6 out of 10 companies have not the leadership skills needed to develop a digital business model

6 out of 10 companies have not the leadership skills needed to develop a digital business model

According to the survey „The Barometer of Digitization 2018”, conducted by Valoria in collaboration with Doingbusiness.ro, in nearly 6 out of 10 companies (59%) there is not enough knowledge and expertise for top managers to assess and develop a digital business model. In companies with a strong influence on digitization, the percentage of those who believe that their managers have this expertise is 55%, but decreases to 22% -23% in the case of medium and poorly influenced digitization.

„As technology advances, the implications for companies are all the more obvious: start-ups with growing exponential growth become global leaders, digital consumption reconfigures traditional consumer approaches, a new type of employee appears, and the labor market turns fast. The Barometer of Digialtization is the study showing the transformative effect of digitization on companies in Romania. Compared with the 2017 edition, this year’s results indicate an acceleration in the digitization process among Romanian companies. Classification of companies based upon a maturity model, identifying the obstacles they face, the digital products/services they plan to adopt, and measuring the impact of digitalization on turnover, profit, employee numbers or company value make The Barometer of Digitalization a benchmarking study”, says Constantin Măgdălina, Expert Trends and Emerging Technologies, co-author of the research.

47% of companies say they have been greatly influenced by digitalization

In Romania, 47% of companies in 2018 compared to 35% a year ago, say that digitalization has already had a big influence on them and only 2%, compared to 7% in the previous study, say they had no influence.

In 2018, 53% of companies, compared to 31% in 2017, say they are confident about digitalization because they have the knowledge to navigate the process. On the other hand, 47% still have difficulties with the digital transformation. Of these, 28% are (somewhat) unconvinced to capitalize on this trend. Only 1% of companies say they do not think digitalization is good for the company.

It is noteworthy that 81% of companies strongly influenced by digitalization are confident and believe they have the knowledge to go through this process. On the other hand, the percentage of those who are somewhat confident that they will capitalize on this trend are still the highest (45%) among the companies that say they were moderately influenced by digitalization, almost equal (44%) with the least influenced.

29% of companies say digital business models will turn their industry into 1-3 years

Beyond the transformation of technology and processes, the most powerful transformation effect of digitalization is the one at the level of the business model. Thus, in 2018, 25% of the Romanian companies, compared to 19% in 2017, believe that digital business models have greatly changed their industries. Also, the percentage of companies in Romania that consider digital business models as a threat increases from 12% in 2017 to 21% in 2018.

If in 2017 21% of companies expected digital business models to turn them over the next 1-3 years to a very large extent the industry in which they operate, in 2018 their percentage has increased to 29%. Similarly, 39% in 2018 vs. 38% in 2017 companied say digital business models will greatly transform the industry, and 23% vs. 27% believe digital business models will only somewhat affect their industry in the next 1-3 years.

Only 54% of companies have made digitalisation the central part of the business strategy

This survey by Valoria reveals that just over half of companies (54%) have made digital transformation a central part of their business strategy. For the companies most influenced by digitalization, the percentage is 73%, but the percentage drops to 44% for the moderately influenced ones and 22% for the ones least affected by digitalization. Conclusion – There is still much to be aware of and to do for active companies in Romania to benefit from digitalization.

Unfortunately, 62% of the companies in 2018, compared with 67% in 2017, say they did not give the responsibility to a leader for digital business development. The consequences can be delays in strategic decisions, insufficient support for the implementation of digital transformation strategies, and inefficiencies in achieving technology integration across the company.

Research results show that in 2018, in nearly 6 out of 10 companies (59%), there is not enough knowledge and expertise available to top executives to assess and develop a digital business model. In the companies highli influenced by digitalization, the percentage of those who believe that their executives have this expertise is 55% and drops to 22% -23% in the case of the companies moderately and least influenced by digitalization.

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