Companies Anticipate Need for Massive Change to Win in Digital Economy

A new report released today by Harvard Business Review Analytic Services in association with DXC Technology, the world’s leading independent, end-to-end IT services company, reveals that companies expect pressures from digital technology disruption to accelerate and intensify, yet worry that organizational inertia and resistance to change will hold them back.

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The report, “Winning Through Change in the Digital Economy,” examines the attitudes and expectations of nearly 400 business leaders surveyed worldwide from a variety of industries. The report details the digital readiness of the respondents’ organizations and offers guidance on how to embrace the digital opportunity in all industries.

Survey results show that many organizations are struggling with their digital initiatives — approximately one-third (32 percent) of business leaders say that their organizations are not very digital, meaning less than a quarter of their products, operations and business models depend on their ability to exploit digital information and technologies.

Seventy-nine percent of survey respondents also indicate that their organizations will undergo extensive or substantial change to become more digital over the next five years. However, only a small percentage (7 percent) felt their organizations are extremely open to change, with more than one-third (35 percent) indicating their organizations are somewhat open to change.

“The findings from this survey underscore the importance of modern technology and broad organizational change in driving digital transformation,” said Dan Hushon, senior vice president and chief technology officer, DXC Technology. “The results are consistent with DXC’s goal to help clients progress on their transformation journeys. Digital leaders understand the need to bring together experts with deep industry knowledge, analytics and creative skills, policy knowledge, and the ability to solve problems differently and with scale.”

Embracing the Change to Digital

To create a change-embracing organization or culture, more than half of respondents (53 percent) believe that communication from leadership about the need for change is the most important factor. Additionally:

  • Business leaders expect the pressure for massive change resulting from “digital” to accelerate and intensify in the next five years. To keep pace, most companies surveyed (89 percent) are creating new organizational structures and teams to support digital operations and business models, with more than a fifth (22 percent) doing so to a great extent rather than just in pockets of the organization.
  • As organizations develop new business models for the digital economy, they need their suppliers to provide a different level of support. Thus, the partner model isn’t future-proofed. Close to half of business leaders (46 percent) say they need to make significant changes to their partner portfolios.
  • More than half (55 percent) of the very digital companies say they have experienced a significant financial lift from their digital efforts, compared with only 20 percent of moderately digital organizations and just 6 percent of the not-very-digital.

“Successful companies are taking a test-and-learn approach to their organizational structures, as well as to their product design,” said Alex Clemente, managing director of Harvard Business Review Analytic Services. “Digital demands new skills, aptitudes, and ways of working, which requires a greater investment in employee support and culture change. This study offers guidance for business and technology leaders in all industries looking to survive and thrive in an increasingly digital world.”

“Our clients are at the forefront of successfully bridging the gap between the old and new way of doing business in the enterprise,” Hushon said. “By reinventing operational processes, turning business models upside down and delivering innovative and personalized experiences to their customers, they will continue to grow their business and drive a competitive advantage.”

Today’s technology disruption is immediately global and much faster moving than previous technology disruptions. As outlined in this study, organizations that succeed will be able to thrive on accelerated change and sustain that momentum over time.