Companies are still not well enough equipped for the transition to digital, there is a striking lag between identifying the need to move to digital technology and actually doing so, and too few companies look externally for innovation ideas, says a recent global survey.

Companies Need to Rethink their Strategies in the Light of Digital

Although the phenomenon of the ‘digital revolution’, the subject of the latest book by French multi-entrepreneur and digital ambassador for France, Gilles Babinet, is no longer in any doubt, there is still the question of what exactly is preventing companies from moving in that direction. The sixth annual Digital IQ survey by multinational professional services firm PwC throws some light on the issues. While over 80% of the business leaders (close to 1,500 respondents from 36 countries across a range of industries) polled expressed the wish to enhance their company’s digital capabilities, only “20% of respondents in this year’s Digital IQ Survey rated their companies as having ‘excellent’ Digital IQ,” reveals the report. There are a number of reasons for this gap. Some 74% of the business and IT executives quizzed are worried about their inability to understand and adapt quickly to emerging technologies, with the result that only 46% of them integrate digital innovation into their overall company strategy. This figures sits uncomfortably alongside the 81% of business leaders polled who believe that over the next five years it will be advances in technology that drive the biggest transformation at their companies. Moreover, the survey found that firms which use digital technology most actively are also the most innovative and most profitable. Companies therefore need to start doing things differently, argue the PwC consultants.

Enhancing the role of IT and HR management

“It’s no longer a matter of having a digital strategy, but of having a strategy for a digital world,” stresses Matthieu Aubusson, PwC’s Leader for Digital Transformation France. Fully 81% of top performing companies say their CEO is an active champion in the use of IT to achieve business strategy goals. The report argues that the Chief Marketing Officer (CMO) and Chief Information Officer (CIO) must nowadays have a close working relationship. A large number of digital initiatives involve the Marketing department – mobile applications, websites, the use of customer data, etc – so breaking down silos within the company is now a must. The survey reports 70% of top-performing companies as saying they have a strong CIO-CMO relationship, compared with just 45% for lower performing firms. Last but not least, the transition to digital technology requires the adoption of a specific programme designed to manage digital skills across the company. This means HR departments have an essential role to play, recruiting and managing the new digital posts – Chief Digital Officer, Data Scientist, etc – in a different way. Of course the IT department also plays a vital role. IT management should no longer just be content to align on company strategy, but ought rather to be showing management all the opportunities on offer from disruptive technology, stress the PwC authors.

Throwing open the doors to innovation

All the business and IT executives surveyed for the report acknowledge that innovation is a strategic priority for the coming years as it will drive growth and profitability. In order to encourage innovation, companies will have to look outside their own walls, argues PwC. The report recommends that different departments across the company should be encouraged to work more closely together, and also to work with external partners, including innovative startups, universities and laboratories. As digital is by nature a collaborative area, it should be a natural field for outside collaboration. Referring specifically to France’s prospects on the digital front, Loïc Mesnage, Head of Technology Consulting at PwC, pointed out that the country “enjoys substantial levels of skill in all areas of digital technology – data, programming, design, man-machine interfaces, and so on. Companies need to take advantage of this French innovation DNA,” he underlined. With the support of France’s vibrant digital ecosystem, French companies should be well armed to capitalise on the digital transition, argues Loïc Mesnage.