Digital is becoming increasingly disruptive as legal firms create virtual teams to meet new customer demands, retailers like Argos overhaul their business models to better serve their digital customers, and travel firms like Virgin Holidays are creating superior website experiences to advertise to and engage their customers. But many firms are struggling to keep up with the pace of change, according to a new survey.
The study, from Canopy, finds that 75% of CFOs think their business is missing out on revenue opportunities by not having the right cloud applications and infrastructure in place to support digital business transformation.
As a result, 70% of CIOs and CFOs fear their business will become uncompetitive with the majority (76%) of them estimating this will happen as fast as the end of 2015.
The term ‘Digital Transformation’ refers to the changes associated with the application and use of digital technologies to enable new and improved ways of working, improved customer service and operational processes, new types of innovation and creativity and improved workforce efficiency.
CFOs think their business missed out on an average €67m of revenue last year due to not having the right cloud solutions in place to support their digital transformation – the process of radically improving their performance through digital technology to adeptly serve a new class of ultra-connected customer. CFOs estimated that if enhanced cloud capabilities were in place in their company, double digit growth could be achieved in 2015 with an average €123m revenue boost.
Canopy’s research conducted by Vanson Bourne, surveyed 950 CIOs, CFOs and business decision makers (BDMs) in mid-market and enterprise firms in the UK, US, Germany, France and the Netherlands. The findings show that digital transformation is touching all aspects of organizations from customer service, sales and business development through to innovation, product development and talent attraction.
Jacques Pommeraud, CEO of, Canopy said: “As our survey highlights, digital must be in the DNA of every department to help the business take market share and maximize revenue. From hospitality and retail through to manufacturing, we see that those who are emerging as winners are taking advantage of digital capabilities and innovation to build entirely new revenue streams.”
“We also observe that our most innovative customers have achieved a sharp gain in agility and the ability to refocus resources away from internal IT and towards growth. While “digital” is a widespread term today, right now digital transformation is only happening in pockets and is proving elusive for many global enterprises.”
“One of the keys to unlocking digital transformation is cloud computing. From the work we’re doing with clients, we’re seeing that it has the power to create revenue by making the customer journey effortless across any device, enables faster customer sign-ups so they’ll spend sooner and support real-time analytics to make more accurate targeting decisions. The most innovative clients use the power of cloud and large scale analytics to generate new sources of revenue for example in manufacturing for the area of preventative maintenance.”
While the overwhelming majority (90%) recognized the need to embrace cloud based applications and infrastructure to deliver digital transformation, almost two thirds (64%) admitted that a lack of cloud investment was holding back vital digital initiatives.
Despite the maturity of cloud technology the research showed many traditional barriers to adoption remain. Around half of business decision makers agreed factors such as security (50%) and data protection concerns (44%) were hindering cloud investment while a quarter stated protection of intellectual property (24%) and fears of vendor lock-in (23%) were additional contributing factors.
CIOs acknowledged the missed opportunities and threats involved if IT doesn’t move to a more flexible and agile approach to support revenue growth and competiveness. Over a third of CIOs admitted that if the IT department wasn’t able to modernize company IT effectively in the next 12 months then it would lead to reduced staff productivity (38%), increased time to market (34%) reduced ability to service customers in new ways (33%), a risk of data theft occurring (35%) and limited their company’s ability to launch new products and services (35%).
Losing revenue is something no company can afford, yet almost half of respondents who said the business was missing out on revenue opportunities due to a lack of cloud investment said this was due to the IT department not being able to develop applications fast enough for the business (44%) and couldn’t complete enough product releases each day or week to keep their software highly competitive (42%). A similar number (41%) of respondents cited that they couldn’t on-board customers quickly enough due to poor responsiveness of internal IT tools.
Jacques Pommeraud, CEO, Canopy, commented: “Trust is one of the most critical factors that customers are demanding from service providers – they need peace of mind that their customer and employee data is held in a safe, secure environment. Our industry must help enterprises overcome the barriers they face especially given the critical role cloud technologies play in driving topline revenue growth, innovation and talent attraction.”
Industry analyst firm Gartner has also reported on the positive impact digital transformation has on business. Ian Marriott, research vice president, Gartner, states that “IT sourcing strategies must be structured to enhance IT agility and address the needs of digital businesses. Organisations that don’t adapt their strategies, and the competencies required to execute them effectively, will fail to achieve the value opportunities presented by a highly digitalized future.”
Headquartered in London, Canopy is one of the largest European cloud services providers and operates globally. Powered by world leaders Atos, EMC and VMware, its mission is to enable organizations to become digital businesses by offering flexible, secure, enterprise-grade cloud solutions. For example, it is working with insurance companies to filter and analyze key data for better decision making, and with retailers to extend campaigns to mobile devices for joint in-store and on-line promotions. Canopy offers clients advisory and transformation services as well as its portfolio of solutions for IAAS, PAAS and SAAS.
About the Research
Independent research was conducted by Vanson Bourne in September 2014 in 5 key markets. 75 CIOs and 75 CFOs and 50 BDMs were surveyed in the UK, Germany, France and the US. 50 CIOs, 50 CFOs and 50 BDMs were surveyed in the Netherlands.
59% of respondents were in listed companies with 21% of them on the FTSE, 34% on NASDAQ, 33% on NYSE and 44% on EURONEXT. 71% of the respondents were in enterprise organisations (with 1000+ employees) and 17% of the sample was in companies of 10,000+ employees. Average organisational global annual revenue was €1.49bn and respondents in companies of 10,000+ employees had average global annual revenues of €4.05bn.
Respondents were in the following sectors: financial services (including insurance), IT and telecoms, manufacturing, business and professional services, retail, media, leisure and entertainment, transport and travel, utilities (including oil and gas), logistics and consumer services.