CA Technologies: UK Firms Are Falling Behind In The Digital Race

UK companies are slow in adopting digital transformation initiatives, and it’s hurting their business. Those are the results of a global study by CA Technologies.

According to the study called “Exploiting the Software Advantage: Lessons from Digital Disrupters”, 56 per cent of UK organisations are executing some digital transformation initiatives as a coordinated strategic program, with most popular ongoing projects in workforce efficiency (cited by 48 per cent of respondents), product and service development (43 per cent) and operations and delivery (43 per cent).

On the other hand, 18 per cent of UK organisations still undertake digital initiatives via separate, not always coordinated routes, and 16 per cent use digital more to enhance rather than transform their business.

Now here’s the fun part: When asked about technologies critical to customer engagement and market development, only 33 per cent believed that web-based applications and services are essential, 27 per cent saw mobile technology as critical and just 14 per cent thought the same of wearable technology.

In addition, 9 per cent of UK companies do not believe the Internet of Things will be applicable to their customer engagement.

Companies that do achieve high digital transformation levels have seen an increase in revenue: 86 per cent of UK respondents have seen or anticipate seeing growth in revenue, 85 per cent have seen or are expecting to see increased customer retention, while 69 per cent are now able to act more quickly on business opportunities.

The study also created the Digital Effectiveness Index (DEI), a measurement tool developed from responses relating to market competitiveness and business scorecard metrics.

Using this measure, an elite group of ‘Digital Disrupters’ has emerged: companies achieving high returns from digital investments and driving market and organisational disruption. In the UK, they represent the top 14 per cent of respondents, more than in Germany (13 per cent of respondents), France (8 per cent) and Italy (4 per cent), but significantly fewer than in the U.S. (26 per cent) and India (25 per cent).

Revenue growth among these Digital Disrupters, the study shows, is twice as high as among mainstream organisations (those who are only making an average investment in digital transformation) and profit growth is 2.5 times higher.

The study also highlights the central role that software plays in digital transformation. 53 per cent of Digital Disrupters globally strongly agree that in addition to their core business they are now also a software company – compared to 20 per cent of all UK respondents. And 60 per cent of Digital Disrupters globally strongly agree that they still need to become more of an app-centric, software driven business, compared to only 30 per cent of all UK companies.

Digital Disrupters worldwide currently allocate 36 per cent of their IT budget to digital investments, growing to 48 per cent within three years. By contrast, the UK companies surveyed now devote a relatively low 20 per cent of their IT budget to digital, increasing to 32 per cent in the next three years.