The pandemic may have sparked a great leap forward in digital adoption, but major UK companies are in denial about their level of digital maturity, according to groundbreaking new research.
The study of 200 senior decision-makers conducted by Vanson Bourne on behalf of digital product consultancy Elsewhen looked at digital progression within companies across FMCG, retail and financial services among others. The majority (86%) work at corporations generating more than £1bn p/a, and more than a third (37%) are working with yearly IT budgets that exceed £10 million.
Nearly half (46%) report that their organisation’s digital strategy is fully defined, implemented and optimised across the business, while more than half (57%) are “extremely proud” of their organisation’s approach to digital projects.
Yet, this level of optimism may be misplaced as the survey uncovered revealing contradictions: While 55% of respondents in the survey describe their senior leaders as “extremely digitally literate”, 60% say that these leaders “don’t understand how to use emerging tech” (such as AI/machine learning) to benefit their business. Similarly, while 65% of companies claim to have a fully implemented digital strategy in place, one fifth of these (21%) don’t have a digital vision or a digital operating model. This suggests that a significant proportion of companies may have a digital strategy which does not include all the elements it ideally should.
Meanwhile nearly two-thirds (64%) of those surveyed agree that there are “big gaps between strategy and what can actually be achieved.”
This problem is particularly acute within IT departments, (89% of IT decision-makers surveyed work in companies with an annual IT budget of £1m+.) IT decision-makers questioned in the study cite a lack of commitment from the organisation to the required changes (38%) and a lack of leadership experience in product (34%) as the top challenges they encounter.
In financial services, a whopping 44% of those surveyed have come up against “lack of commitment from the organisation to the required changes.” Similarly, in retail, teams are struggling, too, amid a “lack of leadership with technology experience” (38%), while those working in FMCG point the finger at “no clear ownership” of digital projects (30%).
In more positive findings, the results show that organisations are making customer and employee engagement central to their existing digital projects, with improved customer experience and improved employee experience a top priority for 51% of respondents. In terms of digital goals over the next 12 months, customer (52%) and employee (45%) experience significantly outrank other digital goals including bringing new products and services to market (35%).
“It’s great to see brands prioritising people by putting their customers and employees first,” says Elsewhen co-founder and chief product & strategy officer Leon Gauhman. “However, this new data also confirms what we’ve seen anecdotally: that businesses across a range of markets are struggling to articulate the steps required to implement digital transformation.
“While most brands understand the importance of digitalisation, the data shows that many aren’t placing digital at the core of their organisation,” he adds. “ What’s more, a lack of knowledge, experience and managerial commitment is hampering progress, preventing brands from reaching their full digital potential. It’s clear that leadership needs to play an even bigger role in translating digital ambition and strategy into effective, real-world and lasting results. This involves ensuring digital technology and design leaders having a place at the table when it comes to shaping companies’ strategic direction.”
The survey also highlighted the costs of poor digital delivery, with projects that failed to meet expectations having far-reaching effects. These include revenue growth lower than expected (42%), failure to meet compliance requirements (41%), impact on budgets (38%), delayed product launches (36%) and IT security risks (35%).
Consultancy may have a powerful role to play here, with an impressive 100% of respondents describing their most recent third-party project as either meeting (45%) or exceeding (56%) expectations. What’s more, longer-term relationships work best. Companies that rely on third-party digital services more than half the time are significantly more likely to say that the most recent digital project exceeded expectations (65%) compared to those who use the same services in half or fewer digital projects (46%).
“It’s encouraging that consultants are delivering value around organisations’ complex digital journeys,” says Gauhman. “While major enterprises are increasingly hotbeds of digital talent, these results show that working with an unbiased, trusted partner will significantly improve the outcome of digital projects.”
The survey was conducted by research firm Vanson Bourne on behalf of Elsewhen in Q3 2022.
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Elsewhen’s survey canvassed 200 decision-makers at major UK companies across multiple sectors (including FMCG, retail, financial services and healthcare sectors) in Q3 2022.