Let’s get digital says CBI as UK firms struggle to keep pace

Thought digital had won out over analogue, paper, index boxes and other ways of doing things 30 years ago? Not so according to research.

A “digital divide” is opening up across the British economy, with just over half (55 percent) of “pioneer” firms adopting digital technologies and processes, while the other half (45 percent) are falling behind. This is according to new research from the CBI and IBM.

Maybe this is why we now have the rather strange scenario of large technology firms like IBM, SAP and Cisco talking about firms having to “digitise” their business and embracing “digital transformation”, when it was all about “digitalising” or “digitalisation” all those years ago.

The technology industry is well known for trying to encapsulate broad ideas in terms that can be easily hyped to sell “new” products and services, when we’re already getting there in an evolutionary way. Just think about electronic data interchange to telemetry to machine-to-machine to the Internet of Things and you’ll get the point.

But it does seem, according to this research, that the UK is a digital Luddite, despite being one of the biggest technology markets in the world.

Although the UK takes top place globally for e-commerce and fifth place for the “availability of technology”, it ranks only fourteenth in the world for company-level adoption of digital technology, with many companies struggling to digitise their businesses at the rate of peers in other countries.

Companies here cite a mix of connectivity challenges and security concerns as barriers to digital adoption, but predominantly they are hindered by a lack of appropriate skills inside their business (42 percent of firms) and an “unclear return on investment” (33 percent).

The problem is not lack of conviction about the potential impact. Nearly all firms believe that digital technology has the ability to revolutionise the business landscape, driving productivity (94 percent), growth and job creation. And almost three quarters (73 percent) see improved customer satisfaction and experience as its biggest benefit.

To take advantage of digital technology across the economy, the CBI recommends:

Firms appoint a chief digital or technology officer to the senior executive team to drive digital strategy and execution

Change the age and skills diversity of boards and board advisers, drawing on the expertise of a new generation of “digital natives”

Carolyn Fairbairn, CBI director-general, said: “Businesses globally are in the throes of an extraordinary digital revolution that is transforming productivity and creating a new generation of winning companies. But in the UK, too many firms are being left behind.

“While pioneering firms are seizing digital opportunities, nearly half are struggling – a growing digital divide that is threatening UK competitiveness.”

She said: “Giving digital a human face by appointing a chief technology officer will help businesses build the long-term digital strategies that will be critical to their futures.”

@AntonySavvas