Digitalize your business and increase the turnover

Greseli prin care iti distrugi credibilitatea la locul de munca

With only 42% of companies having a website, with 33% of employees using the computer for their daily activities or 7% of companies selling their products online, Romania is the last in the EU digital ranking. But is there any direct relationship between the level of digitalization of companies and the turnover they generate? To find out the answer to this question, we extracted relevant data from the 2018 edition of the Barometer of Digitalization of Companies in Romania, conducted by consultancy company Valoria.

  • Influence of digitization– Among the respondent companies, those with the revenue range of 50-100 million euro were most strongly affected by digitalization (59%), followed by those with over 100 million euro (50%) revenue and start-up with revenues below 1 million euro (48%).
  • Know-how for digital transformation– When it comes to the knowledge needed to implement digital transformation, 61% of companies on the revenues range of 10-50 million euro say they are highly prepared, followed by 56% of companies with revenues of over 100 million euro and 55 % of companies with incomes below 1 million euro.
  • Digital business models – For 75% of companies with turnover over 100 million euro, new business models have greatly changed the industry in which they operate, followed by 41% of companies with a turnover of 50-100 million euro and 36% of those with turnover between 10-50 million euro.

The perception that digital business models will continue to change over the next 1-3 years, the industry in which it operates is confirmed by 47% of companies with turnover of 10-50 million euro and 50-100 million euro and 42% companies with a turnover of more than 100 million euro.

Interestingly, in this context, 81% of companies with turnover over 100 million euro, 75% of companies with turnover of 50-100 million euro and 92% of companies with a turnover of 10-50 million euro says digital business models are not a threat.

  • Digital leadership – Only 46% of companies with revenues of 10-50 million euro have given the responsibility of a top management for digital business development, followed by 41% of companies with revenues between 1-10 million euro and 38% those with revenues over 100 million euro. Companies with 10-50 million euro in revenue say they have the best expertise at top management level to assess and develop a digital business model.
  • Capitalizing on digitalization as a competitive advantage – Although on average 58% of all companies say they have capitalized on digitalization in order to gain competitive advantage remains a significant percentage of those who still work in this regard.

The reasons why companies do not capitalize on digitization are related to security concerns for 60% of companies with revenues over 100 million euro, the fact that there are no digital consumers for 57% of those with revenues between 50-100 million euro, respectively resistance to change for 45% of companies with revenues of 10-50 million euro.

  • Digitalization and turnover increasing – Companies recognize the benefits of digitalization in reducing costs, streamlining processes, but too little seeing and increasing revenue. Intelligent operational management systems, given analytics and Internet of Things appear to be the main products / services that companies intend to adopt.

Most of the companies generating revenues ofmore than 100 million euros (40%) expect digitalization to increase their turnover by 10% -20% in the next 3 years. Companies with a turnover of 50-100 million euros (42%) expect to increase it further by only 1% -5%.

In conclusion, the survey results show that high-income firms are strongly interested in implementing digital solutions to strengthen their dominant position in the market. Small businesses are privileged because they either have a digital DNA or have very little change to be done in their business model for digitalization. Today, digital solutions are tailored to each level of income and investment financing schemes are very diverse. That is why we can say that the advantage of digitalization is in the eyes of the beholder.

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

Constantin Măgdălina has a 8 years working experience, while he performed in multinationals both in Romania and abroad. Constantin owns a Master in Marketing and Business Communication at the Academy of Economic Studies Bucharest. He is certified Lean Six Sigma and ITIL which provide him a good understanding of processes and transformations within organizations. The Chartered Institute of Marketing certification furthered on complemented his expertise and knowledge in business. In those over 4 years working activity in a Big4 company, he initiated and conducted studies which analyzed different aspects related to the business environment in Romania such as the economic growth predictions of companies in 2013-2016, knowledge management, the buying experience in the age of digital consumers, social media 2013-2015, the utilization of mobile devices in Romania.

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