When it comes to building a digital strategy, many CEOs talk a good game but are not delivering the goods. That's one of the key findings of a recent report by consulting firm PwC.
The firm surveyed 2,280 business and technology executives worldwide from January through March 2018, and found that about three-quarters of the respondents said their CEO is a champion for digital. But only 44 percent think their companies actually integrate digital strategy into corporate strategy.
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Furthermore, only 43 percent of the respondents said their leaders are digitally savvy and help the workforce think in new ways.
The definition of "digital" continues to evolve, the report said, with more executives embracing broader, more holistic definitions. About one-quarter of respondents said digital is synonymous with IT, which the study said is the least progressive view. This number was 29 percent in a similar survey PwC conducted in 2016.
Another 29 percent said digital refers to all investments being made to integrate technology into their business. Only 14 percent said this in 2016. And 21 percent said digital goes beyond technology alone to reflect a mindset that reflects innovation and flat decision-making. Only 6 percent provided this definition in 2016.
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Strategic digital transformation is being driven by external and internal pressure, according to the report. Nearly 40 percent of respondents said the pressure from competitors was the most important reason why they needed to make strategic moves, while 38 percent said it was due to technical maturity and 23 percent said market intelligence influenced their digital thinking.
Acquiring the proper technical skills remains one of the biggest challenges of digital transformation. The top three reasons executives said they could not "upskill" their workforce was lack of time, lack of structure for delivering training, and lack of institutional knowledge. Fewer cited a lack of budget as a barrier.
Top financial performers -- defined as companies that have shown revenue growth and profit margin increases of 5 percent or more over the past three years and expected revenue growth of 5 percent or more over the next three years -- stand out from their less successful peers on key digital behaviors, actions, and mindsets, according to the study.
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For example, they invest in digital solutions at a rate much higher than their peers. Two-thirds spend 10.1 percent or more of revenue on digital, compared with 26 percent of their peers. The investments are paying off, with 71 percent saying they're helping improve talent retention and recruitment, compared with 26 percent of their less-financially successful peers.
A large majority (86 percent) said such investment has enhanced brand and reputation, compared with 31 percent of others; and 68 percent said it has resulted in better decision making using data, compared with 41 percent of others. About two-thirds said it is creating better customer experiences, compared with 28 percent of others.
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