Why European Organizations Lag in Digital Transformation? 

Digital transformation these days has entered in every industry as organisations are increasingly showing their interest and focusing more on automating routine tasks. But as companies realise its importance in today's competitive landscape, implementing effective digital transformation is still complex for them. In an IDC survey report, seven out of ten European organisations are striving with realising their digital maturity ambitions. However, less than three out of ten have managed to significantly digitise their business models, processes, products and services.

To obtain insights into companies' digital transformation maturity and their growth hindrances, the report surveyed 375 leaders in Europe across multiple industries. Responding to the significance of digitisation for overall business strategy and innovation, 65 percent of leaders reported that they are under considerable pressure to deliver a successful digital transformation strategy.

On the other hand, most of the leaders came under that pressure, because a minimum percentage of companies have succeeded in embracing digitalisation in a complete manner. These leaders have managed to deploy modern digital technologies to enhance and assist in delivering major value across the business, from sales and marketing to operations, IT and finance.

Digital transformation is defined by the integration of advanced technologies alongside the combination of physical and digital systems, the prevalence of innovative business models and new processes, and the creation of smart products and services. The state of the digitisation of industry differs across sectors, mainly between high-tech and more traditional areas, and also between EU countries and regions. Additionally, there are also huge discrepancies between large companies and SMEs.

As part of the research, one aspect that differentiates the leaders from the laggards is the extent to which they harness the power of their data. The survey found that 67 percent of digital leaders have the ability to assess data and leverage insights to answer quickly and precisely enough to address the dynamic market conditions. These leaders are also able to utilize digital to expedite time-to-market and time-to-value to overtake laggards in this regard.

When looking at industries, a minor percentage of digital leaders, in manufacturing, are able to manage digital to better streamline production and to attain enhanced tracking and tracing of materials and products, providing higher levels of productivity. Meanwhile, in sales and marketing, leaders perform better on a range of activities, such as customer targeting and segmentation, campaign management, pricing and promotion orchestration.

The research report further found the primary barrier in advancing companies' digital maturity is data fragmentation. As siloed data results in a lack of visibility across business processes, it leads to a poor decision-making culture. With 45 percent, and 28 percent, the study revealed organizational complexity and the lack of visibility across business processes, respectively, are the other obstacles to growth in digital maturity.

The IDC research also echoes the outcomes of a Capgemini Invent study published last year, which found that on average, European companies lack leadership capabilities for digital transformation projects. Despite this, IDC predicted that 79 percent of organisations in the region will be totally digitised by 2029.