Just 15% of businesses that have embarked on a digital transformation project have seen it through to completion, new research shows.
The report from Panasonic Connect Europe is called ‘Breaking Down the Barriers to Digital Transformation’. Panasonic Connect specialises in rugged mobile tools, digital content systems, restaurant technology and industrial equipment.
Its report shows that European business leaders understand that technology and digital transformation is the key to boosting productivity across their businesses.
It also reveals that business leaders predict an average productivity boost from digitalisation of 39% within three years, and ROI of just under five years. And yet at the same time, Panasonic found that just 15% of businesses have completed their transformation project.
Almost 40% of respondents also said they felt their organisation was lagging behind competitors on digital transformation.
Lack of IT personnel a barrier to digital transformation
The major barriers to progress are listed as: Lack of internal knowledge (35%), lack of internal IT people resource and skills (32%), concerns about the interoperability with existing IT infrastructure (30%) and a lack of external specialist IT support or awareness of specialist providers (30%).
“This research shows that European businesses understand that the latest technology solutions can transform their business operations and help them take major strides forward in productivity but for many there are still obvious barriers to overcome,” said Jan Kaempfer, Marketing Director for Panasonic Connect Europe.
He added: “Businesses have a lack of internal expertise and resources and are struggling to find the external specialist support they need to execute their plans.
“This was precisely the reason why Panasonic Connect Europe was formed just over a year ago, to bring technology hardware, software solutions and service expertise together to help business-to-business organisations address their digital transformation challenges."
Panasonic's findings echo those of similar reports, showing that many digital transformations hit the buffers before completion.
Behavioural scientist, academic and procurement leader David Loseby knows more than most about the challenges business face in seeing digital transformations through to completion.
In an interview with Supply Chain Magazine, Loseby said: “Most digital implementations have a success rate of about 30-40%, in terms of adoption."
Mindset failure a problem for digital transformations
He added that the failure rate is so high because of a “mindset failure” on the part of organisations.
He says: “Digital transformations are not technology-change projects. They are people-change projects. If you don't involve the people that are going to be impacted, and suddenly impose it upon them, guess what? You get lots of rejection.”
For Loseby, re-skilling employees and clearly demarcating their changing roles is an inviolable step in any technology change project.
He warns: “You’re pulling them into the fear of the unknown. You’ve got to balance the equation by making sure there’s something in the change process for them. If I’m an employee and you want me to give you my heart and soul, my knowledge and IP, then don’t leave me fearing I might be shunted somewhere else at the end of it all.”
Loseby stresses that the common thread running through successful digital transformations is the people-centred nature of such processes, as opposed to being tool-centred. To work, he says that AI and ML programmes must be mindful of all stakeholders – staff, suppliers and also customers.
- Exclusive Video: P&SC LIVE - The Digital Supply Chain ForumDigital Supply Chain
- Exclusive Video: People Centric Transformation - P&SC LIVEOperations
- Deloitte: Supply Chain Predictions 2024 in TMTTechnology
- Exclusive Video: P&SC LIVE - Supply Chain Risk & ResilienceSupply Chain Risk Management