As EY experts write in the “Digital Transformation 2024” report made available to us, the stimulus to accelerate the digitization of processes in companies was the pandemic, which significantly changed the operating conditions of companies in 2020 and 2021.
“The Covid-19 pandemic has forced the world to reassess its existing business practices and significantly accelerated digital transformation. Companies have been forced to implement even basic technological solutions to ensure operational continuity and meet customer expectations, rising standards in quality and speed of service delivery,” the authors of the study write in their commentary, adding that the value of the digital transformation market in Europe in 2020-2022 increased by as much as 54% to almost USD 480 billion.
No longer “if?” but “how?”
Polish companies have also joined this trend. Transition to new technology has a high or very high priority among as many as 84 percent of Polish enterprises, and most of them allocate 4-10 percent of their annual revenues for this purpose.
As a result, more than half of the companies (64 percent) assess that they are already at a “high” or “very high” stage of advancement. According to EY, companies within digital transformation most often invest in cybersecuritywhich is the foundation of IT services, cloud solutions and training for employees in digital competences.
According to Mateusz Mazur, EY partner and leader of the digital engineering area, Polish companies no longer ask themselves the question “whether” to implement digital tools in their enterprises, but “how” to do it.
– The analysis of needs, selection of appropriate tools and measurement of effectiveness are at the forefront. This is perfectly illustrated by the process of implementing tools based on artificial intelligence. Although companies approach these solutions with enthusiasm, it is also accompanied by caution and the need to include these activities in a broader, business context – explains the expert.
Achieving financial goals in the red
Despite the large involvement of Polish enterprises in digital transformation companies admit that it has not brought the expected results in terms of both revenue growth and cost reduction. As many as 54% of surveyed companies stated that the assumptions regarding revenue growth resulting from digital transformation have not been met even by 35%. A high level of implementation of this goal – i.e. above 76% – is indicated by only 2% of companies, and as many as 17% assess that the goal has been achieved by no more than 10%.
In addition, 65% of companies surveyed by EY admitted that the degree of implementation of assumptions in terms of cost reduction also does not exceed 35%. In this case, only 3% of the surveyed companies indicate the level of implementation of the goal above 76%.
However, the study shows that financial issues are not the main reason why companies implement digital tools. In 2020, cost reduction was the third most important goal of digitalization for many companies, but in recent years we have observed a significant change in attitude and expected results, and the priority is now profit in the form of increased development opportunities. The key motivation for Polish companies to implement the transformation is company development (49%) and customer expectations (38%).
Company development is the main benefit
And what effects has digitalization actually brought to companies? As it turns out, the most common benefit is the automation and digitalization of internal processes or communication (49 percent), which allows for increased work efficiency, reduced operating costs and the elimination of manual errors. Other more common benefits include improved customer service quality (48 percent) and the use of innovative solutions (43 percent).
Mazur, an EY expert, emphasizes that the current technological potential goes beyond the standard support of business operations, and the use of cloud computing, predictive systems and artificial intelligence opens up new development opportunities for businesses.
– From the conversations and joint projects that we conduct with our clients, it follows that the scalability and expansion of business, which is part of the strategy of many companies, would not be possible without the use of technology. However, the key challenge remains the selection of tools and investments in digital capabilities to most effectively meet business ambitions – says Mazur.