More than four in 10 companies surveyed for an XL Catlin-sponsored study have reported 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.
The XL Catlin-sponsored study titled Operationalizing Digital Transformation: New Insights into Making Digital Transformation Work, was released on Wednesday. It was conducted by Harvard Business Review Analytics Services (HBR-AS) and sponsored by XL Catlin.
The survey found that 43% of the 335 respondents surveyed reported achieving positive outcomes from digital transformation investments. The study polled respondents across a wide variety of industries around the globe, with key industry sectors including manufacturing (13%), financial services (12%), education (11%) and technology (10%). Other sectors were each represented by 7% or less of the respondent base. XL Catlin noted in a press release that survey respondents represent regions in the following percentages: North America 31%, Asia-Pacific 27%, Europe 23%, South America 9%, Africa 7% and other regions 2%.
Although 43% of respondents reported achieving positive outcomes from digital transformation investments, these digital transformation leaders stand in sharp contrast to those achieving only modest benefits (followers) and negligible benefits (laggards), XL Catlin cautioned in the release.
Key study findings include the following:
Leaders are considerably outpacing the other two groups in business performance, with 73% reporting increased revenues, versus 20% of followers and 12% of laggards;
Among digital transformation leaders, 68% reported improved profitability compared to 25% of followers and 14% of laggards;
The vast majority of survey respondents (81%) said they plan to boost their spending on technology over the next two years as they fight to remain competitive;
Nearly 40% of survey respondents said that their core business is at risk of digital disruption from other businesses that may be further along the digitization path or “quicker on the draw”;
Almost 50% of respondents said that they will, at the least, lag behind their competitors if they fail to do a better job of interconnecting the various parts of their businesses digitally;
More than 80% of companies said that the biggest risk associated with digitization is not embracing it; and
Legacy systems, siloed operations/information systems and budgetary constraints are the top three challenges that organizations face in leveraging digital capabilities to improve operations.
“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,” Greg Hendrick, president of property and casualty at XL Catlin, said in the release. “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, added that “it’s somewhat logical that many organizations began their digital transformation at customer touchpoints, being driven by consumer demand. However, leading organizations know that back office functions (e.g. general operations, supply chain, and distribution) are equally fundamental to operationalizing digital transformation.”
XL Catlin is the global brand used by XL Group Ltd.’s insurance and reinsurance companies, which provide property, casualty, professional and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises throughout the world.
HBR-AS is an independent commercial research unit within Harvard Business Review Group, conducting research and comparative analysis on important management challenges and emerging business opportunities. Seeking to provide business intelligence and peer-group insight, each report is published based on the findings of original quantitative and/or qualitative research and analysis.