Author: Constantin Măgdălina, Emergeing Trends & Technologies Expert
The plan to digitize a company must first exist, then be approved by leaders and implemented. The leaders of a company have the role of connectors between people and resource managers. If they decide that a project is suspended, then everything stops. Therefore it is important for leaders to understand the benefits of digitizing the company and the risks that arise if it does not digitize the company.
Relevant, from this point of view, are the general executives' responses to the digitization of their companies in 2017 and in 2018, collected by the Barometer of Digitization of Companies in Romania, conducted by consultancy Valoria. Thus, the study accurately identifies the angle of top management of companies in Romania regarding digitization.
Compared to 2017, when 30% of the decision-makers said their business was highly influenced by digitization, in 2018, 51% said this (+21pp). It is clear that top management is increasingly aware of the impact that digitization has on the company.
Compared to last year, in 2018, 48% to 51% (+3pp) increase, the confidence of CEOs to have the necessary knowledge at company level to capitalize on business digitization. Strengthening staff knowledge and clearer understanding of the relevance of digitization for the company also gave them a plus of 3 percentage points (pp) to leaders' confidence in their capabilities.
Next, there are increases (+9pp) on the extent to which new digital business models change industries. In 2017, 15% of executives said that digital business models changed the industry in which the companies they run. In 2018, the percentage reaches 26% of top managers who say the same thing.
Digital business tools, channels, and / or models are a key component of business strategy, with an increase of + 3pp between 2017 and 2018, while the top management's view of the big measure of digital business models will change their industry over the next 1-3 years it remains constant at 38% in 2017 and 2018.
In 2018, for 15% of respondents in leadership roles (+14pp), digital business models pose a threat to the company they run against only 1% of the same opinion in 2017.
Companies in Romania seem to take action on delegating the responsibility to a top management leader to digitize the business. Compared to last year, when 28% of companies said they gave this responsibility to a top manager, the percentage rose to 36% in 2018 (+ 10pp).
An important increase is also noted in the capitalization of digitization as a competitive advantage. Compared to last year, when only 42% of business leaders said they had capitalized on digitization to have a competitive advantage, in 2018, 63% of leaders made this statement (+ 21pp).
For top managers, the main obstacles to digital tranformation are resilience to change and the fact that their firms do not have digital consumers. The good news is that in both cases the percentages of these two obstacles decrease from 58% in 2017 to 42% in 2018 (-16pp). At the same time, the benefits of digitization seen by them include the simplification of processes, 53% in 2018 vs. 31% in 2017, and operational efficiency, 53% in 2918 vs. 36% in 2017.
Compared to 2017, when 27% of the CEOs said they expected a 10% -30% profit growth over the next 3 years as a result of digitization, this year 32% of respondents (+5pp) expect an increase in profit in this range.
For top management of Romanian companies, digitization is becoming increasingly concrete. Business leaders have begun to take action and connect digitization to business development. Appointing a senior top management responsible for digital business development is fueling expectations of profitability. Setting up clear directions for digital transformation and overcoming internal resilience will strengthen expertise and increase acceptance of this process at company level. The future is for leaders who change traditional into the digital business models.
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About Constantin Măgdălina
Constantin Măgdălina has 8 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 at the Academy of Economic Studies Bucharest. He is certified 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 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.