Digital Investments Pay Off In Performance, Efficiencies, Collaboration
Large, global companies that extensively employ digital technologies reap the benefits in greater performance, efficiencies and collaboration, according to a study of senior IT and non-IT executives conducted by The Economist Intelligence Unit (EIU) on behalf of CSC .
The report, “What Makes Digital Leaders: A Full C-suite Perspective,” explores the link between digital technologies and business success. It reveals corporate decision-makers’ wide-ranging views on the strategic benefits and operational value of information technology, current investments in IT, and how businesses intend to adopt digital technology over the next three years.
More than 500 CEOs, senior IT executives and other C-level executives from global enterprises participated in the survey. According to the study, a select eight percent of respondents were identified as “digital leaders” because their organizations are entirely digital across major functions.
Digital leaders were said to enjoy distinct advantages: “they far more often view IT as crucial to meeting their companies’ strategic goals, are more often globally integrated than other companies, and are much more effective at information sharing across functions and regions,” according to the study.
- 37 percent of digital leaders report their financial performance was much higher than competitors in the past fiscal year, compared with just 11 percent of respondents at other companies.
- Digital leaders are ahead of other companies in prioritizing investments in the public cloud, in collaboration software and in cloud-based applications services.
- 63 percent of digital leaders plan to increase overall IT spending somewhat or significantly in the next three years, compared with 52 percent of other companies.
- 44 percent of digital leaders indicate the CEO is the primary driver of IT strategy, which suggests that these companies place added emphasis on the importance of technology in achieving business goals.
“Digital leaders are far more confident than those at other companies regarding IT’s ability to deliver both the technology and strategic benefits that will support growth, performance and client satisfaction,” said Dan Hushon, CSC’s chief technology officer. “Digital technologies, such as cloud computing and mobile applications, have the potential to transform fundamentally the way businesses operate. Companies looking to develop an IT strategy for the fully digital future could gain valuable insight from the approaches that have worked so well with these digital leaders.”
Most Companies Lag in Digital Adoption
While predicting that investment in IT will increase over the next three years, the study found that most companies have yet to fully take advantage of newer digital technologies.
According to those surveyed, while digital leaders more often put a high value on IT’s contribution to the organization, many companies regard IT as operationally helpful but not crucial to strategy.
According to respondents:
- IT is seen as a crucial partner in meeting their company’s strategic goals at 51 percent of digital leaders, compared to 27 percent of all executives.
- More than half (54 percent) indicate that they are becoming more digital to raise efficiencies, and 35 percent see cost-cutting as their primary goal.
- The central IT function controls at least some of the IT budget at 85 percent of digital leaders, compared to 63 percent of all executives.
- Slightly more than one-quarter view digital technology as a way to keep up with new, fully digital companies, while just 10 percent view technology as a way to surpass competitors.
- Surprisingly, while more than one-third plan to start using cybersecurity tools in the near future, spending on cybersecurity is lagging far behind other tools despite the risk associated with cyber breaches.
“In general, the survey found that most companies expect to become more digital,” said Josselyn Simpson, Americas editorial director, thought leadership, EIU. “Digital leaders are enjoying certain advantages, the survey shows, and companies that take a cue from these pioneers to develop effective linkages between their business and digital strategies should be able to see similar improvements.”