Do digital disrupters cash bigger business cheques?
- 03 November, 2015 05:59
Digital disrupters have two times higher revenue growth and two and a half times higher profit growth than the mainstream organisations, according to new industry findings.
A recent CA Technologies study claims it’s clear that digital transformation has reached every aspect of business.
Put simply, exploiting modern technology and communications to transform one or more key aspects of your business to achieve a state of digital readiness has now become a mainstream activity to drive ROI.
In the application economy, businesses are moving at the speed of light to leapfrog their competition and accelerate the digital transformation of their organisation.
The study, Exploiting the Software Advantage: Lessons from Digital Disrupters, found that Digital Transformation is being driven as a coordinated strategy across a majority of organisations (55 percent), with many projects underway in multiple areas of the company, including customer services, sales and marketing, and product/service development.
As a result, 45 percent of respondents have already seen measurable increases in customer retention and acquisition from their digital transformation initiatives and 44 percent have seen an overall increase in revenue.
The results also spurred the development of the Digital Effectiveness Index (DEI), a measurement tool developed in partnership with Freeform Dynamics.
Using this measure, a group of top-performing organisations has emerged - the digital disrupters, identified as the top 14 percent of respondents.
“Not all businesses are on equal footing - some are forging ahead, some are getting left behind,” says Otto Berkes, CTO, CA Technologies.
“In fact, there are some wide differences in overall effectiveness and maturity of digital initiatives - from significant revenue growth and customer retention to ultimately profits impacting the bottom line.”
In this elite group of digital disrupters, or those well on their way, Berkes claims respondents are already seeing better benefits of embarking on a digital transition.
According to Berkes, these include increased revenue with digital disrupters having two times higher revenue growth than mainstream organisations as well as higher profits, with businesses reporting two and a half times higher profit growth than the mainstream organisations.
“While there are already successful companies who have become digital disrupters, mainstream businesses simply cannot continue with the status quo - they must undergo significant change to fully integrate digital into all aspects of their business,” Berkes adds.
However, the good news for these businesses, according to Berkes, is that there is a “clear set of common traits” and behaviours among today’s digital disrupters.
The study, which surveyed 1,442 respondents from 16 countries across nine industry sectors, found that digital disrupters are:
- Software-driven: Digital Disrupters were 3.5x more likely (than the mainstream) to recognise the importance of being a software-driven business (60 percent vs 17 percent).
- Advocates for Agile: Disrupters were 2.5x more likely to fully use agile development (77 percent vs 31 percent), and in addition- 2.5x more likely to have DevOps broadly in place (70 percent vs 28 percent).
- Open to APIs: The study found that leaders were 2x more likely to leverage APIs for internal development (68 percent vs 34 percent), and 2.8x more likely to use APIs to enable third party apps (66 percent vs 24 percent).