Digital Transformation Is Linked to Financial Performance
Most companies today are well underway with digital transformation projects, with the average company roughly 70 percent through the process, industry analyst firm Valoir found in a survey of 1,400 companies worldwide. The research also found a clear correlation between digital transformation and financial performance, as companies further along with digital transformation achieve nearly twice the revenue growth of those lagging behind.
The survey assessed businesses on a scale of one to 10, where one signified companies that have not yet started digital transformation and 10 represents those that are complete. Companies scoring eight or higher showed roughly twice the revenue growth compared to companies scoring three or less.
"There's a lot of talk about digital transformation, but many companies have been challenged to assess the value of their efforts," says Rebecca Wettemann, CEO of Valoir. "We found that advancing digital transformation drives both revenue and margin improvements by improving efficiency and delivering better customer and employee experiences."
The report also found that human resources departments lag behind other departments, such as customer service, marketing, IT, and operations, in their digital transformation. In fact, fewer than 20 percent of companies surveyed have adopted modern, digital HR capabilities in key areas such as reskilling and coaching, mentoring and training, and real-time analytics.
"Despite all the recent hype around employee experience, clearly companies have prioritized digital transformation efforts on customer experience and other areas. Given the Great Resignation, attracting and retaining talent has become a top priority. Digital transformation is crucial for improving the employee experience in today's hybrid workforce," Wettemann explains.
The study also found that healthcare, financial services, and high tech are the most advanced industries from a digital transformation perspective. The public sector, utilities, and consumer goods lag behind.
Regionally, the survey found that North America and Latin America are ahead of other regions when it comes to digital transformation.