Board members as drivers of digitization

Digitization and automation are the most important topics in the steering committees of companies in Switzerland in the current year - this is shown by the swissVR Monitor, which is produced by the swissVR association together with the consulting firm Deloitte and the Lucerne University of Applied Sciences and Arts. In the current survey of around 400 board members, it becomes clear that when it comes to the topic of digitization, companies take a pragmatic approach (91%) and the majority (60%) are convinced that they are already further advanced than their competitors. The latter statement applies to a much greater extent to large companies (70%) than to SMEs (54%). However, the surveyed board members are also somewhat uncertain: Less than one-fifth are fully convinced that their company's board of directors (19%) or executive management (18%) have sufficient expertise and competencies to successfully drive forward the digital transformation.

Board members believe in the opportunities of digitization

The vast majority of respondents are completely (36%) or rather (46%) of the opinion that digitization opens up new business opportunities as well as opportunities for additional sales. Large companies (90%) see this more positively than SMEs (78%). However, digitization also brings risks, for example, it requires high investments and causes additional costs that put pressure on margins and business results: For 15 percent, this statement is fully true, and for 42 percent, it is somewhat true. 69 percent also believe that digital data exchange on the board of directors tends to increase the security risk from cyberattacks. And only a minority of 46 percent of respondents are concerned with potential digitization risks of an ethical nature, such as job losses, discrimination, manipulation or data protection.

Change management critical to success

"These results largely correspond to our experience as consultants for a wide variety of transformation projects. To ensure that the costs of digital transformation do not get out of hand or that projects do not reduce profits for years, clear leadership and assumption of responsibility by the executive board is just as necessary as comprehensive change management and serious project reporting. Furthermore, the board of directors must by no means ignore possible ethical challenges - it is exactly the right body to ask such questions and provide clarification," says Reto Savoia, CEO Deloitte Switzerland.

Digitization encompasses a wide variety of technologies. The respondents rate Big Data and automation as the most important of these (see graphic for details). The provision of storage space, computing power or applications via the Internet (cloud computing) and the networking of physical and virtual objects with the aid of information and communication technologies (Internet of Things, IoT) also have broad significance. Artificial intelligence and mobile computing were still cited as significant topics by more than a third of respondents.

Blockchain important for financial services providers

Technologies are ranked very differently depending on the industry: Blockchain technology remains highly important in the financial services sector (60%), while IoT (61%) and robots (35%) are above average in the manufacturing sector.

"Two digital technologies are clearly in the foreground for most Swiss companies: on the one hand, the collection and evaluation of large volumes of data and the prediction of trends derived from this, and on the other hand, the automation of functional sequences and work processes in order to increase efficiency along the entire value chain. Other technologies such as 3D printing or robots are only of interest to specific industries. The results are a snapshot, because maturity levels and application possibilities of digital technologies develop and change rapidly. Blockchain technology, for example, has not yet been able to fulfill the hopes placed in it - but wider use in a few years is still likely," explains Cornelia Ritz Bossicard, President swissVR.

Digitization is a matter for the boss

According to the swissVR Monitor, the digitization topic is clearly driven from the top of the company: The main drivers are the board of directors as a body (48%), the CEO (46%) and the executive board (43%). All other response options were selected by less than 18 percent. In four out of five companies (79%), digitization is therefore also an integral part of the corporate strategy, and fewer than two out of five companies (17%) have a separate digitization strategy. However, not all companies are reacting quickly enough or taking enough time to address the issue: One-third in each case say that their company is reacting too slowly to the challenges of digitization (31%) or is taking too little time to address the issue (33%).

Pragmatic board members

Prof. Dr. Christoph Lengwiler, lecturer at the Institute of Financial Services Zug IFZ of the Lucerne University of Applied Sciences and Arts and Vice President of swissVR explains: "It is gratifying to see that the boards of directors are dealing with the digital transformation intensively, but also with the necessary pragmatism. A successful digital transformation requires the full support of the board of directors and management, otherwise failure is inevitable. At the same time, however, sufficient space should also be given to initiatives from lower levels of the company. And external impulses such as workshops or further training, as well as new members with digitalization knowledge, can also help a board of directors move forward in terms of digitalization."

More information: www.swissvr.ch