#1: The Hopes and Fears of CEOs
In modern business, digitization is the word on everyone’s lips. The trend is blurring the lines between industries, forcing companies to reinvent themselves. Those that fail to adopt a comprehensive strategy will trail behind while their competitors move into entirely new market sectors. However, there are potential risks even in embracing change. The first installment of this two-part series examines the threats and opportunities of digital transformation.
Companies are increasingly coming to appreciate the importance of digitization. By the end of 2017, two thirds of Global 2000 enterprises will have a digital transformation strategy in place. But as the trend gains traction, it brings new risks. In fact, 66% of CEOs reported an increase in the number of business threats between the years 2013 and 2016.
Balance, Agility, Expertise
Digital transformation represents a significant strategic challenge for the vast majority of businesses. According to Andy Steer, CTO of itelligence UK, the greatest difficulty is finding the right balance. IT departments need to become more flexible and agile even as they form closer ties to the business itself.
It is not only a matter of achieving balance, however. The pace of change is also a concern. 60% of CEOs in high-tech companies fear that technology is progressing at a rate they cannot match—and that this will hurt their growth prospects.
Under pressure to adapt, businesses require new expertise. Yet in a fast-moving, fiercely competitive environment, there is often not enough talent to go around. It is therefore no surprise that almost a quarter of CIOs cite a lack of available skills as their main barrier to success.
New Business Models and Increased Revenue
Although digitization presents enterprises with considerable challenges, it can provide at least as many benefits. Indeed, 60% of CEOs have identified more business opportunities since 2013, while 54% recognize the trend’s potential to create new business models. It is now up to those enterprises to identify areas that can be improved and capitalize on chances before their competitors do.
In fact, over three quarters of companies have already experienced revenue gains thanks to big data. And financial experts predict that the Internet of Things will yield $11.1 trillion in economic value in 2025. The question is: how do organizations guarantee their share of the spoils?
Turning Threats into Opportunities
Digitization is no longer a luxury, but a necessity. Companies cannot afford to shy away from it forever; they must face it head on. Should they overcome its challenges, they will enjoy a variety of benefits, including greater agility, shorter innovation cycles, and access to new markets.
To ensure a successful transformation and gain a competitive edge, enterprises require cutting-edge technology. This should deliver an intuitive user experience, a single source of truth, real-time insights, and predictive analytics. Our next post reveals how you can convert your business hopes and fears into genuine benefits.
Why Digitization is a Must for Any Company
By the end of 2017, two-thirds of Global 2000 enterprises will have digital transformation at the core of their strategy.