31% of companies say digital disruption is a threat to their business. According to a PwC report, they’re wrong – but it’s not too late.
PwC has been conducting Digital IQ research since 2007, and this year marks the ninth survey of business executives globally. The 2018 edition included 2,280 respondents representing tech, business, and experience executives from over 60 countries.
PwC defines efficiency seekers as focused on doing business smarter and faster using technology. Many of these enterprises have experienced at least one cycle of disruption and therefore feel confident.
Despite this, only 59% incorporate digital strategy into corporate strategy. Moreover, just over half said their leadership is digitally savvy.
In addition, 20% of efficiency seekers said they embrace the most advanced definitions of digital. However, 37% said that this is simply IT.
In equating digital with IT, PwC says “there’s a disconnect between mindset and results.” In effect, efficiencies have secured revenue but enterprises must fully embrace digital in order to accelerate business performance.
In order to do so, PwC recommends upskilling a workforce. This also entails “evolving beyond software, hardware and technical tools into a way of operating and encouraging innovation across the organisation.”
Modernisers are creating new capabilities for the future and many are embracing more advanced digital. Nevertheless, around 50% incorporate digital strategy into corporate strategy.
Nearly half view digital as an investment into integrative technology across the business. Moreover, just 13% said that digital is synonymous with IT – indicating a wider understanding of digital evolution.
In addition, 39% of modernisers said that their digital investments create better experiences for customers. Overall, 74% of modernisers saw customer experience as vital to their digital transformation.
45% of modernisers also said that digital investments are helping combat new industry entrants. This puts them in a strong position, with almost 60% of modernisers saying that they encourage innovation at all levels of the business.
Despite this, only 50% of this group said their leadership enables employees to think differently. Although 68% of modernisers have changed their recruitment process, they are not fully investing in building on existing employee skills.
Industry explorers are breaking new ground. However, less than one-quarter are incorporating digital strategy into their corporate strategy.
37% of explorers also equate digital to IT, an “outdated definition that misses the promise of digital,” according to PwC. The firm insists that embracing broader definitions of digital will enable enterprises to stay ahead.
52% also said that they had an effective customer experience strategy, at a detriment to financial performance. The group was also the least likely to have effective experience strategies when customer experience does not pay off.
Just 31% of explorers said their business faces a serious threat from digital disruption. In addition, just one-quarter said their investments have successfully helped them disrupt their own or other industries.
22% said their leaders were digitally savvy, but just 36% of executives responsible for digital were involved in high-level strategy. Moreover, only 23% explicitly incorporated digital strategy into broader corporate strategy.
Redefiners intend to alter their companies and business model. They are also the most likely to embrace the mindset of “constant innovation, flat decision-making and the integration of tech across the business.”
However, 69% said that their digital investments are delivering less than expected. PwC attributes this to leaders and employees lacking digital savvy and a lack of digital in overall corporate strategy.
Redefiners were the most aspirational group, with 45% embracing the more advanced definitions of digital. However, there was a disconnect between words and actions when it came to customer experience.
Only 53% of redefiners perceived customer experience as critical to business performance. However, financially successful redefiners were more likely to see customer experiences as critical to business performance.
95% of top financial performers in the group had an executive in charge of employee experience. PwC recommends investing in leadership in order to boost employee – and in turn, customer – experience in order to receive up to a 16% price premium.