Digital transformation has tipped from buzzword to baseline in the middle market, and not a moment too soon. As the COVID-19 pandemic threatens the health of people and businesses across every sector, middle market companies that have built resiliency into their business through digital transformation have more tools to endure disruption. The good news: BDO 2020 Digital Transformation Survey, which polled 600 C-level executives, finds that 100% of respondents are currently implementing a digital transformation strategy or are in the process of developing one.
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Digital transformation has tipped from buzzword to baseline in the middle market. With businesses planning for digital transformation & a challenging economic climate ahead, stakes are higher than ever. Read more in BDO’s 2020 Digital Transformation Survey
However, with virtually all businesses planning for digital transformation and a challenging economic climate ahead, the stakes are higher than ever.
“A crisis like the COVID-19 pandemic can lead some organizations to pause or de-emphasize innovation,” said Malcolm Cohron, National Digital Transformation Services Leader, BDO Digital. “But now more than ever, it’s critical to continue developing digital capabilities that enable success for both the present and future. Deploying digital initiatives strategically can help protect revenues and identify unmet customer needs.”
Key findings of the report, Building Tomorrow’s Business: How the Middle Market Is Tackling Disruption Today, include:
Digital Priorities
While the pandemic has likely shifted short-term business objectives to focus on operational efficiency and effectiveness, in the long term, middle market executives say that the top objectives for their digital strategy are diversifying revenues and modernizing IT infrastructure.
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Middle market companies point to four key value drivers of digital transformation:
- Enhanced Operational Efficiency: A majority of C-level executives (58%) say increasing operational efficiencies is a top short-term business goal. Adapting to change and volatility in this environment requires greater agility and urgency, and the ability to do more with less. Breaking down artificial barriers within an organization can help integrate processes with the flow of information, which enables better collaboration and decision-making.
- Stronger Digital Resilience: As millions shift to remote work, pivot production to new sites and double down on digital revenue streams, cyber threats are escalating. With the stakes for digital resilience high, a plurality of executives (39%) cite cyberattacks as their top digital threat and 59% say bolstering cybersecurity is one of their top short-term business goals.
- Improved Customer Experience: Businesses will fight to preserve revenue during this period of economic disruption, and customer retention can be the difference between sustaining through the crisis and not. As customer behaviors shift, digital transformation can help provide customers with better service and, perhaps more importantly, identify unmet needs. This will be essential to staying relevant in a dynamic market. More than two-thirds (68%) say improving customer experience is their top short-term business goal, and 22% cite it as their #1 digital priority.
- Revenue Opportunity: Cash flow is now a critical challenge for many middle market companies, but digital transformation can help them protect and increase revenue. As companies adapt their approach to priority goods and services and identify opportunities for growth in the new market, data-driven planning and innovation is critical. In the long-term, diversifying revenue is companies’ most-cited business objective.
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