How your business can unlock digital value
How can your business unlock its true digital value and seize the digital opportunity?
Ireland’s digital economy represents €12.3bn (6%) of Ireland’s GDP and is expected to expand to about €21.4 billion or 7.9% of GDP by 2020, according to a 2016 report by the Department of Communications, Energy and Natural Resources.
Many Irish companies are already being proactive in recognising the total potential revenue impact of digital technologies and pushing forward quickly, but a new White Paper commissioned by Cognizant warns that staying behind in the digital curvey could cost companies in Ireland and across Europe in the region of $808m in lost revenue.
The Work Ahead – Europe’s Digital Imperative, includes research undertaken in conjunction with renowned economist Nouriel Roubini, and surveyed 800 senior executives across Europe as part of a global study into understanding the changing nature of work and what constitutes success in the digital age.
Irish companies are clearly recognising that investing in digital tools and technologies is effective in driving new business models, new revenue streams and building and enhancing new types of customer relationships.
As author Euan Davis states: “If you are not using technology to reduce costs, automate aggressively in the back office or sift for gold in the data streams running through your business processes, then the digital switch will be very hard”.
So what are the key themes that emerged from the study and what are the actions needed to effectively unlock digital value?:
1. Generate Your Own ‘Digital Dividend’
So how do companies generate their own ‘digital dividend’?
Those surveyed were unanimous in the importance of new digital tools and technologies, recognising that they equal revenue. The potential revenue impact of digital is set to treble over the next 2 years. Companies should learn to ‘see value in the virtual’ and keep an open approach to virtual.
2. Machine Learning, AI and Data Will Unlock Value
The new ‘machine tools’, machine learning, AI and data, will unlock significant value ahead and smart leaders are using savings from this. Digital transformations could add up to $930m value over the next 2 years among the industries surveyed in Europe.
3. Don’t Lag Behind Or Pay the Penalty
Companies that lag behind the digital curve and don’t ‘up’ their digital game will pay a large ‘laggard penalty’ every year. In 2015, the laggard penalty reached €156 billion among the surveyed companies. The key to minimising this risk is to prioritise and do what it takes to broaden or improve digital presence and bring the physical and virtual together.
4. Digital is Going to Intensify – Don’t Risk Obsolescence
Digital is only going to intensify. Within those surveyed, 24% of business leaders surveyed fear data privacy; 21% face budget constraints and couldn’t prove the business case and 14% reported talent gaps, preventing them from ‘turning on the digital switch’. The findings from the research stress that it is now key for companies to find the budgets to give them a fighting chance. “If your company isn’t looking at analytics, meaning meaking, AI or platforms, then you’re risking obsolescence.”
5. Strong, Confident Leadership is Needed
From those managers surveyed, 37% see a lack of clarity at the top concerning digital; 35% expressed frustration at the speed of change and 34% believe the wrong executive leadership is in place to do the work ahead. Are the right people in charge? Command and control structures, long decision cycles and silo-based mentalities will kill digital. A digital reorganization needs to be on the cards.
So what is needed for ‘The Work Ahead’? As author Euan Davis puts it: “Something big is going on. Emerging digital technologies will have a massive impact on the industry by 2020 or 2025. “Business leaders who don’t use technology to lower costs, automate aggressively or glean insights from the data generated by business processes will find the digital switch jammed in the off position”.
Read the full Cognizant Whitepaper here ‘The Work Ahead: Europe’s Digital Imperative’.