Covid-19 accelerates digital transformation, claims a study

The “Digital Transformation Index 2020” from Dell Technologies examined the digitalization measures of companies during the coronavirus crisis. According to the index, the global pandemic acts as an accelerating factor for digital transformation. Since spring 2020, many companies in Europe have significantly intensified their efforts for digitalization and within a few months have realized projects that would otherwise probably have taken them years.

61% of German and 72% of European companies are currently putting their business models to the test. About three quarters of them have pushed concrete programs for digital transformation. An important finding associated with the Covid-19 pandemic is the need for an agile and scalable IT infrastructure. Companies hope that it will enable them to react more quickly to unforeseen events.

Three categories depending on the state of digitization

Depending on their activities in the field of digitalization, the study divides the surveyed companies into three categories: Digital Adopters, Digital Leaders and Digital Laggards. Digital Adopters include companies that have a mature plan for their digital transformation. Companies are considered Digital Leaders if digital transformation is already deeply embedded in their DNA. Stragglers who do not have a digital plan and invest few financial resources in digital transformation are called Digital Laggards.

Rising number of Digital Adopters and Digital Leaders

According to the latest survey, 36% of companies in Europe are Digital Adopters and 6% are Digital Leaders. Compared to the 2018 edition of the study, this represents an increase in both categories. Two years ago, 20% were among the Digital Adopters and 4% among the Digital Leaders.

Currently, only 2% of companies are Digital Laggards. This figure clearly shows that even companies that hardly dealt with digitalization issues in the past are now doing so – certainly also due to the coronavirus crisis. As a result of their increased efforts, companies have moved up into a higher category of the Digital Transformation Index.

In Germany, 6% of companies are among the Digital Leaders, which is in line with the European average. At 38%, the share of Digital Adopters is even slightly above the continental average. However, there are also more Digital Laggards (5%) in Germany than in France, the UK, Italy, the Netherlands, Poland, Spain and Sweden.

Challenges in digitalization

Even though companies have intensified their digitalization efforts in the wake of the pandemic, certain obstacles still stand in the way of their digital transformation. The biggest challenges cited were lack of budgets and resources (Germany: 28%, Europe 29%), the flood of data and the difficulty in extracting information from the data (Germany 34%, Europe: 28%), and concerns about data protection and cybersecurity (Germany: 31%, Europe: 27%).

For the Digital Transformation Index, Dell Technologies surveys business decision-makers in medium-sized and large companies worldwide every two years. This year, 4,300 decision makers in 18 countries took part in the survey.