Digitale Transformation

Digitization? I don't have time to figure it out!

Decision-makers in many companies understand that digitization is important. But one study says that most don't have the time or the right expertise for it.

13 Jun. 2016 Lisa Hegemann

Digital strategy lacks both knowledge and time

Companies have understood that they have to take digitization seriously. The key goal for nine out of ten of them is to secure their businesses for the future, as described by the non-representative Transformationswerk Report 2016. But just because this understanding has reached the executive suites doesn't mean that they have already worked out suitable goals. On the contrary: only 49 percent of companies have developed a master plan for the digital transformation. Which means one out of every two has no digital strategy in place.

What companies are lacking by their own report: knowledge and time. One out of every four admits that they simply don't have the knowledge they need for the digital transformation. And 71 percent of those surveyed cited a lack of time as a factor. The study's authors, Willms Buhse and Ingo Stoll, find this alarming. "It shows these companies' cluelessness," said Stoll in an interview with t3n.de. Because if the firms really knew what they have to do, they would be looking for a bigger budget and really knew what they have to do, they would be looking for a bigger budget and more staff, says the CEO of the Hannover-based agency Neuwaerts, a regular CeBIT exhibitor every year.

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(Illustration: Transformationswerk Report 2016)

The problem is that management sees themselves as being much further along than their employees' responses would indicate. Thus, 44 percent of executive leaders declare themselves to be digitally competent, while only 14 percent of employees say this about their bosses. This exaggerated self-image is apparent across the entire study. Opinions can also vary widely about the degree of existing digitization, with 31 percent of managers believing their company is on a good digital path, while only 20 percent of employees concur.

This distorted self-awareness at the executive level is also apparent in other areas. For example, management sees itself as the most important transformation driver 73 percent of the time. Only 58 percent of employees say the same of their leaders, while 60 percent view digitization as more of a cross-company project. At the same time, 74 percent of managers believe they involve their employees in the transformation. But the latter see things very differently: only one out of every two feels truly involved.

IT will pull it off

"Management overstates its abilities, because it hasn't yet understood how digitization really works," says study author Buhse. Leaders still too often turn to the IT department and assume that it will manage. The study confirms this misunderstanding: 43 percent of IT workers view themselves as digitally competent – while those outside the department offer the same assessment 46 percent of the time. "And digitization is not just an issue of infrastructures,”" says the DoubleYuu CEO.

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Executive management see themselves as far more digitally savvy than their employees view them. (Illustration: Transformationswerk Report 2016)

Many companies are also lacking suitable products. Only 42 percent report having digital solutions in their portfolio. "These figures should be taken as a warning," caution the study's authors. And the level of innovation of those offers that do exist can't be measured. There is little evidence so far of the competitive capacity of many of these products.

The authors' conclusion: "Companies have understood the importance of digitization, but not the urgency," says Buhse. The two authors of the study also see issues arising from the structures of the companies. "Alternative ways of thinking don't come up in traditional management school," points out Stoll. But traditional thinking only produces traditional solutions. He recommends: "Managers should really do internships in startups, to get themselves out of their own boxes and find the courage to try doing things differently."

Around 1,000 people were surveyed between February and May 2016 for the Transformationswerk Report 2016. Of these, 32 percent were from management, the rest were employees in the IT or HR areas. The report was published with the cooperation of the Neuwaerts agency and DoubleYuu management consultancy.

Even if this online survey is not representative, it does provide hints as to why digitization has still not taken off in many large, medium-sized and small businesses.

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