The more digitally proficient a company is the more likely it is to anticipate growth in the next year, according a new report by global software consultancy ThoughtWorks
LONDON, May 13, 2021 /PRNewswire/ — New international research commissioned by ThoughtWorks reveals that, against the backdrop of businesses recovering from the most seismic challenges in living memory, the most tech-proficient enterprises are the ones anticipating growth in the coming months.
The study, which covered 12 countries, surveyed a representative sample of 969 CEOs and CIOs about their level of proficiency when it came to business technology, and its bearing on business confidence and long-term goals.
The research suggested that digitally proficient businesses were significantly more likely to be growing. Four in five (82%) businesses that described themselves as fully proficient said they anticipated growth in 2021. This fell to 50% among enterprises that recognized their tech proficiency was behind the competition.
Tech-savvy businesses have greater appetite for risk
Asking about the priorities for the coming year, the results suggested that the most proficient businesses were also the most likely to be expanding their enterprises in the next six months. In comparison to less proficient businesses, they were significantly more likely to be launching new service lines (36% vs. 25%), investing in attracting the best talent (46% vs. 34%) and launching into new markets (36% vs. 30%).
Underpinning these growth initiatives, tech proficient businesses were also most likely to place importance on improving operational efficiency (51%), enhancing profitability (46%) and to actively invest in developing their leadership team’s technology know-how and proficiency (40%).
Technology issues preventing expansion
The report found that a high proportion of businesses overall knew their existing systems were in need of urgent modernization to achieve many of their goals for the coming year. Two in five (42%) businesses surveyed would not be able to launch into new markets, or launch new service lines (39%), without a considerable tech upgrade.
Meanwhile, for day-to-day operational activities, over a third (36%) said their systems were not fit for purpose for operational activities, to grow their customer base, or to train members of staff.
Larger businesses leverage their scale advantage
The ThoughtWorks research also found that larger companies had a distinct advantage over their smaller counterparts when it came to harnessing the full potential of new technologies. Overall, 71% of larger businesses (1,000+ employees) described themselves as advanced in their tech proficiency, compared with 54% of smaller enterprises (fewer than 250 employees). They were also more likely to anticipate growth in the coming months (71% vs 65%).
In terms of priorities for the year ahead, larger businesses were investing in twice as many areas of technology to achieve their priorities in the next 12months as smaller businesses.
UK companies underinvesting in technology
In the UK, companies were more likely to anticipate growth this year than the global average, and more likely to describe themselves as fully tech proficient. Seventy six percent of all companies anticipated growth this year, slightly above the global average (71%), while 76% described themselves as fully proficient (again, above the global average of 67%).
However, when it came to investing in technology applications for the year ahead, UK companies lagged behind the global average. Just 15% of UK firms were looking to invest in six or more areas of technology (compared with a global average of 20%).
Specific areas where UK companies lagged behind included digital transformation (40% investing compared with 56% of companies globally), enterprise modernization (24% vs 34% globally), and customer experience (35% vs 49% globally).
Ruth Harrison, Managing Director ThoughtWorks UK commented: “In this new economic climate, business executives, managers and entrepreneurs will become more reliant than ever upon software, platforms and data to ensure their business remains competitive, they can expand into new markets and increase profitability.
“Our findings should be a wake-up call for companies that are not taking the implications of digital transformation seriously enough. Far from being a technical problem – one that can be fixed by buying new equipment or software – this is about cultural change from within. It requires a top-down approach, with all members of the organization aligned and trained accordingly. The rate at which things are changing, accelerated in part by people’s reliance on technology during the pandemic, underlines the importance to act now. The gap between tech proficient companies and those that struggle with tech will only get wider.”
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