Digitally aware but not digitally capable

digital awarenessThis seems to be one of the key messages from a recent study performed by Vanson Bourne and the Institute for the Future on behalf of EMC, a leading provider of technology products and services. The study, which covered 3,600 executives from 18 countries and representing a broad range of industries including financial services, retail, manufacturing, media and telecoms, looked at how new technologies and changes in customer expectations were impacting businesses and their priorities.

Not surprisingly 93% of the respondents said that their organisations had felt the impact of technology over the last 5-10 years. And just about every respondent (96%) believes that new technologies such as social, mobile, analytics and cloud (SMAC) have permanently changed the rules of doing business.

It is perhaps surprising then that only 68% of executives said that digital technologies were already having a direct impact on the way they do business. So, whilst 96% believe that these new technologies have changed the rules of business, only seven out of 10 say that their organisation has been affected by this change. Are the others lucky not to have been impacted or blind to how their organisations are being changed by digital?

And perhaps more worrying is that only 73% believe that digital will directly impact the way they do business over the next five years. Digital will come to every industry at some stage; it is not a question of if but when. Assuming that it will not affect your business at any point over the next five years could be a costly mistake (see So you think digital doesn’t apply to your business?). And given that just about every executive covered by the study said that technology has changed the environment in which their business now operates, it is difficult to reconcile these two findings; 27% of executives do not see digital as something that will affect their business despite saying that digital technologies have changed the rules of business.

Perhaps some members of the C-suite do not see a connection between SMAC and digital, instead viewing them as separate things. Whilst there is a lot more to digital than technology, SMAC do provide the foundations for digital business models, products and services. Without such technologies, it is not possible to become a digital business.

The study also asked the respondents how technology had changed customer expectations. The top five responses provide a good summary of what organisations should be aiming for when creating digital experiences:

  • Faster access to services (55%.)
  • 24/7 access and connectivity (53%).
  • Access via multi-channel platforms (50%).
  • Personalised experience (47%).
  • Greater transparency (38%).

This list also demonstrates that, despite some executives not seeming to understand the connection between technology and digital, many members of the C-suite are aware of how technology is changing customer expectations in the digital age.

The study also identified a number of attributes that businesses would need to acquire in order to succeed as a digital business. These are:

  • Predictively spot new opportunities.
  • Innovate in an agile way.
  • Demonstrate transparency and trust.
  • Deliver and unique and personalised experience.
  • Always on, operating in real time.
  • Pursue continuous learning.

This is a good list and any business that can demonstrate a high level of capability against each of these attributes will be well placed to cope with the challenges of operating in digital markets.

The survey respondents were asked which of these they would put in the top three for their business and also to indicate whether they felt their organisation was currently addressing these attributes extremely well. The results are shown in the graphic below.

Digitally aware but not digitally capable - bar chart

The results show there is broad agreement about the top three attributes amongst a majority of executives across different industries and throughout the world. However, whilst it is inevitable that digital will impact every industry at some point, the way in which each industry will be affected could be different. Hence whilst the complete set of attributes are relevant to every type of business, the importance of each attribute may vary by industry. The main point though is that executives are aware of these attributes and how important they are in ensuring their business can compete in the digital space.

The more revealing aspect, however, is the data on how well the respondents feel their organisations are currently addressing each attribute. This shows a significant gap between the importance of each factor and current capability for all except the need to pursue continuous learning. And for the top three in particular this gap is worrying. For example, the ability to use data and analytics to spot new opportunities was cited by over 60% of executives as being a top three attribute. Yet less than one in four believe their business currently performs well against this attribute. That indicates a large gap between awareness of what is needed for digital and the capability to deliver what is needed.

Whilst the survey findings indicate that executives are aware of how digital is changing business rules and customer expectations, and what attributes their organisations will need to deal with these changes, it also shows that there is still much work to do build the required capabilities. Digital disruption will come to every industry; it is not a question of if but when. And that disruption could happen at any point. Organisations that are not developing the required capabilities are running out of time. And for some it could be too late already.

If your organisation wants to improve its senior team’s awareness and understanding of digital, develop a vision and strategy for its digital transformation, or reinvent its business model for digital then please contact me or visit my website, axin.co.uk.

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