What does digital transformation (DX) look like in 2021? The need for digital technologies and the demands of customers are changing. In this article, we will be looking into some crucial digital transformation statistics that will help your business to start the transformation journey and succeed.
Digital transformation is a solution to the business crisis in times like Covid- 19 pandemic. The terms like digitization, digitalization, digital technologies are no longer just concepts that businesses have heard of. It is now a fundamental strategy for any business. CIOs today must focus on transforming the business model. They should keep up with the pace to gain a competitive advantage, focus on improving customer experience, and steer the business towards growth.
Digital transformation is important for any business to stay ahead of the competition and succeed in a current digital-first world. Companies need to transform their business models to keep pace with the ever-changing business environment. Otherwise, they will fail to keep up with the changes brought by new technologies or situations like Covid-19.
There is plenty of research to find out the statistics of digital transformation. And the statistics can explain to you how essential it is to every business. So, we have listed the beneficial facts and statistics of DX that will make the job easy for you. These facts and statistics help your business to understand:
- Why should you invest in digital transformation?
- The benefits that you get from digital transformation.
- Challenges that you might face during digital transformation.
Why should you invest in digital transformation?
Your company is going through digital transformation? This is great! Digital transformation is a big topic in the current market.
- By 2023, the spending on the technologies and services that enable digital transformation worldwide is expected to amount to 2.3 trillion U.S. dollars. Source: IDC This is more than half of all Information and communications technology (ICT) spending.
- The digital transformation market is expected to grow at a CAGR (compound annual growth rate) of 22.7 percent from 2019 to $3,294 billion by 2025. (Research and Markets).
- At least 90% of new enterprise apps will insert AI technology into their processes and products by 2025. (IDC)
- 77% of CIOs name Digital Transformation as their biggest budget priority of 2021. (Constellation Research)
- 89% of organizations have plans to adopt a digital-first business strategy. (IDG)
Digital Transformation in post covid-19 world
- Even before Covid-19, 70% of companies stated to either have a digital transformation strategy in place or were working on one. ( Zdnet)
- While 52% of companies plan to cut or defer investments because of COVID-19, just 9% will make those cuts in digital transformation. (PwC)
- During the 2020 pandemic, there was a 15 percentage point increase in use of digital tools for health support by consumers. And, 37 percent of consumers are very likely to use telehealth in the future. (McKinsey)
Benefits of Digital Transformation
- 45% of companies reporting a positive business impact of digital transformation also reported higher net revenue growth. (Deloitte)
- Digital-first companies are 64% more likely to achieve their business goals than their peers. (Adobe)
Image taken from: Artificial Solutions
- 84% of executives interviewed by Harvard Business Review agreed that new business opportunities are emerging as their organization digitally transforms. (RedHat)
- Executives say the top benefits of digital transformation are improved operational efficiency (40%), faster time to market (36%) and the ability to meet customer expectations (35%). (PTC)
- High-tech B2B companies have reported a 10% to 20% cost reduction and revenue growth of 10% to 15% from transforming their customer experience processes. (McKinsey)
- According to the survey conducted among retailers, the biggest challenge overall is the complexity of the implementation, with more than three quarters (76%) rating it as somewhat challenging or highly challenging. Other key challenges are the availability of talented staff (75%), upfront costs (75%), the time necessary to achieve benefits (75%), and security and privacy concerns (74%). (Fujitsu)
- 56% of CEOs say digital improvements have led to increased revenue. (Gartner)
Digital transformation and customer experience (CX)
- Some 27% of brands improved their CX this year, which is 13% higher than the previous year. They improved by focusing on core CX competencies. (Forrester)
- 81% of marketers expect to be competing mostly or completely on the basis of customer experience with their competitors in two years. (Gartner)
- Digital transformation and a focus on customer experience can generate a 20-30% increase in customer satisfaction and economic gains of 20-50%. (McKinsey)
- Companies that earn $1 billion a year earn an additional $700 million over three years by investing in customer experience. (Qualtrics)
Challenges in Digital Transformation
- More than a third of CIOs anticipate difficulty in finding appropriate skillsets in the tech areas of cybersecurity and data science. (IDG)
- 45% of executives don’t think their company has the right technology to implement a digital transformation. (PWC)
- 37% of CEOs are considered by employees to be holding back digital transformation initiatives. (FinancesOnline)
- 87% of companies think digital will disrupt their industry, but only 44% are prepared for potential digital disruption. (Silicon Republic)
- Just 19% of companies have a customer experience team that helps bridge gaps in the business. (Genesys)
Digital Transformation can Fail
- 70% of digital transformations fail, most often due to resistance from employees. (McKinsey)
- Only 16% of employees in one survey said their company’s digital transformations have improved performance and are sustainable long term. (McKinsey)
- Seventy-two percent of strategists say their company’s digital efforts are missing revenue expectations. (Gartner)
Benefits of Outsourcing for Business
Outsourcing may be a topic you may not have thought about yet or you are uncertain about it. The benefit of outsourcing comes with numerous benefits. Outsourcing is a positive experience for most organizations.
With the following statistics, you will understand the importance of the outsourcing industry and its benefits to your business.
How big is the outsourcing industry?
- The global outsourcing market totaled $85.6 billion in 2018. (Statista)
- In 2019, the worldwide outsourcing market was worth $92.5 billion. (Statista)
- $66.5 billion was the global revenue of IT outsourcing in 2019. (Statista)
Benefits of outsourcing along with outsourcing facts
- There are several reasons to outsource including everything from 59% of people saying to reduce cost and 17% of respondents saying accelerating organizational transformation. (Deloitte)
- According to the survey, over 70% of technology employers in the UK expect to face a talent shortage over the next 12 months.
- Disruptive outsourcing, when executed well, will deliver a competitive advantage by transforming the way organisations operate, making them more agile, efficient, and effective. (Deloitte)
- Fewer than one-third of companies (29%) with 50 or fewer employees outsource, compared to 66% of those with 51 to 500 employees. (Clutch)
Why should companies outsource?
The above statistics show the scope of the outsourcing industry with both larger and smaller companies. And it benefits the company in numerous ways.
Outsourcing your products or services saves costs. When you work with an experienced company, the efficiency of building and delivering products is higher. You will stay ahead of the competition and capture the market with faster and better services. You will also have access to skilled human resources and new technology that would otherwise take years to build in-house.
Businesses potentially save by hiring remote workers. They do not have to hire new skilled workers and invest in new technologies periodically.
Why choose Leapfrog as an outsourcing company?
For the past 10 years, Leapfrog has been helping businesses create the digital experiences of tomorrow. We help businesses grow by blending the best of entrepreneurship, startup thinking, and world-class engineering.
“It would have taken months to build the product team that we inherited overnight with Leapfrog. They’re built for startup speed, and they have consistently delivered a well-engineered product for us. Laudio is my second partnership with Leapfrog, and they have earned my trust.”
- Russ Richmond, MD CEO, Laudio, Boston
You can work together with Leapfrog’s team in a way that works for your business. Choose the engagement model that makes sense for you:
- Build a new product with us
- Hire your dedicated team
- Augment your existing team
How can C-suite executives use these statistics?
Today it is more important than ever for the C-suite team to step up in the business transformation. Digital transformation changes the business culture, methods of designing and delivering products and services.
And it forces CEOs to rethink how companies execute, with new business processes, management practices, and information systems, as well as everything about the nature of customer relationships.They are most suited to anticipate any future disruption. (McKinsey)
Digital transformation statistics will help them understand the emerging trends in the market, customer expectations, and competition.
The Key Takeaway from these digital transformation statistics
You should start investing in digital transformation
The above stats show that implementing a digital transformation strategy is the topmost priority for every business organization.
Firstly the current market is changing, and during the wake of the Covid 19 pandemic, the need for digital transformation strategy is only increasing. Secondly, the demand for customers has increased too. They want the best result from your product and services. They seek the best customer experience from your company.
CIOs and other managers are expected to identify the strategy for their business and drive change. The statistics show that the need and investment for digital transformation are increasing. And it seems to increase swiftly in the coming years. Every business should adopt and implement a digital transformation strategy. This will help you to stay ahead of the competition and grow your business.
The benefits of digital transformation are Exponential
As the stats clearly show that you can reap benefits from digital transformation. The benefits of digital transformation are imminent. Digital Transformation helps businesses to communicate, collaborate, and deliver services more efficiently and effectively. With the help of digital transformation, companies can keep up with changes in the market and provide customer satisfaction along with an increase in profitability.
Digital Transformation helps employees by automating the tasks that required manual processes and were time-consuming. This helps people to focus on a wide range of opportunities and other important tasks. The use of digital technologies like AI, cloud computing, big data, automation will help business leaders to make better and faster decisions that result in progression.
Digital transformation helps to create a better customer experience
All these efforts lead to a better customer experience. Customer experience is an integral part of DX. One-third of customers would leave a brand after one bad experience. This tells that businesses should improve their customer experience.
As you proceed with the digital change within your company, you make the use of digital technologies. Digital technologies help you to provide customized services to each individual. This becomes possible with the help of customer data. Technology helps you to collect customer data and implement them to connect with the customer.
The digital transformation uses customer data to help your company anticipate what your customers need. It will help to improve the customer experience. Likewise, digital transformation helps your business to be close to your customers.
There are challenges in digital transformation
There are certain reasons that your digital transformation may fail. Digital Transformation requires changes in business models, operation processes, and culture. That statistics shows the employee challenge in the transformation process. Managers should also focus on engaging employees in the digital transformation of their company.
Technology is an important part of the transformation. But the executives may not be aware of the latest technologies, or they may not know the right way to implement it. Various factors like lack of proper planning, security concerns or insufficient budget may prevent companies from using the right technology. Altogether, businesses should rethink their operational processes to make them more efficient. They should also keep new innovative technologies and customer requirements in mind.
Businesses are also shorthand of skilled people to meet their digital strategies. They should train their employees to carry out the change process in the company. New skillsets and talented minds are required to handle the new innovative technologies and meet changing market demands.
When digital disruption occurs, businesses may not be ready because of which they may face difficulties. Businesses may adapt to new trends and technologies, but they do that based on their legacy culture. Similarly, they may also face cultural obstacles. Resistance to change occurs when employees are not clear about the change. Even if digital transformation is a familiar topic to many, constraints of legacy processes and cultural obstacles have held the companies back at certain times.
Business leaders should avoid digital transformation mistakes that are guaranteed to fail the progress.
Also, go through CEO’s Guide to Digital Transformation to get insights on how you as a CEO or business leader can successfully transform your business.
New technologies arise every day. It is getting harder to meet the ever-changing market demands. It is not too late to adapt and implement digital transformation strategies in your company.
To start with, the statistics and facts of digital transformation mentioned in this article will help you figure out the best practices for your digital transformation journey. Companies who embrace digital transformation and make fundamental shifts to enhance the customer journey will reap all the benefits.
Book a Free 30 minutes Consultation about how Leapfrog can help you bring digital transformation to your business.