9 Key Digital Transformation Statistics for 2018 (with infographic)
Enterprises around the world are pushing forward with their Digital Transformation initiatives. The common understanding of what Digital Transformation actually is and how to plan, prepare and execute it successfully is continuously maturing, although various research reports still either directly state or their findings show the level of ambiguity is still high.
This article discusses some important and interesting statistics from relevant sources as a way to portray the Digital Transformation situation in 2018.
State of Play
1. 55% of startups have already adopted a digital business strategy compared to 38% of traditional enterprises. (IDG, 2018 State of Digital Business Transformation)
2. 89% of enterprises have plans to adopt or have already adopted a digital-first business strategy with Services (95%), Financial Services (93%) and Healthcare (92%) leading all industries. (IDG, 2018 State of Digital Business Transformation)
Looking at the above numbers, the fact that “55% of startups already adopted a digital business strategy” initially sounds impressively high. However, thinking about it, with all the hype around Digitalization and Digital Transformation, when someone is starting a business these days, wouldn’t you expect them to plan for, to say the least, Internet and social media presence? If so, then you would perhaps agree that it is actually peculiar that this number is not closer to 90%.
The second part of the first statement reads that 38% of traditional enterprises have adopted a digital business strategy, which is lower than the startups percentage, expectedly. Now let’s look at the second stat; “89% of enterprises have plans to adopt or have already adopted a digital business strategy”. If we combine the two statements, we can conclude that a significant part of the 90+ percentages for the leading industries are really only “plans to adopt digital business strategy” and not the adopted strategies.
Conclusion? It looks like the DX race is well under way, but we are still in its early stages.
Value from Digital Transformation
3. 39% of Executives expect their organizations to get the most value out of digital initiatives in 3–5 years. (MIT Sloan Management Review & Deloitte Digital, Coming of Age Digitally 2018)
4. 21% of North American and European enterprises think their Digital Transformation is done. (Forrester)
The fact that 39% of Executives expect the value out of digital initiatives in 3 to 5 years is encouraging. This shows the Executives have a good understanding that Digital Transformation is a complex domain and not simply a technology upgrade. However, Digital Transformation experts helping the Executives to drive the digital initiatives forward should always look for low hanging fruit where the benefits can be achieved much earlier. There are no reasons why investments in certain digital domains would not return the value faster. Implementing an e-commerce solution, introducing a mobile app or fixing those customer records with a low-cost cloud-based digital CRM solution are just some examples where benefits should be seen significantly earlier than 3–5 years.
The second statistic is, however, the one we should scratch our heads about. If 21% of North American and European enterprises think their Digital Transformation is done, then we can almost certainly conclude at least the same 21% do not actually understand what Digital Transformation is (as nicely depicted by Marketoonist). With new digital trends emerging at the speed even the influencers are struggling to keep the pace with, Digital Transformation should only be seen as an ongoing process and nothing else. Therefore, do not treat it as a project and try to push for deadlines to close it off; if you done-stamp it and file it in a drawer, it is highly likely your enterprise will in 3–5 years see more gaps than value from the archived “project” regardless how successful was it marked as. Have a permanent leader who can drive the domain forward continuously and you will be in a much better position down the line.
5. In the future, 9 out of 10 jobs will require digital skills. 44% (169m) of Europeans between 16 and 74 years do not have basic digital skills. (European Commission)
6. 47% of Chief Information Officers say they need new skills to implement Artificial Intelligence. (Gartner)
As far as it is recognized and acknowledged, the lack of skills issue is something we as a global society should be able to handle. And if we were to say that there is a right order to it, whether top-down or bottom-up, I believe we would be wrong. From basic digital abilities to the most advanced AI skills, the digital knowledge should be, most importantly, easily accessible, encouraged and supported by governments and businesses.
The education system itself, however, needs to go through Digital Transformation as well. The use of mobile and cloud technologies should be widely adopted and the advanced trends like augmented and virtual reality, artificial intelligence or gamification should find their place in the education methods as soon as possible.
Speed of Technology Adoption
7. 70% of enterprises will use a multi-cloud strategy by 2019 compared with less than 10% in 2017. (Gartner)
8. Only 15% of enterprises are using AI as of today, but 31% are expected to add it over the coming 12 months. (Adobe)
We already mentioned the staggering speed the new digital trends are emerging at. The pace of technology adoption is following and rapidly breaking the chart boundaries. If we look solely into the consumer market, then one of the main reasons has to be millennials’ rapid adoption habits. On the businesses side, the message “transform or die”, persistently repeated over years must have made some impact. Ultimately, the rate of new startups being formed around the latest technology trends, supported by new ways of raising funds such as crowdfunding or recently popular ICOs, has also had a great influence on the global technology adoption speed.
What about ethics?
9. Only 48% of Millennials now believe corporations behave ethically vs. 65% last year. (Deloitte, 2018 Millennial Survey)
Although the above statistic is about trust in corporations and their ways of working, I believe it is critical to underline that the state of things with ethics is not great and is declining even from a wider perspective.
The ethics subject does not get the same attention the technology advances do and that is to the extent that we can say that the ethics domain is virtually neglected. Unfortunately, with Artificial Intelligence expanding into all aspects of our lives, we are right to raise a worrying question; where it is all leading us to?
In the past few years we had a number of science and technology leaders warning us about the danger of AI; from Stephen Hawking, Bill Gates, Elon Musk, Eric Schmidt or Steve Wozniak (check the article from Techworld) to 24 top researches from 14 organizations who wrote a 100-page report about it (refer to the article at Motherboard). It should be widely recognized that the only way forward is to try to prevent the potentially existential problem by investing significantly more effort & funds into the fast progression of the Digital Ethics.
A few closing thoughts
For those considering sleeping off the DX hype and gliding effortlessly into the next one, do not make a mistake; Digital Transformation is here to stay. Do not think you are late to the party either as the reports are showing most of the businesses are still in the early stages of the process. As the new digital trends are continuously emerging, the transformation process has to be understood and applied as iterative, therefore it is always a good time to start it off.
Your digital strategy should focus on transforming your business and not upgrading your technology stack, however knowing the latest technology trends will help you envision new business opportunities. Therefore, investing in the relevant knowledge along the way is the right way to do it.
Be cautious not to expect the value from digital investment immediately. Look for quick wins and go after them first as the early success will create the additional motivation, secure the stakeholders’ support and help drive the DX forward.
And if you got here mostly for the stats, you will probably like this one: 121 amazing social media statistics and facts.