Even though most of the top-ranked companies in Deloitte report “CE TOP 500” (edition 2016) are long established and have been included in our rankings many times before, they clearly have a strong grasp on the changing reality and are fully aware of the influx of many new digital competitors. Today, organisations are considering how best to fine-tune their operations and business models to the new reality, so as to maximise profits, protect their market share and stay competitive.
The financial questionnaire on which we base our ranking of the 500 largest Central European companies and 100 financial institutions once again included additional questions, this year focusing on digital transformation issues.
Having in mind the results of our previous survey conducted by Deloitte Digital in May 2016 (Digital Transformation – strategy for the future or the pursuit of reality ?), we asked the largest companies across Central Europe a series of questions around this topic with the aim of gaining a better understanding of the role and dynamics of digital transformation. We received responses from 21% (106) of the companies in the CE Top 500 and from 38% (19) of the banks and 34% (17) insurance companies in our rankings of the 50 largest banking institutions and 50 largest insurers in Central Europe and Ukraine.
Among other questions, we asked our respondents whether the digital revolution will affect their industry and their performance. More than three-quarters (79%) responded affirmatively. Polish participants seemed even more convinced, with 83% in agreement.
With a closer look at the results, a steady trend can be identified, which shows that the largest companies in the region are planning to further develop and operationalise their digital strategies. Over two-thirds (73%) of business organisations operating in Central Europe have already developed their digital strategies and 61% know how they will go about implementing them. Based on our study, 18% of companies in the survey are still developing their approach to transformation and quantifying their business objectives for the years to come.
Digitalisation will have a significant impact on business activities during the next few years, lifting barriers and changing operational models and ways of interacting with clients and customers. What looks today like an optional add-on or a “nice-to-have” may well prove to be necessary tomorrow for survival. Many companies in our survey realise this and have already devoted significant funds to digital transformation.
Close to one in ten (9%) of the entities in the survey, who agreed to provide their input, have to date spent €10m or more on digital transformation related projects. When considering non-financial entities, energy companies and utilities form the largest group (36%). However, the highest percentage of those that have spent more than €10m on digital transformation purposes are from the banking sector (57%). By way of contrast, only 5% of insurers have spent as much.
Even though 82% of survey participants from the insurance sector confirm that digital transformation will impact their business, only 59% have developed a target model for digital transformation. This implies that over 20% of them will need to address it over the next few years.
In general, the largest Central European companies that feature year after year in the Deloitte rankings fully recognise the significance and inevitable advancement of the digital revolution. They are also aware that digital transformation - understood to be a transition to new methods of interacting with clients and customers and new models of work that use digital tools such as social media, mobile technologies and advanced analytics - will enable them to change internally and respond to customer needs in a faster and more comprehensive manner.
To quote one CEO who took part our in-depth interview: "From our perspective, digitalisation is not an end in itself but a means of bringing the customer into focus."