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Digital change creating leaders and laggards

Greg Hendrick, of XL Catlin

A study has revealed how the importance of embracing digitalisation is creating leaders and laggards across the business world.

Sponsored by XL Catlin, the Harvard Business Review Analytic Services study, entitled Operationalising Digital Transformation: New Insights into Making Digital Transformation Work, surveyed 335 respondents across a variety of business around the world.

Some 43 per cent said they were achieving positive outcomes from digital transformation investments, especially those using digital technology at all levels of operations, from supply chains and distribution networks to compliance activities and analytics.

However, in contrast to the digital transformation leaders, other organisations are finding digital transformation a challenge.

The report looked at what differentiated the leaders, and also the new risks these companies face including those associated with advancing technologies and the risk of disruption by competitors ahead of the digital curve.

The study found that almost three out of four of the business es classified as digital transformation leaders reported revenue increases, with the percentage dropping to 20 per cent or below for those reporting modest or negligible benefits from digital transformation.

Almost 40 per cent of respondents said their core business was at risk of digital disruption from other businesses further along the digitisation path or “quicker on the draw”.

And more than 80 per cent of companies said the biggest risk associated with digitisation was not embracing it.

Legacy systems, siloed operations and information systems, and budgetary constraints were cited as the top three challenges that organisations face in leveraging digital capabilities to improve operations.

Greg Hendrick, president of property & casualty at XL Catlin, said: “As re/insurers, it is imperative that we understand how the use of digital technologies is transforming the way our clients across all industries work and the risks they face.

“Studies like this will help us gain insights and look ahead so we can help our clients address these risks to achieve the full benefits of digital transformation throughout their entire operation.”

Alex Clemente, managing director of HBR-AS, said: “It’s somewhat logical that many organisations began their digital transformation at customer touchpoints, being driven by consumer demand.

“However, leading organisations know that back office functions, such as general operations, supply chain, and distribution, are equally fundamental to operationalising digital transformation.”

Click on Xl Catlin study in related media to read the study in full.