A global research in the digital transformation journey of 4,000 businesses in various industries in 16 countries, found that 78 per cent of companies believe digital start-ups pose a threat to their organization either today or in the future. Almost than half (45 per cent) of the global businesses surveyed fear they may become obsolete in the next three years because of competition from digital start-ups, according to the research conducted by independent survey firm Vanson Bourne for Dell Technologies.
More than 58 per cent of business leaders have experienced significant disruption over the past four years as a result of digital technologies and the Internet of Things. But it is also telling of businesses’ grasp of their environment that 48 per cent of the respondents admitted they don’t know what their industry will look like in three years. Only six in ten companies are able to meet their customers’ top demands, such as security, and faster 24/7 access to service and information.
“So far the fourth industrial revolution has proved as ruthless as its predecessor,” said Jeremy Burton, chief marketing officer of Dell Technologies. “If companies can’t keep up, they will fall behind…or worse.”
He said the research found that many companies are sluggish in reacting to changes within their markets and slow in churning out new products in services.
“The ‘delay until another day’ approach simply won’t work,” said Burton.
Disruption is slower in Canada, but
Compared to the global trend, the pace of digital disruption in Canada is slower, but that’s little comfort, according to Carolyn Rollins, director of Canada and U.S. inside led commercial marketing for Dell.
For one, she said, the survey found that Canada ranked pretty low in the lineup of digitally mature countries. Canada sits on number 13, among 16 countries surveyed.
Only 35 per cent of Canadians firms experienced significant disruption over the last three years, compared to 52 per cent of global companies. Only 48 per cent of Canadian firms saw new competitors emerge, compared to 62 per cent of global firms.
“It seems Canadian firms are in a stable position within our borders,” Rollins said. “But out there it’s a different world.”
She explained that less disruption may have led many Canadian companies to feel less compelled to speed up their digital transformation.
For example, survey results showed that:
- 72 per cent of Canadian firms admitted to not acting on digital intelligence in real-time. Only 64 per cent of global firms admitted to doing the same.
- 21 per cent of Canadian firms said they innovated in an agile way. Slightly more, 28 per cent, of global firms said they innovated in an agile way.
Rollins said Canadian firms appear to be operating at a “higher comfort level” than their global counterparts.
But she said there could also be other reasons why local companies do not appear to be more gung-ho in competing internationally.
“It’s possible that existing tax regimes are challenging and not encouraging businesses to compete abroad,” Rollins said.
“Many of our businesses are also mid-sized and may not have the partners or resources needed to develop or access new tools that will help them compete,” she added.
Rollins said this is where companies like Dell can help Canadian business. She said Dell has the expertise and tools to help businesses in the digital transformation journey.
Digital maturity and a digital rescue plan
Companies that are higher up in the digital maturity scale are lease likely to be vulnerable to disruption from start-ups, according to Rollins.
The survey showed that most digitally mature businesses were in the telecom, media, and retail sectors.
The lease digitally mature businesses could be found in the retail, private health, public health, and insurance spaces.
The survey also mapped out some of the technologies the companies believed they should be investing in.
In order of priority, the top planned IT investments of the surveyed businesses over the next three years were:
- Converged infrastructure
- Ultra-high performance technologies (such as Flash)
- Analytics, big data and data processing (such as data lakes)
- Internet of Things
In order to catch up with technology trends, companies are also trying out a number of strategies.
As many as 35 per cent of businesses are partnering with start-up to adopt and open innovation model, 28 per cent have spun-off a separate part of the organization or intend to acquire the skills and innovation they need, and 46 per cent are integrating digital goals into all department and staff objectives.
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