The impact of digital transformation can be far-reaching and profound as it fundamentally changes how businesses operate and deliver value to customers. In the broadest sense, digital transformation refers to the process of integrating technology into different aspects of a company. It brings more agile solutions to everyday processes like data collection, mobile access, customer experience, marketing, and analytics. It's also a cultural change that requires organizations to challenge the status quo, experiment, and get comfortable with failure.
Regardless of the industry, global spending on digital transformation reached over $ 1.3 trillion in 2020 , which is about 10.4% growth compared to 2019.
What makes digital transformation appealing and integral to today's business landscape? The COVID-19 pandemic coupled with the changing market conditions bolstered the need for automation, remote work, and efficient workflow. Adopting digital transformation initiatives has proven to enhance the way a company operates and responds in a more agile way to market needs.
Essential Digital Transformation Stats
Digital transformation should be at the forefront of every organization's goal. If you have yet to digitize, digitalize, and reach a total transformation, here is a comprehensive rundown of stats to encourage every company to start. These should help illustrate how digital transformation can improve your reach, customer service, and, ultimately, the bottom line.
Digitization is the first stage of the entire digital transformation process. It involves computerizing physical files or processes and relying on digital artifacts instead. Some examples include converting paper documents into digital ones, using electronics for manufacturing, and more.
- Worldwide, the average share of products that have been digitized fully or partially has increased by 26% from June 2017 to July 2020. (Statista)
- Digitization's global share is about seven years ahead of the average adoption rate, even before the pandemic. (Statista)
- 65% of the world's GDP is forecasted to be digitized by 2022. (IDC)
- Over half of CEOs (51%) believe that digital improvements have increased revenue for their respective companies. (Gartner)
- Intelligent systems will deliver 70% of customer engagements by 2022. (Gartner)
Digital Adoption Platform
Digital adoption is the next step to transformation - where companies figure out how to leverage abstracted or digitized data and processes. These innovations contribute to how documentation, production quality, time-to-market, monitoring, and production performance, among other things, can improve.
- Forecasts for the global digital transformation market will increase from $469.8 billion in 2020 to $1,009.8 billion by 2025, at a massive compound annual growth rate (CAGR) of 16.5%. (Research and Markets)
- 89% of all companies are either planning to or have already started creating a digital-first business strategy. (IDG)
- Almost twice as many CEOs (57%) choose to "reinternalize IT" or bring information technology back to the core of the business for competitive advantage. (Gartner)
- 55% of startups have adopted a digital business strategy, while 38% of traditional businesses are also moving with the trend. (IDC)
- 73% of manufacturing executives consider IoT (Internet of Things) vital to digital business strategy, and around 69% use IoT for monitoring equipment and machinery. (Forbes)
Digital Transformation General Stats
Digital transformation is an overall shift toward IT solutions and capabilities, where companies understand that new-era technology skills could gain their competitive advantage and generate growth for the business.
- Surveys indicate that leaders adopt digital transformation mainly due to growth opportunities (51%) and to keep up with industry competition (41%). Meanwhile, some organizations (38%) are motivated because of updated GDPR and other regulatory standards that require higher security processes for customers. (Prophet)
- The COVID-19 pandemic-related agendas for CEOs include becoming a leading company in digital transformation projects (37%) and enhancing remote work for staff (37%).
- Companies that have successfully endured the COVID-19 impact note the role of technology. Around 67% mentioned they were ahead of their peers in adopting tech-related solutions before the crisis, and 56% said they adopted technology during the crisis. (McKinsey)
- 29% of CEOs and executives reported a positive impact on growth when they pushed through with digital transformation, while 41% noted that their sales and marketing campaigns were positively affected by the change. (Deloitte)
- Digital transformation drives growth and revenue. From 2020 to 2023, the projected GDP contribution will be 65% or around $ 6.8 trillion from direct digital transformation investments. (IDC)
Digital Transformation Challenges
Digital transformation doesn't happen overnight. It takes considerable time, effort, and resources to successfully shift and fully integrate it into everyday workflow. Here are the biggest challenges that adopters have experienced:
- About 28% of companies still perceive digital transformation as too costly, and 29% note that it is hard to measure its ROI (Prophet). Indeed, Gartner discusses that deeper transformation can only be achieved if the leadership can first define and quantify what type of digital transformation is needed.
- Cultural issues also hinder digital transformation, with 26% resisting change to workflow and another 26% citing legal and compliance bottlenecks delaying progress. (Prophet)
- One major challenge for manufacturing brands is the complexity of implementation - about 76% rate digital transformation as somewhat challenging and highly challenging. (Fujitsu)
- Upfront costs (75%), time allotment required for full transformation (75%), and the availability of qualified staff (75%) are all significant issues companies recognize when moving toward digital transformation. (Fujitsu)
- About one-third of CIOs anticipate difficulty hiring appropriate people or training existing data science and cybersecurity staff. (IDG)
Digital Adoption Statistics by Industry
CEOs and CIOs across many industries recognize that digital transformation boosts growth and profit. Moving away from brick-and-mortar management to an AI-powered hybrid or cloud improves efficiency and productivity and could potentially bring down operational costs. These stats highlight specific industries that have benefited from digital transformation efforts:
- The global digital transformation market for retail reached $143.55 billion in 2020 and is expected to grow at 18.2% CAGR by 2026. The Asia Pacific has the highest growth rate in digital transformation for retail. (Mordor Intelligence)
- 63% of retailers are ready to spend more on data analytics, and 35% on AI technology to improve workflow. (Gartner)
- 71% recognize that digital transformation is an essential part of retail technology. (Fujitsu)
- About 75% of Internet users in the U.S. alone used it for online shopping due to the personalized and accessible experience. (Mordor Intelligence)
- Digital healthcare is trending in developed countries like Germany, the U.S., China, and others. The global market for digital transformation in healthcare is projected to grow at a CAGR of over 14% up to 2031. (Future Market Insights)
- At least $250 billion of today's U.S. healthcare expenditure (20% of the total) is ready to be provided in virtual modes. (McKinsey)
- Telehealth and telemedicine efforts have increased from 11% to 76% following the pandemic. (McKinsey)
- By 2025, the projected revenue from AI healthcare delivery and technology will be around $34 billion. (BusinessWire)
- IBM survey found that healthcare organizations incur higher costs associated with data breaches, three times over other industries. These entail appropriate data security measures. (Future Market Insights)
- Despite overall growth rates falling in the wake of COVID-19, financial services and infrastructure are among the sectors to maintain double-digit growth rates, in part due to digital transformation. (Probe Group)
- Forbes reports Cornerstone Advisors' data that 75% of traditional banks and credit unions have initiated a digital transformation procedure within the organization, and another 15% are developing their strategy by 2022. (Forbes)
- By 2025, 25% of the insurance industry will shift to automated procedures via machine learning and AI-powered analytics. (McKinsey)
- Job automation is forecasted to eliminate 29% of jobs but contribute to new job postings by 13%. (Forrester)
- A lack of key skills in digital transformation is what 55% of employers see as a concern when innovating. (PwC)
- HR leaders use AI to assist workers in the company, and 58% note that AI in HR has improved overall productivity, while 16% use it to improve insights. (Statista)
How Kissflow accelerates Digital Transformation Journey
Digital transformation has proven essential for all types of industries. It enables a more efficient approach, less downtime, and less likelihood of human errors, and ultimately broadens a company’s reach.
Perhaps the biggest takeaway is that digital transformation is a long and arduous process. Any digital application or revision will not be immediately practical without proper onboarding, training, and support to employees as well as end users. Companies benefit from having reliable resources that can initiate or support ongoing procedures.
Kissflow is among the industry's trusted work platforms that are effectively designed to empower you digitally, giving you the agility and flexibility to run your business operations hassle-free.
Whether it is automating processes, digitizing your operations, managing requests, or building custom applications, with Kissflow you can do it all within a unified platform, without or with limited coding expertise.