Risk aversion a key roadblock to digital transformation – Deloitte
A significant number of companies are failing to derive business advantage from their technology, according to a report released by Deloitte.
The report, which surveyed more than 3,500 business executives and managers globally, found that many companies are not making necessary changes to their talent, culture, and organisational structures to take full advantage of their digital potential.
What is more, a significant proportion of companies were struggling to implement a clear digital strategy to support their business’s digital evolution.
Nearly 40 per cent of surveyed executives said they must improve their digital strategy and innovation in order to progress to digital maturity.
Researchers from the Massachusetts Institute of Technology (MIT) Sloan Management Review and Deloitte Digital compiled the 6th annual Digital Maturity survey, revealing the transformation habits of digitally maturing companies and how they compare against their start-up rivals.
According to the results of the survey, maturing companies were four times more likely to have a clear and coherent digital strategy in place than their early-stage rivals.
Approximately 75 per cent of digitally maturing entities plan to increase the monies and resources they put into digital business initiatives during the next 12-18 months.
Furthermore, the study found that risk-averse companies were struggling to deliver a successful digital transformation.
Indeed, digitally mature companies were far more likely to adopt a high risk, high reward approach to innovation versus their startup rivals: 71 per cent of digitally maturing organisations accept the risk of failure and actively encourage their organisations to experiment, compared with 29 per cent of early-stage companies.
Digital maturity, defined as the means by which organisations systematically adapt to ongoing digital change, provides companies significant competitive leverage in an increasingly digital-centric marketplace.
The study found that companies that have achieved the greatest success with their technology are those that track how their customers, partners, leaders, employees, and competitors are using digital technologies and adjust their business practices accordingly.
Digitally mature companies were also proving a significant drawcard for talent, according to Frank Farrall, Lead Partner, Deloitte Digital Asia Pacific.
“Driven by investment from leadership, opportunities to develop in a digital environment, and a culture that rewards collaboration, experimentation and risk taking, these companies are not just keeping pace with digital change, they are more likely to retain talent, including executive-level talent, than early stage entities,” Farrall said.
Survey results also revealed a clear preference for breaking down traditional silos between digital and traditional structures, adopting a cross-functional working approach.
More than 70 per cent of digitally maturing businesses are using cross-functional teams to organise work and implement digital business priorities, compared against less than 30 per cent for early-stage organisations, the report revealed.