Digital Transformation: The Age of Innocence, Inertia or Innovation? Microsoft

With digital services rapidly changing every aspect of business, how do you measure the progress your organisation is making with its digital transformation? To that end, Microsoft has conducted the largest study of business and IT leaders to date around this subject. The report provides you with a digital transformation benchmark to help identify some of the obstacles ahead and provide you with recommendations for ensuring digital transformation success.
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Founder of UnifiedVU and Venture 9. Previously Founder and CEO of edocr.com

Help companies with digital and business transformation via process optimisation and system design, especially in the areas of bringing everything together for increased productivity and revenue growth.
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<p>Digital Transformation:  
The Age of Innocence, Inertia or Innovation?
   
We have arrived at a significant moment in time – the dawn of the fourth industrial revolution. 
This new era builds on the landmark breakthroughs of the technological age that began in the 
middle of the 20th century – mass scale computing, unprecedented processing power, computer 
storage, the rise of the internet, etc. – by blurring the lines between physical, digital, and 
biological frontiers. It will fundamentally alter the way we live, work and relate to each other. 
Capitalising on this phenomenon is the key to innovation and growth. From the rise of AI, 
machine learning, chatbots and the Internet of Things, to the mountains of data, mixed reality 
and the next frontiers, the challenge for businesses will be to harness the disruptive force of 
technology to shape their own destiny. Naturally, this comes while navigating the expectations 
of a changing workforce, addressing evolving cybersecurity threats, and managing a host of 
other challenges. 
In response, companies are embarking on digital transformation journeys that are creating 
huge opportunities. But digital transformation is not simply about technology. This transition 
to the fourth industrial age is shaping entire business strategies. Indeed, this study reports that 
nearly half of all UK leaders believe that their business models will cease to exist within the next 
five years. The threat of disruptors entering new markets and reshaping entire industries is also 
very real with more than half of all organisations expecting disruption to impact their industries 
within the next two years. These are core business challenges requiring urgent attention.
So, disruption is very real and heading straight for us. How will businesses and other 
organisations react? They will need to fully grasp the concept of digital transformation and its 
potential to more effectively engage customers, empower employees, optimise operations and 
transform products and services. This report suggests that many organisations are still limiting 
the scope of their digital transformation strategies to customer experience and operational 
processes. This is a missed opportunity – digital transformation should be regarded as a 
transformation of business culture in a digital age. This requires leaders to re-envision entire 
business models and embrace a different way of bringing together people, data, and processes 
to create value for their customers. But how do you transform for success in the future while 
running your business today?
That’s the key objective for this report – to better understand how UK organisations are thinking 
about disruption and their own digital transformation journeys. I’d like to thank all those who 
have played a role in producing it, particularly the research participants and respondents who 
have provided the real-world views and insights on which this report is based. 
I hope you find it a valuable guide for your own digital transformation journey.
Foreword
Dr Nicola Hodson, General Manager, 
Marketing and Operations, Microsoft UK 
Introduction 
Page 1
Digital Transformation Perceptions 
Page 2
The Case for Digital Transformation 
Page 8
Strategic Approach 
Page 14
Leadership 
Page 20
Technology 
Page 26
People 
Page 30
Progress 
Page 34
Society 
Page 42
Conclusion 
Page 44
Appendix A – Industry summaries 
Page 48
Appendix B – Methodology 
Page 60
Contents
Introduction
Welcome to Digital Transformation: The Age of Innocence, Inertia or Innovation? The pervasive access to 
new digital services is changing every aspect of business — shaping growth, disrupting industry landscapes, 
and providing the catalyst for new business models, products, services and experiences. It is enabling 
businesses to reimagine their structures and become digital businesses. As such, we have conducted the 
most extensive study to date into the impact of digital transformation on UK organisations at a time of 
great uncertainty in the British economy.
To this end, we sought the views of more than 1,000 business and IT leaders from large UK organisations 
across a variety of sectors. This was complemented by a series of in-depth interviews with digital 
transformation leaders and influencers, allowing for deeper insight. 
Whilst leaders from a wide range of industries were surveyed, throughout the report we highlight specific 
findings from financial services, retail, manufacturing, public sector organisations and other services sectors 
for the purpose of cross-industry comparisons. However, the findings are relevant to readers from all 
sectors. Further details on the methodology can be found in Appendix B. 
Digital transformation can mean many things to many people. Seeing it as simply the industrial era, only 
faster and more efficient, is to miss what is actually happening. In increasingly uncertain times it can be all 
too easy to not take time to reflect on the seismic implications this change might have on any organisation. 
This report is a time-effective and valuable means to get you prepared.
In an age where uncertainty has replaced business-as-usual and competitive advantage is fleeting, a 
fundamentally new approach is required. So digital transformation is not simply an IT department initiative 
or reinventing services for a mobile world. If done right, it permeates the very fabric of an organisation. 
Everybody is in the digital transformation team and the quality of the leadership is paramount.
Yet our survey findings suggest that many organisations are still in an age of innocence when it comes 
to digital transformation, whilst others seem bound by inertia. However, there are encouraging signs 
that some have grasped the nettle and are truly driving transformational strategies that will equip their 
organisations for success in the fourth industrial revolution. A few key findings of note from the pages that 
follow are:
1. Disruption is real – nearly half of all business leaders (44%) think their existing business models will 
cease to exist within the next five years.
2. It’s happening quickly – half of all organisations think that their industry will be disrupted within the 
next two years.
3. Taking action is the only option – yet almost half (46%) of business decision makers think their  
senior leadership are unwilling to disrupt their existing businesses in order to grow and compete more 
in the future.
4. The business drivers are significant, yet respondents don’t necessarily understand the full value 
digital transformation can deliver to their organisations. The top three drivers were cited as: 
• An improved customer experience
• Optimised operations
• Survival as a business 
This last response – survival as a business – is a big statement and shows just how important digital 
transformation is perceived to the future success of organisations. However, as we will learn, despite digital 
transformation being regarded as an important step in the evolution of organisations in the years to come, 
many respondents are still to grasp the true value that pursuing such a strategy can deliver across their 
entire organisations and beyond. 
This report provides a benchmark on which to measure the progress your organisation is making, 
identify some of the obstacles ahead and provide you with recommendations for ensuring digital 
transformation success.
1
1.
Digital 
Transformation 
Perceptions
2
To understand where the UK is in respect of digital transformation,  
we asked survey respondents how their organisation thinks about  
the concept of digital transformation itself.
One immediate observation is the sizable number of respondents who view digital transformation as a 
customer-facing (42%) or technology enabling (36%) exercise. Sectors such as financial services and retail 
are operating in hypercompetitive markets, so a relentless focus on the customer, coupled  
with any marginal gains they can acquire by employing the latest technology, makes sense.
However, a cause for concern is the low ranking of employee empowerment. If organisations do not  
make the connection between digital transformation and their employees making better, smarter decisions 
then they risk falling behind. In this day and age, younger employees have heightened expectations about  
what an employer can offer them so those not matching those expectations risks creating a self-imposed 
skills gap.
How the organisation thinks about ‘digital transformation’
Customer-facing technology initiatives
Technology enablers across the organisation
Technology innovation/experimentation
General overhaul of the business model
Data, analytics and IoT initiatives
Synonymous with IT / IT dept
Employee empowerment/collaboration
None of these or Don’t know
42%
36%
20%
16%
16%
13%
10%
16%
% of respondents (maximum of 2 statements could be selected)
3
Looking more in-depth at sector-specific findings, public sector and manufacturing respondents place 
greater emphasis on technology, where an ongoing need to drive down costs and do more with less is the 
primary objective.
It is encouraging to see that digital transformation is not generally perceived to be an IT project.  
Though, as we will see later, business leaders do not equally share the IT leaders’ perspective that it is 
central to digital leadership.
The relatively low association of digital transformation with overhauling business and operating models, 
suggests a disconnect between the disruption happening in markets and its potential impact on 
respondents. Disruptors are redefining sectors. Collaborative consumption as a business model has become 
mainstream. Yet with the need to rethink existing business models ranking so low, every company should 
be asking itself what would happen if an Uber or an AirBnB chose to enter their market.
Perception of digital transformation, by sector
Customer-facing  
technology initiatives
55%
60%
35%
27%
31%
Synonymous with  
IT/IT dept
15%
20%
16%
8%
9%
None of these or  
Don’t know
22%
20%
19%
22%
8%
Employee empowerment/
collaboration
11%
14%
9%
10%
9%
Other Services
Financial Services
Public Sector
Manufacturing
Retail
Technology enablers  
across the organisation
40%
27%
32%
34%
39%
Technology innovation/
experimentation
17%
12%
22%
18%
15%
General overhaul of  
the business model
21%
16%
16%
9%
9%
Data, analytics and  
IoT initiatives
18%
14%
13%
17%
16%
4
Perception of digital transformation, Business vs. CIO/IT
Customer-facing 
technology initiatives
Technology enablers 
across the organisation
Technology innovation/
experimentation
General overhaul of the 
business model
Data, analytics and  
IoT initiatives
Synonymous with  
IT/IT dept
Employee empowerment/
collaboration
None of these or  
Don’t know
43%
36%
35%
42%
19%
25%
17%
13%
15%
24%
12%
20%
10%
12%
18%
6%
Business leaders
CIOs and IT leaders
A sign that the IT function is, at last, blending into the organisation is the relative similarity in response from 
the business and IT functions. Smart CIOs align their KPIs with those of the boardroom. 
It is good to see that many see digital transformation as an opportunity. 
5
When our survey asked what other words or statements that come to mind, top mentions included not 
only opportunity but also future, customer, positive, necessary, essential and priority. It’s interesting to see 
‘costly’ as the highest negatively associated word. Digital Transformation should be seen as an investment 
in an organisation’s future rather than a cost to be kept down. However, the term ‘digital’ can all too often 
be seen as synonymous with the IT department alone. If not viewed as an organisation-wide investment 
and purely associated with one cost centre, digital transformation programmes are likely to be stunted 
before they have a chance to deliver the true value they are capable of delivering to organisations.
Here are a couple of perspectives shared by those leading the digital charge:
‘We see digital transformation as a process involving the automation and refining of 
processes to deliver better services to clients and candidates. It also offers the opportunity to 
widen our reach and connect through a variety of channels. It enables recruiters to deliver 
value through good data-driven intelligence. The days of cold calling are over!’
UK Managing Director, Professional Talent Recruitment company 
‘Digital is simply a lever in the toolkit for improving the experience of both the staff and the 
customers. It is an opportunity for us to repurpose existing market solutions, rather than 
reinvent the wheel in-house. Our big focus is on people and not technology’
Head of IT Partnership Management, UK Utilities company 
In conclusion, the perceptions of digital transformation are aligned to customers and operations. While this 
is quite natural, organisations need to consider the broader implications of digital transformation and how 
it can impact all aspects of an organisation, from empowering employees, to transforming products and 
services, and creating new business models for evolving markets.
6
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Words that come to mind around digital transformation
7
2.
The Case 
for Digital 
Transformation
8
This section looks beyond the high-level vision and attempts to identify 
the drivers that have triggered digital transformation initiatives. 
Nearly half of all business leaders think their business model will cease to exist within the next 5 years. This 
is a sobering thought. When you consider the scale of the organisations surveyed, this suggests real change 
is coming to major parts of the UK economy.
However, there are some respondents who believe their own organisation’s business model will outlive the 
sector model. These people might well be in disruptor-organisations. Or they might be oblivious to the 
reality that their very own ‘Kodak moment’ is imminent. 
How long does your current business model have left to run?
Financial Services
Retail
Other Services
Manufacturing
% of respondents (private sector only)
No more than 2 years
Between 2 and 5 years
Between 5 and 10 years
At least 10 years
Indefinitely
Don’t know
14%
15%
15%
7%
23%
10%
11%
13%
36%
27%
16%
15%
12%
16%
24%
15%
14%
18%
14%
32%
18%
16%
12%
9%
9
The previous question demonstrated that the threat of disruption is real. This question shows many 
organisations believe it is going to happen very quickly. Half of all respondents expect sector disruption 
to some degree in the next two years, with financial services respondents demonstrating the highest level 
of anxiety (65%). Given recent changes to the UK economy it’s surprising to see a relative lack of concern 
from those in manufacturing (27%), which could suggest they are confident they already have the business 
models in place to succeed in the future.
How disrupted do you think your industry sector will be, in the next 2 years?
Where will the biggest disruption impacts come from?
Financial Services
Financial Services
Retail
Retail
Other Services
Other Services
Manufacturing
Manufacturing
Public Sector
% of respondents
% of respondents (private sector only)
Significantly
Established companies from own sector
None – we see ourselves as a disruptor
None – we see ourselves as a disruptor
Established companies from adjacent sectors
New entrants
Moderately
Not significantly disrupted
Too early to say
Don’t know
Don’t know
19%
27%
46%
33%
28%
17%
13%
14%
19%
26%
4%
7%
10%
19%
8%
16%
9%
17%
9%
15%
34%
39%
10%
30%
18%
12%
28%
36%
13%
22%
10%
25%
38%
16%
56%
9%
41%
9%
33%
16%
3%
3%
4%
6%
6%
8%
4%
6%
8%
10
It’s clear the threat of disruptors entering the market and taking significant market share is felt most keenly 
in financial services (33%). That said, the percentage is still relatively low considering the extent of the 
threats coming from innovations such as blockchain and the fintech community.
Whilst previously financial services organisations may have acquired disruptors to counter threats, this is 
not always possible today. Fintech players know the value of what they are sitting on, so major financial 
services companies are having to treat single figure headcount startups as peers. 
While the majority of respondents from other sectors see organisations within their own industries as being 
the biggest disruptive threats, it’s interesting to note that only a very small proportion consider themselves 
to be a disrupter. Given the previous finding that a large proportion of organisation’s business models will 
cease to exist in 5 years, this suggests an acceptance of their own fate.
% of respondents
What re the main drivers behind digital transformation initiatives?
Improve customer/
stakeholder experience
Exploit new  
game-changing  
technologies
Prevent disrupts taking 
market share
First mover advantage
Empower employees
24%
24%
10%
20%
14%
14%
17%
16%
17%
Other Services
Financial Services
Public Sector
Manufacturing
Retail
Optimise  
operations (efficiency)
Survive as a  
business/organisation
Transform  
products/services
Develop new 
revenue streams
24%
23%
21%
21%
Not asked
Not asked
Not asked
68%
67%
57%
43%
51%
61%
61%
56%
58%
58%
51%
52%
38%
42%
32%
50%
34%
39%
36%
44%
42%
37%
36%
29%
31%
39%
24%
26%
29%
In the survey, we asked respondents what the main drivers are for digital transformation initiatives within 
their organisations. Broadly speaking, choices focussed on customers and operations scoring the highest 
echoes the findings we have seen so far. What’s striking is that survival as a business is seen as a key driver 
across the majority of industries, showing just how important digital transformation is perceived to be to 
the future success of organisations.
11
The relatively low focus across all sectors on employee empowerment is a concern. Organisations that place 
employee empowerment at the heart of their business transformation will naturally attract and retain the 
best talent, who in turn will deliver the best customer experience, devise the best products and identify the 
most innovative ways to optimise business models.
The ranking of ‘first mover advantage’, whilst seemingly low, could have a strategic impetus behind it. Being 
first in market at the expense of being the best is no longer a model for success in a world where immediate 
feedback and unparalleled choice have given power back to the user.
So what do our digital transformation leaders think:
‘We believe our industry is ripe for disruption. We are concerned about potential threats. 
Though we work in a very traditional market, and so we see ourselves as sitting on a 
smouldering platform. That said, we are urgently looking at ways in which we can convert 
the data generated by our interventions into customer value. Our vision is to be a data-
driven organisation’ 
Digital Transformation Director, UK and Global Engineering Consultancy 
‘All the big players are reading from the same book. So disruption is likely to come from 
a new player. Over 50% of our revenues come from maintenance. Should clients choose 
to outsource the associated analytics to an organisation better placed in respect of data 
scientists, then we could see the guts of our business going elsewhere’
Global Head of Strategy and Architecture, UK and Global Aerospace company
To conclude, there appears to be a split among respondents. Around half understand there are drastic 
changes on the horizon but half seem to believe it isn’t happening anytime soon. For some, they feel like 
we live in an age of urgency, for others it seems to be an age of innocence.
So how do these overarching perceptions of disruption translate to the overall strategic intentions of the 
respondents’ organisations?
12
13
3.
Strategic 
Approach
14
For an organisation to achieve its vision, it must have a strategy that 
realistically reflects what needs to be done, and is woven into the 
activities and minds of all those involved. The same is true for digital 
transformation strategies. 
When it comes to a clear or formal digital transformation strategy, financial services respondents are in a 
league of their own, with almost two-thirds (64%) stating that such a strategy is in place. This is perhaps 
understandable given the external threats they perceive are endangering their industry. Even a sector  
that has such a high degree of regulation and legacy technologies has the ability to innovate if the 
motivation is there. 
However, looking more broadly across other sectors, respondents that believe they have a clear strategy in 
place are in the minority. This is a major cause for concern – such organisations might well be vulnerable if 
they are not a disruptor or don’t have a plan to avert disruption. 
Do you agree/disagree your organisation has a clear or formal digital 
transformation strategy?
Financial Services
Retail
Other Services
Manufacturing
Business leaders
Public Sector
CIOs and IT leaders
% of respondents (private sector only)
Strongly agree
Strongly agree
Agree
Agree
Neither agree nor disagree
Neither agree nor disagree
Disagree
Disagree
Strongly disagree
Strongly disagree
Don’t know
Don’t know
14%
50%
16%
8%
9%
10%
9%
11%
31%
32%
24%
26%
27%
26%
12%
10%
15%
4%
8%
11%
16%
14%
11%
11%
37%
18%
17%
4% 12%
12%
35%
21%
14%
5% 12%
21%
44%
20%
8%
4% 4%
3%
15
Amongst those who stated their organisations have a strategy in place, the majority have had a plan in 
place for 2 years or more, with a significant minority stating their plans have been in place for over 4 years. 
At first this may seem surprising – but take into consideration the earlier focus on customer experience 
and operational efficiency. In this context this time line would seem more understandable. But it begs the 
question as to whether respondents truly understand the full impact digital transformation programmes 
can have across the entirety of their organisations. To date, have they simply been pursuing a strategy of 
‘Digital Transformation Lite?’
Notably, the CIOs and IT leaders feel more confident about the existence of a digital transformation plan 
than business leaders. Possibly the CIOs or IT function have a better sense of the technology-driven threats 
and opportunities – or do they think that their IT strategy equates to their organisation’s entire digital 
transformation strategy?
How long has a digital transformation programme been in place?
Financial Services
Retail
Other Services
Manufacturing
Public Sector
% of respondents (those with a digital transformation strategy)
In place, but yet to start
Less than one year
1-2 years
2-3 years
3-4 years
Over 4 years
Don’t know
5%
8%
8%
13%
28%
19%
16%
20%
19%
29%
11%
16%
13%
8%
5%
13%
28%
24%
16%
16%
10%
15%
20%
22%
15%
9%
10%
15%
12%
20%
27%
4%
7%
16
Looking at where the digital transformation strategy originates, there is a strong sense that it comes from 
the top. But the influence that the IT department has to play is a source of dispute – 31% of CIOs and IT 
leaders believe their department has been instrumental in the development of strategies compared to just 
6% of business leaders.
In respect of the outlier originators, there has been a perception for some time that Marketing is the driver 
of digital strategy and as such, the CMO has been seen as a suitable candidate to lead the digital charge.  
Its relatively low level of representation may therefore seem surprising. However, it is important to 
distinguish between digital strategy and digital marketing as they are not one and the same.
Where does the digital strategy originate?
Financial Services
Retail
Other Services
Manufacturing
Business leaders
Public Sector
CIO and IT leaders
% of respondents (those with a digital transformation strategy)
Board-level
Board-level
Finance
Finance
Senior leadership (below board)
Senior leadership (below board)
Marketing
Marketing
CIO or IT dept.
CIO or IT dept.
Other function
Other function
Operations
Operations
Don’t know
Don’t know
58%
52%
56%
51%
62%
26%
19%
19%
30%
25%
5%
10%
3% 3%
15%
16%
9%
2%
5%
13%
5%
61%
23%
6%
6%
48%
17%
31%
2%
17
Whilst it is encouraging to see that the majority of respondents view digital transformation as an 
organisation-wide initiative, there is some cause for concern that a large proportion do not view this 
strategy as extending to their supply chain, customers or end-consumers. No organisation is an island and 
each of these play a crucial part in its ecosystem. If its rate of change is not matched by those surrounding 
the organisation, much of the potential value digital transformation can bring will be lost. 
How broadly does your digital transformation strategy extend or apply?
Financial Services
Retail
Other Services
Manufacturing
Business leaders
Public Sector
CIO and IT leaders
% of respondents (those with a digital transformation strategy)
For one or more functions/depts
For one or more functions/depts
Organisation-wide, internally
Organisation-wide, internally
Both internally and externally
Both internally and externally
Don’t know
Don’t know
11%
13%
13%
45%
44%
49%
38%
38%
38%
6%
5%
53%
42%
5%
3% 45%
38%
3%
9%
47%
39%
5%
15%
36%
47%
2%
18
The perception that so many leadership teams still rely on gut feeling, which is significantly higher within 
the public sector that in other sectors, rather than making decisions that are grounded in data and 
analytics, is alarming. Is this because these leaders have got to where they are largely based on judgement 
and instinct and so struggle to change habits of a lifetime or is it simply the case that despite the power of 
data, many organisations still struggle to access good quality data and make sense of it?
 
What do the digital leaders say?
‘In transitioning from products to services, there is always the danger of getting stuck in 
the middle. In order to avoid that we are running our services businesses as a separate 
operation to our traditional products business’
SVP UK Sales, Energy Management company
‘Our strategy is driven by the needs of our customers. I actively keep pace with the changing 
needs of the market by both keeping in touch with our clients and reading up, e.g. via blogs, 
on what is deemed important by the market’
CEO, UK Creative Design Services company 
In summary, digital transformation strategies, even when in place, appear to still be in their infancy, with 
many internally-focused and not data-driven. Perhaps the term ‘digital’ itself is the cause for confusion, 
with people attaching the term to the IT department and therefore focusing on internal practices. In reality, 
organisations should be viewing this as business transformation in a digital world. In this context, the need 
to bring suppliers, customers and end-consumers much more into focus is much more apparent. 
Are most strategic decisions based on data and analytics?
Financial Services
Retail
Other Services
Manufacturing
Public Sector
Strongly agree
Disagree
Agree
Strongly disagree
Neither agree nor disagree
Don’t know
8%
7%
8%
8%
10%
32%
38%
31%
31%
25%
30%
22%
24%
27%
20%
9%
14%
12%
11%
10%
4%
7%
6%
4%
13%
17%
12%
18%
19%
22%
% of respondents
19
4.
Leadership
20
If digital transformation strategies are to move from infancy to maturity, 
a digitally literate leadership team is vital. Given the short lifespan that 
many respondents perceive their current business models have left to 
run, the need for leaders to make the right strategic decisions that will 
keep their organisations competitive in ever more disrupted markets are 
paramount. So do organisations currently have appropriate leaders in 
place to make these decisions?
Does your organisation have a digitally literate senior leadership team?
Financial Services
Retail
Other Services
Manufacturing
Business leaders
Public Sector
CIO and IT leaders
% of respondents
Strongly agree
Strongly agree
Strongly disagree
Strongly disagree
Agree
Agree
Don’t know
Don’t know
Neither agree/disagree
Neither agree/disagree
Disagree
Disagree
16%
14%
12%
13%
7%
43%
24%
32%
28%
28%
16%
21%
17%
21%
28%
13%
17%
18%
17%
15%
4%
12%
8%
8%
9%
8%
12%
14%
13%
14%
14%
29%
20%
17%
8%
12%
17%
51%
12%
10%
7% 4%
21
In an era of great market disruption, it’s a real concern that almost half of business respondents feel that 
their leadership is unwilling to disrupt their own business in order to grow and be more competitive in the 
future. This suggests a high degree of indifference and inertia.
Traditional business models effectively condense decision-making to a handful of people. As such, it’s 
important to choose these people wisely. The survey data suggests that in the digital era, this is not 
necessarily happening. There is a high percentage of senior leadership teams who are not perceived as 
digitally literate. This implies that many of our leaders in the UK today may be leading their people on a 
path that is increasingly deviating from the reality of the market today. 
There is a clear discrepancy between the CIO and IT leaders and business leaders as to whether they have 
a digitally literate leadership team. Possibly they are judging digital leadership on their IT skills, rather than 
a broader digital competence? In any case, the level of apparent digital illiteracy is significant, particularly 
given the extent to which our focus sectors are so data-driven.
It’s also interesting that only 35% of public sector respondents believe they have a digitally literate 
leadership team when concepts such as e-government and transformational government have been 
around for more than a decade. This highlights some of the systemic problems faced by public sector 
organisations in embracing digital transformation. 
Is your leadership team willing disrupt existing businesses?
Financial Services
Retail
Other Services
Manufacturing
% of respondents (private sector only)
Strongly agree
Strongly disagree
Agree
Don’t know
Neither agree/disagree
Disagree
17%
39%
21%
10%
4%
4%
8%
13%
42%
18%
11%
11%
14%
33%
19%
15%
14%
5%
12%
42%
14%
13%
4% 13%
22
As we identified earlier, the recognition of the task at hand for financial services organisations could be 
one of the reasons why they are more likely to have digital leaders in place. What is of more concern is the 
absence of digital leaders in sectors that are often driven by technical innovation and data.
Does your organisation have any senior digital leader roles in place?
Financial Services
Retail
Other Services
Manufacturing
Business leaders
Public Sector
CIO and IT leaders
% of respondents
Yes, one or more
Yes, one or more
No, though planned/considered
No, though planned/considered
Don’t know
Don’t know
No, not currently
No, not currently
61%
45%
42%
36%
38%
12%
10%
12%
10%
10%
13%
16%
21%
36%
20%
14%
29%
24%
19%
32%
11%
20%
23%
46%
63%
12%
14%
11 %
23
Who does the most senior digital leader report to?
Financial Services
Retail
Other Services
Manufacturing
Business leaders
Public Sector
CIO and IT leaders
% of respondents (those with one or more senior digital leader)
CEO, MD or equivalent
CEO, MD or equivalent
CFO/Finance leader
CFO/Finance leader
CIO
CIO
CMO/Marketing leader
CMO/Marketing leader
COO/Operations leader
COO/Operations leader
Don’t know
Don’t know
IT leader (non-CIO)
IT leader (non-CIO)
Other function
Other function
51%
47%
47%
39%
52%
11%
15%
13%
3%
6%
7%
8%
9%
18%
2%
3%
6%
3%
15%
2%
2%
4%
6%
4%
2%
4%
3%
3%
2%
11%
6%
3%
6%
4%
13%
14%
13%
27%
15%
53%
7%
6%
4% 4% 3%
7%
15%
42%
25%
19%
5% 1%
4%
5%
For those organisations that have digital leaders in place, it is healthy to see that many report into the CEO. 
But the trend needs to accelerate so that the digital transformation strategy becomes the business strategy, 
and thus the CEO becomes the owner. The level of ‘don’t knows’ is significant. It suggests that for many, 
digital transformation is an isolated project happening somewhere else in the business.
There is a large discrepancy between business leaders and CIO and IT leaders as to where digital leaders sit 
within their organisation. While 44% of respondents with IT responsibilities see the leadership sitting within 
their team, only 13% of business leaders agree.
24
What do our digital leaders say?
‘Our leadership is getting there in respect of digital savviness. There is an active programme 
in place to help our leaders keep abreast of trends. We see digital not so much as a role, but 
more of a leadership competence.
Our leaders need to balance risk taking against the needs of a very conservative customer 
base, that is typically look forward in terms of 20-year time horizons’
SVP UK Sales, Energy Management company
 ‘The company is quite risk-comfortable. This is reflective of the youth of the organisation 
– average age 30 years old. However, we have become slightly less risk-comfortable, given 
the economic uncertainty. But we recognise that this is the new normal’
UK Managing Director, Professional Talent Recruitment company 
In summary, it’s encouraging that many organisations have both a digitally literate leadership team 
and digital leaders working at board level. However, it’s still a concern that a large proportion of those 
organisations are unwilling to disrupt their own businesses to grow and compete in the future. So despite 
a belief that digital literacy exists at leadership level, is there still a lack of understanding about the full role 
technology can play in the transformation of a business?
25
5.
Technology
26
While technology has long been a core component of the infrastructure 
of business, in order for it to shape business strategy there has been 
a real need to translate technical discussions into language the board 
understands. This has manifested itself in more recent years by reducing 
the importance of technology competence in the role of the CIO. 
Business leader first, technology leader second.
However, a swathe of new technologies has arrived. All with almost unlimited potential, and most with 
a price point that makes their commercialisation feasible. There has never been a time when strong 
technology leadership was so important. Not just in the CIO, but in all the leadership roles. 
Looking at which technology trends will be most prominent over the next three years, the relative 
significance of the technologies is generally reflective of their maturity, which is to be expected. However, 
it’s interesting to note that broadly speaking all the sectors are within a point or two across all technology 
trends. Where previously we have seen a significant variance between public and commercial sectors, it’s 
interesting to note that such an innovative and nascent trend such as virtual reality/augmented reality (VR/
AR) is generating as much excitement among public sector respondents as it is among other industries.
The fact that financial services are most bullish around the significance of cloud services over the next three 
years is interesting and indicative of a market where regulatory authorities are continuing to gain trust in 
the value that cloud services can deliver. 
How significant do you expect these technology trends over the next 3 years?
Financial Services
Retail
Manufacturing
Public Sector
Other Services
Analytics/
Big Data
2
3
4
5
6
7
8
Cloud 
Computing
Internet of 
Things (IoT)
Sensors  
and M2M
AI and machine 
learning
Smart digital 
assistants/bots
VR/AR
Robots
3D printing
Respondents rated each technology rated on a 1-9 scale where 1 = ‘not significant at all’ and 9 = ‘extremely 
significant’. Mean scores shown (don’t knows excluded)
27
We then asked which of these technologies the organisation was actively using or experimenting with. 
Again, there is no surprise that analytics & big data, and cloud, lead the way, given the relatively mature 
nature of these technologies. However, it is surprising to note that the retail sector does not have the same 
appetite as financial services in this respect.
VR and AR have the potential to significantly upgrade the customer experience and worker productivity. It 
is surprising to see the public sector leading the charge in this respect. Smart digital assistants and bots can 
also provide an enhanced customer experience, yet the public sector is the least active in this space. 
The power of algorithms have long been recognised by banks and other financial services companies so 
it is perhaps unsurprising that respondents displayed an increasing interest in machine learning over the 
next three years. However, it is surprising to note the retail sector’s indifference, given its power to predict 
consumer behaviour and thus its ability to enable forward-thinking retailers to anticipate and capitalise on 
evolving consumer habits.
Which of these is your organisation actively using or experimenting with?
Financial Services
Retail
Manufacturing
Public Sector
Other Services
Analytics/
Big Data
0%
10%
20%
30%
40%
50%
60%
70%
Cloud 
Computing
Internet of 
Things (IoT)
Sensors  
and M2M
AI and machine 
learning
Smart digital 
assistants/bots
VR/AR
Robots
3D printing
% of respondents (don’t know excluded)
28
When it comes to the security of cloud services, there is a significant disparity between the private and 
public sector. Almost three quarters (70%) of commercial organisations believe cloud services to be at least 
as secure as their in-house systems. This drops to 43% for respondents in the public sector which has the 
highest number (38%) believing that their in-house systems are more secure. Recent moves to the cloud by 
major government departments would suggest a growing confidence in cloud security but the message is 
yet to permeate throughout the sector.
In conclusion, the use of big data and analytics and cloud technologies is expected to continue growing 
across all sectors in the years ahead. However, what is clear is that many organisations are starting to 
experiment with newer innovations such as VR and AR, chatbots and machine learning. These technologies 
are often associated with startups who lead the charge on experimentation and establishing new business 
models. But the respondents to this survey represent much larger organisations and they are clearly keen to 
explore the value these nascent technologies can deliver. Perhaps there is a desire to counter the threat of 
disruptors after all.
Do you think the security of cloud services available in the UK today are better 
or worse than your existing in-house systems?
Financial Services
Retail
Other Services
Manufacturing
Business leaders
Public Sector
CIO and IT leaders
% of respondents (those without any in-house systems excluded)
Probably better 
than in-house
Probably better 
than in-house
Probably just as  
good as in-house
Probably just as  
good as in-house
Don’t know
Don’t know
Probably worse 
than in-house
Probably worse 
than in-house
22%
38%
24%
17%
31%
28%
13%
28%
19%
44%
19%
18%
17%
35%
23%
25%
18%
25%
38%
20%
19%
35%
23%
22%
25%
46%
24%
5%
29
6.
People
30
One of the great ironies of the fourth industrial revolution is that it is 
not only about technology, but also about people. In a world where 
technology is ‘on tap’ it will be increasingly difficult to gain a competitive 
advantage through technology differentiation alone. The difference will 
come from the creative individuals whose innovative thoughts lead to 
differentiated services that command a healthy margin in the market. 
So the logic follows that organisations should be developing and 
empowering their people to evolve from task-oriented workers  
to innovators.
Whilst organisations are implementing new technologies to improve collaboration and there are 
efforts in place to drive organisational-wide cultural change programmes, empowering employees and 
decentralising decision-making ranks worryingly low in the list of actions taking place. Given the fluidity in 
the market for talent, organisations need to ensure they are meeting the needs of their employees or they 
will go elsewhere. Indeed, with Millennials now accounting for a significant portion of the UK workforce, 
it is worth reinforcing they have high expectations in respect of what work offers them, and have no 
compunction leaving an organisation because the opportunity is better next door.
The financial services sector shows a degree of boldness regarding innovation and experimentation. It  
will be interesting to see how far this can be taken in respect of service innovation in such a heavily 
regulated industry. 
% of respondents
Is your organisation taking any actions to change the workplace and culture?
New technology to improve 
employee collaboration
Empowering employees, less 
centralised decision-making
Don’t know
None of these
Other Services
Financial Services
Public Sector
Manufacturing
Retail
New technology to improve 
external collaboration
Organisation-wide cultural 
change programme
More innovation/
experimentation
Hiring more people with 
digital skills/expertise
41%
28%
42%
38%
33%
31%
26%
26%
34%
30%
17%
34%
21%
21%
28%
33%
19%
22%
22%
22%
22%
33%
21%
19%
21%
24%
18%
14%
12%
11%
10%
11%
16%
10%
22%
14%
11%
11%
21%
17%
31
We asked respondents about how attractive they think their workplace is for Millennials. For the purposes 
of the survey we defined this as people between the ages of 18 and 35. By this definition, Millennials already 
represent over a third of the UK workforce. 
A significant percentage seem to believe they have this nailed. Only around 20% of those in commercial 
organisations think their workplace is less attractive than average, though this rises to more than 25% 
amongst those in the public sector.
The top reasons cited by those who say they are Millennial-friendly include flexible working, a good  
career path & prospects, pay & benefits, use of the latest technology or being ‘a digital company’,  
culture and being an ethical and responsible employer. A significant number also say they have specific 
initiatives to engage and recruit younger workers, or that they have a strong graduate and apprentice 
recruitment programmes.
For those who think their workplace is less attractive than average the top reasons cited include being in an 
unglamorous industry sector, or the perception of being somewhat old-fashioned and unexciting. Other 
top mentions include being behind on technology, organisational inflexibility, and being cautious and risk-
averse. Some respondents also mentioned lack of flexible working options or poor work/life balance. 
Is your organisation more or less attractive than the average UK workplace,  
for Millennials?
Financial Services
Retail
Other Services
Manufacturing
Public Sector
% of respondents
Definitely more attractive
Definitely less attractive
Probably more attractive 
Don’t know
About average
Probably less attractive
13%
17%
18%
17%
9%
32%
20%
27%
30%
22%
29%
28%
29%
24%
31%
16%
13%
14%
12%
16%
5%
10%
4%
10%
10%
5%
13%
8%
7%
11%
32
Here are some more enlightened perspectives:
‘We recognise the value in young talent, what with their unconstrained perspectives. This 
does need to be tempered with experience of the older workers. Nonetheless, their thoughts 
are generally considered to be of high value’
Digital Transformation Director, UK and Global Engineering Consultancy 
 ‘We are well placed to witness what constitutes talent management best practice. 
Money is a short term incentive. Flexibility in how people work is highly valued. People 
also appreciate the investment our organisation makes in terms of their professional 
development’ 
UK Managing Director, Professional Talent Recruitment company 
To sum up, in some instances there appears to be a real gap between best practice and actual practice. 
Organisations that do not recognise the importance of employee empowerment have probably not made 
the mindset transformation required to operate in the digital economy. This puts those have made the 
leap at a strong advantage. And given that the talent pool is in short supply, this will put the long-term 
prospects of the old school players into question.
33
7.
Progress
34
Up until now the report has focused mainly on perceptions and opinions 
around digital transformation. This next section takes a look at the 
tangible actions in place and subsequent progress being made.
Overall, respondents from financial services report more actions taking place than those in other sectors. 
The big push on customer experience, especially in financial services and retail, is very much in keeping 
with sentiments earlier in the report. However digital transformation is much more than creating a  
digital façade. 
The notion of IT agility is not new. That it has been around for over two decades could suggest a 
challenging environment that IT leaders have had to operate within. Many financial services organisations 
will have a challenging balancing act in respect of embracing an agile approach to IT, and meeting the 
governance needs of the regulators. It is interesting to see people-related initiatives ranking relatively 
highly, though still in only a minority of organisations. Acquisition and joint venture activity is cited by 
around one in six of those in financial services and the other services sectors. The number of organisations 
across all sectors embarking on this activity seems low. Acquiring new businesses can be a smart way to 
acquire new business models, and new kinds of experience and skillsets.
% of respondents
What actions is the organisation taking now to address or exploit digital?
Creating better  
customer experiences
Acquisitions or joint  
ventures around digital
Don’t know
None of these
Other Services
Financial Services
Public Sector
Manufacturing
Retail
Creating more agile IT
Changing  
organisational culture
Improving employee 
collaboration
Creating a team to 
experiment with  
new technologies
Creating radically different 
products or services
Appointing senior  
digital executives
58%
48%
40%
28%
30%
50%
43%
34%
36%
43%
32%
28%
28%
24%
33%
25%
25%
33%
23%
29%
38%
26%
20%
20%
14%
22%
18%
18%
13%
30%
19%
17%
26%
16%
11%
16%
8%
16%
11%
6%
2%
6%
9%
10%
14%
12%
20%
20%
20%
29%
35
For those organisations embarking on acquisitions and joint ventures, the most common cited drivers 
are to generate new sources of revenue and to gain digital technology. Relatively few see elimination of 
potential competitors, or to act as a hedge against possible disruptors, as key reasons. 
It is notable that up to a fifth of leaders in commercial organisations say they simply ‘don’t know’ whether 
any of these actions are taking place – even higher amongst those in the public sector. Might this be due to 
poor communications, or are they just not seeing the benefits? 
What are the main reasons for acquisitions or joint venture activity?
To generate new revenue streams
To gain digital technology to apply to existing business
To acquire digital skills (people)
To survive as a business/organisation
To eliminate potential competitors/disruptors
To act as a hedge against possible disruptors
42%
41%
30%
24%
17%
16%
% of respondents (those who mentioned acquisition/JV activity)
36
When asked about potential barriers to successful transformation, the leading causes are all indicative of an 
industrial era model – slow decision making, risk aversion, legacy investments and poor IT agility. So it is no 
surprise they are ranked highly. This response suggests these issues are seen as getting in the way of digital 
transformation, as opposed to being the very things digital transformation needs to address. 
Interestingly, the relatively low culture change response suggests that the workforce is generally not seen as 
obstructing the transformation. However, a lack of management sponsorship is a fatal condition, and may 
be indicative of a digitally illiterate leadership team. The percentage of respondents citing this as a barrier 
seems surprisingly low, given the leadership findings covered earlier.
% of respondents (private sector only)
What are the potential barriers to successful digital transformation?
Slow decision-making / 
excess caution
Unable to attract talent
None of these or  
Don’t know
Too much focus on pure 
technology
Other Services
Financial Services
Manufacturing
Retail
Lack of agility in IT
Investments in  
legacy systems
Unwilling/unable to  
change culture
Unwilling/unable to rethink 
business models
Privacy/security 
considerations
Knowing which digital  
trends to respond to
Lack of management 
sponsorship
33%
28%
32%
33%
39%
35%
29%
26%
38%
29%
24%
21%
19%
26%
21%
18%
14%
13%
17%
15%
15%
15%
15%
21%
4%
15%
18%
14%
23%
16%
14%
10%
13%
12%
8%
8%
8%
11%
5%
8%
11%
15%
23%
27%
37
Amongst public sector respondents, budget constraints are cited most often as a potential barrier 
(note, we did not present this response option to respondents working in private sector organisations). 
While budgetary pressures are clearly important and very real, it’s possible some leaders in public sector 
organisations see digital transformation more as a cost than an investment.
It is interesting to see that organisations in the public sector feel relatively unburdened by legacy systems, 
given that some were amongst the earliest adopters of large-scale custom IT systems. 
What are the potential barriers to successful digital transformation (public sector)?
Budget constraints
Unwillingness to radically rethink how we operate
Slow decision-making or excess caution
Privacy/security considerations
Lack of agility in IT infrastructure/operations
Too much focus on pure technology
Unwillingness/inability to change culture
Unable to attract talent
Legislative and regulatory considerations
Lack of senior management sponsorship
Investments in legacy systems 
Knowing which digital trends to respond to 
None of these or Don’t know
38%
16%
34%
15%
26%
14%
22%
11%
18%
10%
9%
1%
5%
% of respondents (public sector only)
38
We asked leaders whether they think they’re ahead or behind their peers in terms of digital transformation. 
It is a relief to see there is some degree of caution in terms of declaring their organisations as being 
significantly ahead in respect of digital transformation. Given the issues flagged in this report, we might 
expect the ‘behind’ brigade to be much larger. But with the lack of a common definition for digital 
transformation, this may be more based on gut feeling than underpinned by any real benchmarking.
More worrying is the significant minority of leaders who say they have no perception of where they sit in 
respect of their relative progress. These people might appear hermetically sealed from the cold winds of 
global digital reality. 
Do you think you’re ahead or behind, in terms of digital transformation?
Financial Services
Retail
Other Services
Manufacturing
Public Sector
% of respondents
Significantly ahead
Commercial sectors asked relative to ‘existing competitors in your industry sector’
Public Sector respondents asked relative to ‘other UK organisations in your sector’
Somewhat behind
Somewhat ahead
Significantly behind
Don’t know
Neither ahead nor behind
7%
5%
4%
3%
1%
35%
28%
31%
16%
25%
30%
18%
26%
20%
39%
9%
15%
15%
15%
18%
14%
27%
16%
33%
13%
5%
7%
7%
14%
5%
39
What do our transformation leaders think?
‘In taking our digital journey, we have learnt that the trick is in getting the correct balance 
between local and global initiatives. And to avoid trying to do everything yourself’
UK Managing Director, Professional Talent Recruitment company 
‘We have very clear goals and deadlines. Digital transformation is not an activity that will 
just roll on and on. We see it as a project that underpins our goal to double in size by 2021’
Digital Transformation Director, UK and Global Engineering Consultancy 
The findings in respect of progress suggest that whilst many organisations have embarked on a digital 
transformation journey, the extent to which they are braced for radical change appears relatively low. There 
is a sense that many organisations are tinkering around the edges of their business model. 
Possibly this is a characteristic of short-termism. A CEO who boosts the share price because their customers 
are delighted with the new mobile app will be rewarded accordingly. The CEO who realises that the 
changes required need to be profound may be sacrificing their own track record to make their successor 
appear the hero.
It’s likely we will witness a number of digital transformation resets before many organisations’ plans reflect 
the deep business reengineering required to thrive in the fourth industrial revolution.
40
41
8.
Society
42
The transition to the fourth industrial revolution is not just an issue for 
commercial, public and non-profit sector organisations. Technology-
enabled workers are also technology-enabled citizens. Augmented 
citizens will have augmented expectations from their governments. 
We asked respondents what impact they think digital transformation will have on UK society over the next 
few years. Security and privacy are widely considered to be a concern. This response seems perfectly natural 
given the extent to which technology has permeated our lives, and the extent to which our personal and 
professional data is on record, so to speak. Major security breaches across both public and private sector in 
recent years add weight to these concerns.
A significant number of respondents believe that digital transformation will make for a more efficient 
society. However, around a third think that older generations of workers will get left behind in some 
ways, rising to over 40% from those in retail. The feeling from some that employees will resist digital 
transformation is broadly in line with the observation noted earlier that culture change is a potential barrier. 
All of these findings suggest a need for government and organisations to do a better job of addressing 
privacy concerns within society, demonstrating how data is used and empowering citizens to take 
ownership of their data. It is important that in these endeavours, organisations are mindful of all groups 
that society is comprised of, ensuring that none get left behind. 
% of respondents
What impact will digital transformation have on UK society over the next few years?
Will raise more concerns 
about privacy/security
Will mainly be a  
force for evil
Manufacturing
Other Services
Financial Services
Public Sector
Retail
Will be a driver of efficiency
Will mean older generations 
will get left behind
Will mainly be a force  
for good
Will generate resistance  
from employees
Will enlarge government
Will shrink government
Very little - just a latest  
fad, soon surpassed 
48%
47%
46%
51%
56%
39%
29%
24%
22%
43%
41%
30%
30%
17%
32%
32%
26%
54%
39%
42%
30%
19%
34%
34%
22%
8%
5%
5%
5%
8%
8%
14%
7%
7%
8%
8%
2%
2%
2%
6%
4%
6%
6%
1%
1%
43
Conclusion
44
The research underpinning this report is the most extensive to 
date in the UK. It provides a unique insight into the state of digital 
transformation in the country. We see this as comprising organisations 
that are in three distinct groups: 
Innocence
The findings reveal a high degree of innocence in respect of what is driving the need for digital 
transformation. There is a sense that the seismic changes and volatility we are experiencing today are really 
nothing more than business as usual, just a bit faster.
There seems to be little realisation that the power is shifting away from the employer to the talent. New 
business models such as collaborative consumption are generating value out of data. New startups are 
wielding economies of scale, crowdsourcing and utility services to mix it successfully with the incumbents. 
Refining one’s existing business processes is not a sufficient or appropriate response. 
If established organisations are going to make the transition, both business and IT leaders need to fully 
understand how the world is changing, and how they can capitalise on the changing world. 
Inertia
Invariably organisations that have enjoyed success because one set of circumstances gave them a 
competitive advantage, or even a monopoly, are not necessarily designed to reinvent themselves on a 
regular basis. Today, at best, most organisations can hope for transient dominance. This means that the 
focus of business in many instances is establishing where the next cashflow stream lies.
The report flags a number of tensions that are serving to fuel this inertia. Digital illiteracy in the leadership, 
no real sense that survival is at stake and gut-based decision making come to mind. There is definitely a 
sense that leaders feel the need to change, but that burning platforms are perceived as a problem for  
other sectors. 
A big focus on budgets is indicative of a failing business model. When businesses come to a close their 
margins tend to gravitate to zero. A way to prop up the business is to focus on driving out costs to  
re-engineer the margin. A focus on cost savings rather than innovation is an indicator that the game is 
coming to an end.
That said, digital economy players are ruthlessly cost sensitive. But they are also ruthlessly curious and 
innovative. They are quick to establish what the market wants, and are quick to modify or kill off a service 
or other initiative where required. This real-time dynamic simply serves to make the industrial era players 
sloth-like in their behaviour. 
Innovation
The survey findings show encourging signs of innovation. However, the indicators are that organisations are 
not necessarily in a hurry to upskill and empower their people, so that innovation is woven into the fabric of 
the organisation. 
There is an emerging school of thought that it may sometimes be better to acquire creative businesses and 
run them in parallel to the existing business model. However, the survey suggests a relative lack of appetite 
for acquisitions or joint ventures around digital.
The bottom line is that the current focus on process refinement needs to be replaced with a strong 
emphasis on innovation.
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Next steps
So what lessons should we take away from these findings? Below we present some areas for consideration if 
organisations are to give their digital transformation journeys the best possible chance of success.
Understand what is driving the need for change
There are certain macroeconomic trends that are impacting the world we live in. Hyper-connectivity 
brought about by new technology has a role to play. As does globalisation, changing demographics, 
energy security, and talent scarcity. The point is to identify what factors affect your market most. 
It would be wise to take a fuzzy view as to where the boundaries of your market lies. Who is your 
actual competition, particularly as data is a key element of your value proposition? Who might be your 
competition tomorrow? 
Ensure your leadership is digitally competent
In order to avoid a ‘blind leading the blind’ situation, having sound digital leadership is key. Keep in mind 
that this is not something that can be delegated to a role. Digital leadership is a competence that all your 
senior leadership team should possess.
Smart organisations will make it a priority to ensure that their CEO is digitally savvy. 
Empower your people
It makes no sense to have access to a large brains trust, yet utilise them as brainless oxen. That model 
worked well when we needed people to act as technology placeholders in the industrial mills. As more 
people start to align their work with their passions (and of course market demand), they will not need 
micro-management. They should be given the latitude to be curious, to experiment, to fail, and to thus 
learn both personally and on behalf of the organisation. 
Empowered, passionate, and competent people have the capacity to help shape the strategic direction of 
the organisation. This is not something to limit to a handful of board members. 
Become data-driven
The majority of the most successful organisations within the digital economy are data-obsessive. They 
will push products and services into the market and study the associated data very carefully. The data will 
tell them whether they have a winner, where to develop or innovate further, or whether to drop the new 
proposition altogether. 
If one thinks of the organisation as a body, developing its senses is critical. Our senses help us as individuals 
to build a model of the environment in which we operate. These senses help us identify opportunities and 
threats. Corporates need to develop similar senses. IoT has a role to play here, as does big data, analytics 
and machine learning. The ability to spot weak signals and act on them might enable organisations to grab 
a large share of a nascent market, whilst its competitors are oblivious to its very existence.
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Be flexible in both strategy and vision
The industrial era was the age of certainty. We could build factories knowing full well that people would 
likely buy the output for years to come. We are now in the age of uncertainty, so we cannot make such 
long term assumptions. Therefore, we need to be agile from a business perspective. Sometimes a new 
opportunity confronts us, and it has such potential that it could well lead to a change of vision. Clearly a 
change of that nature would not be taken lightly.
A potential challenge with being data-driven is that it can flag where a rigid adherence to a well-planned 
strategy appears at variance with the opportunities staring an organisation in the face. That can be 
irritating if the leadership team has fired up the organisation to adhere to the strategy. But irritated and 
wildly successful trumps oblivious and defunct. 
Embrace the cloud
Embracing the cloud is not the risk it once was. Many established organisations have been running their 
business on it for years. By doing so they can free up the cognitive capacity of their IT function to focus on 
matters of higher value.
Cloud services enable organisations to service employees, customers and other stakeholders on the device 
of their choice. Similarly, it allows people to engage when and where it suits them. 
It is sometimes said that all companies are in the technology business in the fourth industrial revolution. 
This is not necessarily true. All companies are in the information and insight business. Let someone else 
worry about the technology infrastructure.
Experiment with new business models
Nobody can safely say that their existing business model is futureproofed. Therefore, organisations should 
always be experimenting with new business models. This needs to be a parallel exercise. It’s a little too late 
to start exploring new business models when the current one has bit the dust.
Business leaders today need to think of themselves as portfolio business leaders. The better their portfolio 
coverage the more likely they will have a successor should their primary business fail. 
Be a bit more paranoid
The day business leaders start to believe their businesses are bulletproof is the day t</p>