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Creating exceptional customer experiences by 'doing it better'
Creating exceptional customer experiences by 'doing it better'
Optimise your customer experience by designing, deploying and managing digital solutions customised to your unique needs.
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There is an old saying in business that if you are not moving forward, you are standing still and nowhere is that more relevant than when it comes to digital innovation. The past decade has seen rapid-fire evolution in the technological space, so much so that a new business strategy has grown out of the need for organisations to leverage solutions and tools that improve business processes and deliver customer value.
That strategy? Digital transformation.
Make no mistake – businesses that fail to embrace digital transformation are putting themselves at risk of failing to keep pace with their competitors. One need only look at how the world’s leading companies are using new technologies to reinvent how they do business to appreciate its power.
Take global sportswear leader Nike, which has changed its entire approach to branding, sales and technology1. A concerted effort to become a direct-to-consumer brand has seen a reduction in retail partnerships in favour of multiple online sales channels, while programs such as Nike Training Club2 are allowing it to collect and analyse rich consumer data.
If any company could be forgiven for resting on its laurels it would be Nike but by refusing to simply do what it has always done and instead launching its own digital efforts to meet specific needs3, it continues to dominate the sports brand world more than 50 years after it emerged out of the US state of Oregon.
The good news is that an organisation does not need the billion-dollar resources of Nike to develop and deploy a successful digital transformation strategy. One of the advantages of a global boom in technological development is there are endless solutions, concepts and theories that can be embraced or adapted by businesses of all shapes and sizes.
And for those executives and business leaders still debating the need to devote resources to the field, there are countless facts and figures that reinforce why it is crucial for short and long term success and the good news is we have compiled dozens of them into this definitive list of digital transformation statistics.
Digital transformation investment
Befitting a strategy that is revolutionising how businesses do business, there has been massive growth in investment in digital transformation during the past few years and that does not look like changing any time soon. Global spending in the field is tipped to double in the next four years and create over $100 trillion in benefits and value.
- Global spending on digital transformation reached $1.8 trillion in 2022 and is expected to increase to $2.8 trillion by 20254
- The worldwide digital transformation market was valued at $998.99 billion in 2020 and forecasts an increase to $2,744.68 billion by 2026, a CAGR of 17.42%5
- The World Economic Forum believes the societal and industrial value of digital transformation could reach $100 trillion by 20256.
Source: Digital Transformation Market Analysis, Trends & Growth by 2030 (databridgemarketresearch.com)
Data capture
Data is fast becoming the foundation of digital transformation. While investment in practical solutions such as portals and apps are important, there is an increasing amount of work being done to underpin what is done from a technology and change perspective including creating a solid data layer that connects businesses and customers7. It is all about gaining insights into how customers are buying, what they are buying, their customer experience and the role technologies can play in helping organisations connect with them8.
- 63% of retailers expect to spend more on data analytics and business intelligence9
- More than a third of CIOs anticipate difficulty finding appropriate skill sets in data science10
- Workers with data science skills are preferred by 69% of employers11
- Forrester has found 65% of companies encourage collaboration between the business and analytics and data science teams12
- The worldwide data analytics outsourcing market is tipped to reach $20.68 billion by 202613
- 72% of data and analytics leaders are either leading or heavily involved in their organisation’s digital transformation14.
Artificial intelligence
No modern digital transformation strategy is complete without factoring in how to create organisational learning and pathways towards an AI-enabled enterprise. Artificial intelligence is one of the most exciting technological innovations but it is also critical not to lose sight of the customer in that mission. It is easy to do AI or automation for its own sake but as Microsoft CEO Satya Nadella recently said: “We’re moving from the autopilot era of AI to the copilot era.”15 Artificial intelligence and automation are clearly powerful tools but there is a need to combine such tools with human ingenuity to realise their maximum potential.
- The AI market is expected to reach $407 billion by 202716
- 35% of companies are using AI and 42% of companies are exploring AI options for the future17
- Customer satisfaction is expected to grow by 25% for organisations that use AI18
- The number of businesses that use AI soared by 300% in the past five years19
- Netflix saves $1 billion each year by using automated personalised recommendations20
- Two-thirds of consumers are open to AI enhancing customer engagement21.
Importance of efficiency
When rolling out a digital transformation strategy, it is essential to ensure that efficiency remains the end game. There are many benefits to be gained by embracing digital innovation but one of the best predictors of Net Promoter Score (NPS) success is efficiency. Take an example of a contact centre agent in a telecommunications call centre - in a case where the agent may not be the most personable of people but is able to reconnect an internet fault immediately - customers will be content and generally report a high NPS score. It is all about efficiency and when it comes to digital transformation, that means connecting systems to make it as easy as possible for customers to do business.
- A Fujitsu study found improved efficiency is the second highest driver for companies embracing digital transformation (69%), only trailing ‘strengthened competitiveness (70%)22
- The top benefits of adopting a digital model are improving operational efficiency (40%), being faster to market (36%) and helping meet customer expectations (35%)23
- 69% of IT decision-makers primarily view digital transformation as a way to improve process efficiency24
- IBM research found 95% of Chief Supply Chain Officers believe digital transformation in supply chains leads to higher efficiency in tackling challenges25
- Gartner predicts organisations with customer service channels that properly embed AI will boost operational efficiency by 25%26.
Digital transformation failure
Just as there are significant benefits to be realised from a successful digital transformation program, a flawed strategy can be disastrous. Amid the myriad of statistics about the power of technological innovation, there is overwhelming evidence that the vast majority of digital transformations fail as naïve or ill-equipped businesses struggle with how to build capabilities. Quality research, gaining executive buy-in and working with trusted tech partners are just a few ways to avoid adding to statistics such as the following.
- Forbes says the digital transformation failure rate is as high as 84%27
- McKinsey has found 70% of digital transformations fail due to employee resistance28
- 75% of executives say their business functions compete instead of collaborating on digital projects29
- 28% of companies consider digital transformation as a cost centre, while resistance to change (26%) and compliance or legal concerns (26%) are also barriers to success30
- Organisations with 100 or fewer employees are 2.7 times more likely to succeed in digital transformation than companies with 50,000 or more employees31
- A study of IT professionals found a lack of IT skills or transformation expertise is the biggest hurdle to digital transformation success (54%), followed by dependency on legacy systems (53%)32.
Summary
While some business trends come and go, the digital transformation revolution is only gathering momentum. In an ideal world, organisations will have already commenced their journey and be heavily invested in developing, deploying and maintaining tools and solutions that are delivering wins for their employees, customers and bottom lines. For those that find themselves behind the eight-ball, the good news is it is never too late to create a better tomorrow and the first step should be teaming with a CX partner that not only knows the power of digital transformation but has the people to deliver it.
Generative AI has the potential to change the customer experience game but businesses need to do their research before rushing to implementation. Tap into a handy guide that shines light on the ground-breaking technology, explores the subset of Large Language Models and reinforces how they are inspiring a customer service revolution.
