Epochal Change

3 March 2021

The Digital Revolution:

Many companies are in a process of epochal change.

The Italian Experience...

Digital transformation is now a strategic priority for companies in all sectors and the past year, due to the pandemic, has highlighted even more gaps in larger companies.

Digital technologies are present in our daily lives and are also forcing companies to change - it is no longer possible to procrastinate.

The increasingly widespread adoption of the Cloud, the introduction of the IoT (Internet of Thing), the need to give value to the enormous amount of data, are causing to all industries to undergo a radical change in processes, in their ways of working and in the corporate culture itself.

Research conducted by Accenture The European Double Up: A twin Strategy that will Strengthen Competitiveness of 4,051 executives of European companies was presented at the annual meeting of the World Economic Forum last January. It underlined that for European companies to return to levels of profitability before the pandemic would take 18 months and only 32% of companies expect to realize an increase in profits in the next 12 months. These latter realities, defined as "the leading companies of tomorrow", will focus on the adoption of digital, together with the implementation of sustainability actions. The study shows that around half (45%) of European companies are prioritizing investments in both digital transformation and sustainability, with 40% of companies planning to make large investments in the field of artificial intelligence, 37 % in the cloud and 31% in sustainability.

In Italy, a survey made by the European Investment Bank, still highlights a low focus of Italian companies on innovation with just 17% having concentrated investments in innovation relating to the introduction of software and digital technologies. Proof of the benefits of digitization is the analysis of the productivity level which shows that digitized companies perform better and are more dynamic than non-digitized ones. The EIBIS survey shows the average productivity of digital companies in Italy is 12.3 %, more than 11.7% of non-digitized companies. Furthermore, in the last three years, companies that have undertaken innovations in the digital field have had a growth trend of the workforce higher than that of companies that have not implemented digital technologies. There is no doubt, in fact, that digital transformation requires a profound cultural change and the acquisition of new skills and profiles, which often come from the digital world.

The technologies that drive this transformation are many, such as:

  • e-commerce is now the main sales channel for many companies. The School of Management of the Politecnico di Milano and Netcomm estimate that the lockdown has created 2 million new “digital” consumers in Italy, with an increase in online sales of 24%. The new Sales Managers will have to be able to interpret the new dynamics of the digital market as well as the processes related to the supply chain.
  • Big Data and IoT: data has become essential for understanding and analyzing customer behavior, but also for supporting and making business processes more efficient. Big Data management will also concern data flows deriving from IOT systems along the upstream and downstream phases of the Supply Chain. The new Chief Data Officer profiles, together with other experts, are able to combine analytics skills with business knowledge, and this will be crucial in the transformation process.
  • IoT: the technology at the base of the Digital Factory and Smart Logistics (Smart Home or Smart Grid) will allow predictive monitoring of plants and networks and optimize capacity based on planning of the demand.

Production and logistics managers as well as network managers will need to acquire more and more new skills in this area to be able to lead the change.

  • Artificial Intelligence: will play a considerable role both in the optimization of back office processes and in the planning and predictive analysis processes. The adoption of these technologies is still at the initial stage, but there is no doubt that AI experts will be increasingly valuable in pushing the adoption of new models.
  • Cloud Computing: according to the Anitec Assinform report, the Cloud market reached just under 3 billion Euros at the end of 2019, raising approximately 18% between 2019 and 2022. The cloud is an essential actor in the digitization process, allowing access to data and systems in any time and space, accelerating innovation processes and the release of new digital services.
  • Cybersecurity: is an issue that is increasingly part of strategic plans and which requires a strategic approach to protect company assets from the threats coming from the Cyberworld. Companies will increasingly look for experts in Cybersecurity Analysis and Threat.
  • Top management and CEOs must be prepared to face the Digital Transformation which will affect operational models, ways of communicating, organizational aspects and customer management models.

Guglielmo Sallustio
Partner, Italy


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