Author: Constantin Măgdălina, Emerging Trends and Technologies Expert

With the pandemic, digitalization has become a more current topic than ever. Top managers from more "extroverted" industry sectors such as the services sector, but also more "introverted" sectors such as industrial production talk about the need for digitalization.

Constrained by a brutal reality, the companies of each industry sector or activity have turned to digitalization. The Barometer of digitalization in Romania 2020 by Valoria is a unique survey that captures this reality. From the findings of this survey we find out what that companies in the major industries say about digitization.

Confidence in digitalization

If 70% of Telecommunications companies, 65% of Media and Advertising and 64% of IT say that digitalization has had a great influence on them so far. At the same time, 34% of Agriculture and Food companies, 33% of Industrial Production, 32% from the Chemical Industry and 31% Construction and Real Estate say they are only somewhat confident that they will capitalize on this digitalization trend.

Digital business models

70% of the Telecommunications companies, 58% of the IT companies and 42% of those in the Financial-Banking Services industry say that the digital business models have greatly changed the industries they belong to. On the other hand, 67% of Tourism companies, 65% of IT and 64% of Telecommunications expect that digital business models will greatly transform the industry they belong to in the next 1-3 years. The percentage of companies in the top 3 industries that consider digital models business threat decreases from 54% in Financial-Banking Services, to 45% in Commerce and 35% in Tourism.

Digitalization strategy

Not surprisingly, 62% of Construction and Real Estate companies and 56% of Industrial Production companies have not made digitalization the central part of their business strategy, but it is different when you find out that 53% of the Pharmaceutical and Healthcare companies are at this stage. In 2020, 50% of Industrial Production companies, 48% of Tourism companies and 45% of Energy and Utilities companies do not have a top management leader appointed to manage digital development. This year, 76% of Tourism companies, 75% of Agriculture and Food and 71% of the Chemical Industry say that they do not have such expertise at the management level, but they give priority to consolidate it.

Digitalization as a competitive advantage

Unfortunately, 47% of Industrial Production companies, 38% of Construction and Real Estate, 36% of the Chemical Industry and 35% of Commerce believe that they will not change in the next 3-5 years due to digitalization. In 2020, 91% of the Telecommunications companies, 88% of the IT and 46% of the Pharmaceutical and Health Industry say that they have competitors greatly affected by digitalization. 84% of the IT companies, 72% of the Telecommunications and 68% of the Financial-Banking Services say, in 2020, that they capitalized on digitalization on time and turned it into a competitive advantage.

Obstacles& benefits of digitalization

For 45% of R&D companies, 41% of Tourism and 31% of Agriculture and Food, but also of Financial-Banking Services, the perception of excessive costs is the main obstacle to digitalization. In 2020, 80% of Transport companies, 78% from Construction and Real Estate and 77% from IT put in the first place the simplification of processes in the next 5 years, as the main benefit of digitalization. 46% of Media and Advertising companies, 45% of Tourism and 42% of Construction and Real Estate say they will adopt intelligent operational management systems in the next 5 years which will result in a 10% increase in revenue.

The impact of digitalization

In 2020, 33% of IT companies, 21% of Tourism and 19% of Media and Advertising say that digitalization will increase their turnover by over 30% in the next 3 years.72% of companies in Financial-Banking Services, 57 % of Tourism and 33% of the Pharmaceutical and Health Industry say that digitalization will increase their profit margin by over 30% in the next 3 years. This year, 39% of companies in the Pharmaceutical and Health Industry say that digitalization will reduce them the number of employees by 1%-5% in the next 3 years, and 21% of Tourism companies expect decreases of 5%-10%. In 2020, 50% of Energy and Utility companies and as many of those in Telecommunications say that digitalization will contribute to the market value of the company by 10%-20%.

Artificial Intelligence and RPA

In 2020, 35% of companies in the field of Financial-Banking Services, 27% in Media and Advertising and 23% in IT say they have a clear strategy for including AI in the company's business capabilities. In 2020, 41% of companies in the field of Financial-Banking Services, 34% of Telecommunications and 31% of Commerce say they currently use RPA. In 2020, 28% of Energy and Utilities companies, 27% of Financial-Banking Services and 27% of Professional Services say that they use the most RPA in budgeting and analysis processes.

Conclusion

In connection with digitalization, every company sometimes expresses its interest and confidence, sometimes its concern and pessimism, but none remains indifferent to this trend. Asked about the above, the companies answered from their perspective and the perspective of the industry they represent.

Digital transformation requires systemic changes in business processes, business models and economic relations at company and industry level. The blending of advanced technologies that integrate physical and digital systems, when combined with business and industry models and business processes, leads to the creation of intelligent products, services, and increased productivity. Valoria’s shows that in 2020, in many industries, digitalization is rather at the level of intention.

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About ConstantinMăgdălina

ConstantinMăgdălina has 10 years of working experience, while he performed in multinationals both in Romania and abroad. Constantin has a master’s degree in Marketing and Business Communication from the Academy of Economic Studies Bucharest. He is certified in 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 of 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. He is the author of numerous articles on topics related to innovation, the efficiency of business processes, social media, the consumers’ buying experience in the age of digital, trends and emergent technologies. He is invited as a speaker at numerous events and business conferences.