Digital disrupters are winning out against their traditional counterparts when it comes to revenue and profit growth, according to a recent CA Technologies global study.
The study, Exploiting the Software Advantage: Lessons from Digital Disruptors, investigated the role of software as a business enabler, and found in today’s application economy digital transformation has reached every aspect of business and is proving to be a key factor of success.
According to the study, exploiting modern technology and communications to transform one or more key aspects of a business has now become a mainstream activity to drive ROI.
In fact, digital transformation is being driven as a coordinated strategy across a majority of organisations (55%), with many projects underway in multiple areas of the company, including customer services, sales and marketing, and product/service development.
As a result, 45% of respondents have already seen measurable increases in customer retention and acquisition from these initiatives and 44% have seen an overall increase in revenue.
“Not all businesses are on equal footing - some are forging ahead, some are getting left behind,” says Otto Berkes, CA Technologies CTO.
“In fact, there are some wide differences in overall effectiveness and maturity of digital initiatives - from significant revenue growth and customer retention to ultimately profits impacting the bottom line,” Berkes says.
Of those surveyed, 14% were defined as ‘digital disruptors’, and others were identified as ‘on their way’.
According to the study, these respondents are already seeing impressive business benefits of embarking on a digital transition, including:
- Increased revenue: Digital disrupters have two times higher revenue growth than mainstream organisations.
- Higher profits: They report two and a half times higher profit growth than the mainstream organisations.
CA Technologies says the strongest verticals are telecom and financial services, while firms with public sector and consumer packaged goods are lagging behind.
“While there are already successful companies who have become digital disrupters, mainstream businesses simply cannot continue with the status quo - they must undergo significant change to fully integrate digital into all aspects of their business,” says Berkes.
However, CA Technologies says the good news for these businesses is that there is a clear set of common traits and behaviours among today’s digital disrupters.
The study found that digital disrupters are:
- Software-driven: Digital disrupters were 3.5x more likely (than the mainstream) to recognise the importance of being a software-driven business (60% vs 17%)
- Advocates for Agile: Disrupters were 2.5x more likely to fully use agile development (77% vs 31%), and in addition- 2.5x more likely to have DevOps broadly in place (70% vs 28%)
- Open to APIs: The study found that leaders were 2x more likely to leverage APIs for internal development (68% vs 34%), and 2.8x more likely to use APIs to enable third party apps (66% vs 24%).
The global online survey of 1,442 senior IT and business executives in 19 countries and was sponsored by CA Technologies and conducted by industry analyst firm Freeform Dynamics in July 2015.
It was augmented by in-depth telephone interviews with key industry executives, according to the company.