added that they believe their company will lose customers to competitors as a result of digital transformation.
“Technology can be truly transformative, but making the most of digital requires more than the latest tools,” says Duncan Tait, CEO, SEVP and head of Americas and EMEIA at Fujitsu. “While businesses today recognize the need to adopt and adapt to technology, there remain significant issues which are contributing to substantial rates of failure and high associated costs. To realize their digital vision, it’s crucial that businesses have the right skills, processes, partnerships and technology in place.”
When considering their approach to the people involved in digital transformation, most business leaders (90 percent) are taking steps to increase their access to digital expertise, with 70 percent admitting there is a clear lack of digital skills within their organization. Looking to the future, skills will continue to be a key business issue, with 93 percent of the respondents saying upskilling staff will be “vital” to their organization’s success in the next three years.
Interestingly, when it comes to actions, or the processes and behaviors needed to make digital transformation work, 90 percent of the respondents said their organization has a clearly defined digital strategy, while 83 percent are confident that the rest of the business knows what the strategy is. However, three quarters of the respondents said projects are often undertaken that aren’t linked to the overarching business strategy. What’s more, 66 percent of the respondents noted that the cost of failure has put them off future digital transformation efforts.
Next, business leaders are taking positive steps in collaboration, with most businesses undertaking or planning to undertake co-creation projects (cited by 63 percent of the respondents), with partners including technology experts (64 percent) and existing customers (42 percent). It’s worth noting, however, that 73 percent of the respondents also said that a lack of success within a quick timeframe would quickly put an end to their strategic partnerships.
Finally, business leaders are planning to implement a wide range of technology in the next 12 months: over half are planning to introduce cyber security solutions or the Internet of Things, with cloud computing (cited by 47 percent) and artificial intelligence (cited by 46 percent) following close behind. Survey respondents are aware of the disruptive impact of technological change, as 86 percent say the ability to change will be crucial to their company’s survival in the next five years. Notwithstanding, 71 percent are concerned about their organization’s capacity to adapt to technologies like artificial intelligence.
“The introduction of new technology into a business has always called for balance. However, as the pace of technological change continues to build, balance has never been more important,” Tait says. “Only by bringing equilibrium to people, actions, collaboration and technology - can organizations thrive in this digital era.”
What are your thoughts on digital transformation? Does your company have the correct people, processes, collaborative plans and technology in place?