Member Article

Two thirds of businesses scrap digital transformation strategies in the face of Covid-19

New research of 750 business leaders and IT decision-makers internationally found that the vast majority of businesses are now consigning their business strategies to the dustbin to become more adaptable and more agile.

According to Fujitsu, technology has a significant part to play as businesses strive to keep pace with customer demands, with cloud and modern applications as critical to recovery plans.

The findings have emerged as part of a new report – Fragile to Agile – which found that two thirds (64%) of international leaders are prepared to scrap their current transformation strategies and replace them with something new entirely. As one of the economies most badly affected by the pandemic, UK & Ireland leaders are particularly feeling the heat, with 70% admitting they need a drastic overhaul.

It’s little wonder when the majority of business leaders surveyed (41%) said their customers’ needs alter weeks at a time and 41% also admit they’re unable to keep up with them.

Over three quarters (77%) of international leaders also agree they need to react faster when faced with market uncertainty and change, for instance competitor manoeuvres, technology disruption and uncertainty in the global supply chain. Leaders in the UK & Ireland are sensing this urgency even more (83%).

As to the challenges in delivering better customer experience and improving operational resilience, both organisational (30%) and technological complexity (28%) were named as top barriers to businesses moving faster internationally.

Brad Mallard, CTO for Digital Technology Services, North West Europe, Fujitsu, commented: “In what has been the most challenging time for enterprises in recent history, it’s no surprise that most organisations are struggling to keep pace with market demands and customer expectations. Whilst many have pivoted and changed the way they operate in response to immediate issues brought about by Covid-19, they now need to aggressively shift their focus – from reactively increasing resilience, to proactively building an adaptive organisation.

“This is validated by our research, with two-thirds of business leaders reporting that they are prepared to scrap their current transformation strategy and start afresh in order to succeed in the long-term. With the speed of change taking place across all industries, the ‘big-bang’ modernisation plans that businesses and governments have been trying to drive for some time are rapidly becoming unfit for purpose. A more flexible, iterative approach based on continuous improvement and delivery is now far more appropriate – and our customers are increasingly adopting this route forward, with our close support.”

Updating legacy technology is critical to overcoming this problem: moving to – and maximising – the cloud in particular. A significant 75% of international businesses see modernising their applications as a way of remaining relevant and competitive in the market and 74% view increasing cloud usage as vital for the same reasons. In fact, cloud platforms, cloud-hosted data and cloud-native applications are more important for customer experience than other emerging technologies such as IoT and AI:

• Cloud platforms (71%)
• Cloud-hosted data (69%)
• Cloud-native applications (68%)
• IoT and Edge solutions (57%)
• AI (56%)

Despite this, respondents report that currently only 46% of their business applications are in the cloud. They intend to increase this to just over half (53%) by the end of 2021 – an international trend which is reflected locally in the UK and Ireland.

What’s more, while cloud is seen as important to improving customer experience and aligning with business objectives, most leaders see it as a technology investment (54%) rather than a business one (46%) – further undermining its strategic value in helping companies to move quickly.

Tristan Rogers, Head of Strategy and Portfolio for Cloud and Application Services, North West Europe, Fujitsu said:

“For all the operational and technological initiatives that organisations could prioritise to increase adaptability, it’s clear that maximising cloud is seen as a big area of focus for 2021. However, despite business leaders reporting that cloud is vital for achieving priorities around improving customer experience in particular, our research findings show that investments in modern platforms and services are too often driven by technology objectives alone – and that implementations are rarely quick enough because of slow internal processes.

“Whilst harnessing the scale and flexibility of cloud will be important this year and beyond, organisations are also realising the importance of modern applications for remaining relevant and competitive, as well as the critical role that data can play in their survival and success. Organisations now need to move fast to ensure this thinking is applied in practice, as speed of delivery will be key to withstanding current uncertainty and powering future growth.”

This was posted in Bdaily's Members' News section by Fujitsu .