Although the concept of digital is about more user-friendliness, efficiency and loss of friction, digital transformation, ironically, proves to be hard work. Despite the pace of digital disruption, a lot of businesses are only taking digital baby steps. This is the conclusion of the ‘Digital Transformation Index II’ report, listing the results of an inquiry by technology companies Dell Technologies and Intel in collaboration with market research partner Vanson Bourne among 4.600 business leaders from medium and large enterprises in 42 countries.

While 78 percent of all respondents feel that digital transformation should be more widespread within their organization, 51 percent expect to experience difficulties in meeting the changing needs of their customers within the next five years. Almost 1 in 3 companies (30%) fears it will fall behind on the competition. According to the study upcoming markets are the most digitally matured with Brazil, India and Thailand leading the pack. But already developed countries such as Japan, Denmark, France and Belgium are playing catch up.

Lagging behind the curve

Businesses are met with new developments right, left and center and therefore have a hard time keeping up. About 4 in 10 businesses still find themselves in the bottom groups of the digital maturity benchmark: the digital followers who make very few investments and carry out tentative plans and the digital laggards who have no digital plans at all. A positive note to take away is the fact that the number of digital adopters, with mature digital plans, investments and innovations in place, has increased with 9 percent. But what’s disquieting is that the percentage of digital leaders, those who have digital ingrained in their DNA, hasn’t increased at all since 2016 and stagnates at 5%.

Only halfway there

Since 2016 every industry has matured digitally but the progress has not been as significant as hoped or expected. The telecom and technology industries are somewhat ahead of the rest, while the insurance, manufacturing and public healthcare sectors are trailing. What’s striking is that the difference between each and every industry isn’t in fact all that big. That’s because no matter the specifics of the industries, they all are confronted by the same challenges of digital transformation. But the bottom line remains disappointing: Across the board, we are only about halfway there. There is still much to be done.

The challenges of digital transformation

The confidence of many business leaders in the face of digital transformation is low, as no less than 91 percent encounter multiple obstacles on the path towards a digital future. When comparing these challenges to those of 2016, it’s clearly noticeable that concerns about regulations and legislative changes have in no small way moved up the ladder. With the arrival of the GDPR, this comes as no surprise. Data privacy and security concerns are businesses’ biggest concern, moving up from the fifth place back in 2016. Regulation and legislative changes also moved up five spots and then there’s the fear of information overload through newly developed technologies such as Internet of Things and AI.

Why digitalization?

So you could say: Why bother? But despite the challenges, business leaders are convinced that persevering in their digital transformation will eventually deliver game-changing benefits, most importantly an increased productivity rate, profitability, revenue growth, customer retention and return on IT investments.

This is positive because business should always be the driving factor behind digital transformation. And not IT. A lot of businesses turn this around while the role of IT should be one of support and not control. It’s the only way. Also, in the process of digital transformation many businesses tend to try and make digital copies of their existing analog processes. Don’t make the same mistake. The flow of an analog process is what it is because it works best that way. A 1-on-1 digital copy will probably not be as efficient as the user experience might be different.

Customer onboarding

So when you embark on the road to digital transformation, do so together with your customers. Get them on board, use their external insights and shape your business to their specific needs instead of the other way around. This will immediately impact your internal processes and boost customer retention and your business in the long term.

Because customers do prefer digital. Studies show that they are more open to digitally matured businesses, as they like to engage with chatbots on websites, prefer digital invoices and payment options over cash and credit cards and so on. It all trickles down to an improved customer experience, interactivity and user-friendliness. As such, actionable communications are the pinnacle of customer engagement.

From analog to interactive

Do you feel as if these kind of interactive communications are still a step too far for your business? Don’t worry. Just like digital transformation, interactive customer communications is a goal to strive for and achieving this is done by taking one step at a time. Next week we will shed a light on the three different levels of customer communications: analog, digital and interactive. So keep an eye out for our next blog, discover what level you are at and what you can do to take that next step forward.