- Research from NTT Data and Oxford Economics reveals how 1,000 business and IT executives across 16 industries are prioritizing digital initiatives in the face of change.
- The research found that 77% of business and IT executives are not prepared to meet the challenges of continued disruption.
- The report also found that companies only 16% of executives say employee retention and engagement is a top priority.
NTT DATA, a digital business and IT services leader, recently released new research with Oxford Economics, which found that 77% of business and IT executives are not prepared to meet the challenges of continued disruption from health crises and natural disasters, and they are not counting on their employees for solutions.
Only 16% of respondents ranked employee satisfaction and retention as a priority, and nearly half believe employee skills have no impact on their innovation efforts.
The research, “Innovation Index: Digital Strategies for an Era of Constant Disruption,” reveals how 1,000 business and IT executives across 16 industries are prioritizing digital initiatives in the face of change.
The findings show a small group of leading organizations (6%) report above average performance in nearly all areas from financial performance and productivity to employee and customer satisfaction. This group of leaders demonstrates a focus on data-driven decision making, employee and customer experience and leveraging technologies to drive innovation.
“The continued shockwaves of the global pandemic have left many organizations feeling the impacts of disruption across their workforces, customers, and bottom lines,” said Eric Clark, Chief Digital Officer, NTT DATA Services.
Customers Remain a Top Priority; Employees Take a Back Seat
While 66% of executives say customer, patient, and constituent satisfaction is a priority, only 16% say employee retention and engagement is one – even though employees have a direct impact on customer satisfaction and other key business drivers like financial performance and cybersecurity.
Regarding company culture, one-third believe that culture is not a primary component of employee satisfaction, and only 5% claim that employees factor into strategic and operational decision making.
The lack of focus on employees is also highlighted in responses related to flexible work, with 21% of executives rating flexible working options as a top contributor to employee satisfaction – the lowest of any response – conflicting with reports from employees that flexible work is not only important, but something they would consider leaving their job over.
Only 42% of organizations have implemented digital workplace technologies, and nearly half say rigid processes do not allow for remote or flexible work.
Leaders that emerged from the survey (the 6% that reported above average growth) also claim a higher productivity rate at 53%, compared to the average of just 34%.
As U.S. resignation numbers continue to rise to record numbers, organizations will need to evaluate the connection between customer satisfaction and employee retention and engagement.
Setting the Foundation for Innovation with Technology
In this era of digital disruption, the key to remaining agile and adaptive to changes in the market is investing in technologies that will serve as the foundation for future innovation.
The research highlights the clear benefits of innovation and data-driven technologies – including financial performance, customer satisfaction, workforce productivity, and employee retention.
But, just 43% of executives view innovation as mission-critical, with another 42% saying it’s a nice-to-have. Further data shows that 46% say their innovation is reactive to the market, and 56% believe that employee skills are a detriment or have no impact on innovation efforts.
As the COVID-19 pandemic continues, driving supply chain and workforce disruptions, one thing is certain: the only constant is change.
Disasters, both human-made and natural, have increased in frequency and impact. While negative operational and performance impacts caused by climate change, natural disasters and health crises are top of mind for 61%, only 23% feel prepared to meet the challenges of rapid, constant change.
The research shows that most organizations are heavily investing in foundational technologies, and despite expecting significant value from emerging technologies, many are still lacking investment.
The full report highlights how business and IT executives are approaching digital transformation initiatives, from data strategies to technology adoption, to overcome market and industry challenges.
The following themes emerged from the research:
- The human element may be the most important and overlooked barrier to successful digital transformation. Improving employee engagement and retention is not a priority — just 16% of respondents say this is a top focus area, and even fewer report employee demand as a driver for organizational strategy.
- Foundational technologies are yielding results, and expectations are high for established tech. Adoption rates of digital solutions like customer relationship management (CRM), cybersecurity and cloud far outpace investments in predictive analytics, conversational artificial intelligence (AI), machine learning, and other emerging technologies. But when examining expected value, executives expect the latter to help improve financial performance, increase customer satisfaction, reduce risk, and achieve other organizational benefits.
- Data drives decision making in a digital economy, but management of this valuable resource falls short. More than half of respondents have not yet mastered using data to inform decisions, and nearly half are not confident in their ability to prevent security breaches. In fact, just 44% indicated they have governance plans in place to support innovation.
- Culture and innovation are critical for success, but organizations could do more. Roughly one-third claim to effectively provide a sense of organizational purpose, and just one-fourth have successfully developed an innovation-focused culture.
- Many are still struggling to adapt to constant digital disruption. Despite half of respondents saying the pace of technology change will have a positive impact on their operations, only 40% are highly prepared to meet those challenges. Even more alarming is nearly half of respondents still view innovation as “nice to have” rather than critical to their survival.
“When times are uncertain, it is a natural response to tighten budgets and focus on short-term goals that bring revenue, but this comes at the expense of innovation and future goals. Leaders must focus on identifying the effective digital technologies that allow them to quickly scale resources, support remote work and respond to market pressures while prioritizing employee retention,” Clark said in the release.