Digital is far more than just IT agenda

Digital IQ survey

Czech Republic & Slovakia

 

Ten years ago, PwC set out to assess how businesses view, invest in, and adopt digital technology. Back then, “digital” was just another name for “IT.” Was there any change over the last decade? Is there any difference in perception from the global perspective compared to our local circumstance? To find out, we analyzed responses of companies from the Czech Republic and Slovakia with responses of more than 2,000 business and technology executives worldwide. 

 

Two views of “Digital”

 

In 2007, “digital” was just another name for “IT.” From the global perspective, today's definition of digital is all-encompassing and refers to emerging technology, the cloud, artificial intelligence, internet of things and more. In our region, however, we still stick mostly with the „old school“ definition, linking digital primarily to IT activities, leaving the driving seat to CIO, instead to CEO.

How does your organization define digital?

Which executive is responsible for the following digital activities?

Prioritizing digital investments
Graf  SK CZ
Graf Global

Our CEO is champion for digital.

Prioritizing digital investments
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pie-graph-04

Lack of perception that digital is primarily business concern results in our region in weaker alignment on digital strategy at the Board level. 70% companies globally consider their digital strategy agreed & shared at the Board level, while only 55% in CZ & SK.

Reversed view of benefits

Globally, companies are outward oriented – they believe digital creates new opportunities for revenue streams. As they expect the global pie to grow, their top priority is growing their revenue to keep or increase their market share. Our companies are still inward oriented having cost savings and profitability increases as their top priority and revenue growth only as the #3 expectation.

Investing into digital

Companies in CZ &SK are more conservative in investing into digital. While globally 42% of companies declare they spend more than 5% of their investment budgets on digital technology, only 10% of respondents from CZ &SK do so. Vast majority (90%) spend no more than 5% of their investment budget in digital.

While spending less, we are also more conservative in selection of technologies we already invest into. Topics such as 3D printing, augmented reality, robotics, and blockchain appear to be overlooked. Even for areas that appear to be on the radar of our firms (artificial intelligence, Internet of Things), less firms pay attention to them then global benchmark indicates.

This is in strict contrast with declared intention to invest into new digital technologies. Here, our companies see the trends of where’s the need to invest relatively on-par with their global peers. However, unless they radically change their behavior documented by the survey (approach to digital, dedicated budgets, etc.), we perceive this to be more wishful thinking than realistic intention to act.

Whatever is the reason for investing into the digital, we are still weak in looking back whether our efforts make sense. While globally two thirds of companies consistently measure benefits delivered by digital innovation efforts, only 40% of our companies do so.

Obstacles on the way to digital

55% of global executives say digital projects are delivered within 100% scope always or frequently. Our executives say so only for 1 out of 3 projects.

The key gaps existing in our companies, compared to their global peers, in why they are not able to realize full benefits of digital projects, concentrate on human factors:

  • Lack of properly skilled people (barrier for 95% of local vs. 63% of global respondents)
  • Inflexible or slow processes (75% vs. 42%)
  • Ineffective talent recruitment and retention (55% vs 34%)

 

Digital the wrong way

More than half companies still use an outdated approach to innovation dominated by evaluating existing tools and/or waiting for strategic vendors to introduce new technologies to companies (55% globally and 55% in CZ&SK). The better half focuses on technology selection based on defined business needs.

Our firms still favor reactive behavior to systematic approaches. Every second local firm counts on ad-hoc teams while only 29% of firms globally do so.

Unjustified optimism of top managers

Are our firms using modern technologies in a good way? Are our firms ready for to use future technologies in a good way? Two thirds of Slovak CEO’s think they do it better than other firms in Slovakia. This survey indicates they should rather stop looking next door and have a look across borders to other countries. Unless they stop taking digital as IT topic and put it on their agendas, Slovakia will be lagging behind.

Companies in CZ &SK are more conservative in investing into digital. While globally 42% of companies declare they spend more than 5% of their investment budgets on digital technology, only 10% of respondents from CZ &SK do so. Vast majority (90%) spend no more than 5% of their investment budget in digital.

 

Contact us

Štefan Čupil

Director, PwC Slovakia

Tel: +421 259 350 599

Ján Uriga

Senior Manager, PwC Slovakia

Tel: +421 903 420 351

Jakub Vančo

Senior Consultant, PwC Slovakia

Tel: +421911776753

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