Just under a half (42%) of all UK businesses have cancelled at least one digital transformation project, with each scrapped project costing on average nearly £500,000 – a significant cost burden for any company.
While 41% have completed some digital projects and 79% are prepared to change their business models to meet customer demands, the high cost of failure is putting nearly three quarters (69%) of organisations off further digital transformation.
The findings come from a new global study by Fujitsu, which gathered data from 1,625 business decision workers at companies with at least 50 employees.
A lack of the right skills was a major contributing factor, rather than technology and culture, was cited as the main contributory factor to failed digital projects.
Seven out of 10 (70%) respondents stated that there is a clear lack of digital skills in their organisation as it stands today. As a result, a massive 90% are currently taking measures to try and increase their access to digital skills and expertise, both within and outside their organisation.
Skills relating to artificial intelligence (AI) were identified as being a particular requirement. According to the study, AI is considered to be vital to the financial and operational success for 56% and 53% of respondents’ businesses, respectively.
As a result, a clear majority (83%) believe that AI will revolutionise the types of skills required in their organisation by 2020. Nearly nine out of 10 (87%) of respondents said that bringing ‘digitally native’ staff into their organisation would play a key role in their success over the next three years.
The good news is that organisations are finally understanding that it is the customer – over any other factor – that is driving the need for digital transformation. More than half (58%) of respondents cited customers as the main driver for digitalisation, followed by competitors (44%), partners and third parties (31%) and new entrants into the sector (26%).
This focus on the customer represents a significant increase from 2016’s study (in which only 45% cited the customer as having the greatest influence on digital strategy).
“Not only are organisations now progressing at pace with digital transformation, they are doing so with a keener understanding than ever of how those projects need to fulfil customer expectations and enhance the customer experience,” says the report.
This realisation is something that the telco industry would do well to absorb. Poor customer service is regularly cited as the ‘Achilles heel’ of operators.
Building digital transformation projects on the foundation of customer demand and customer experience indicates a way forward for an industry that is under fire from many sides, including technological disruption, uncertainty around business models particularly in a 5G environment, and competition from agile and innovative new entrants.
People, skills, collaboration and partnership, and a sharp focus on the customer, together provide a solid foundation for the digital projects that will transform and prepare our industry for the challenges ahead.