Are Swiss consumer business and industrial companies ready for the digital future?
Zurich, 22 March 2017
The Swiss economy is among the most innovative in the world. Digital transformation and the drive for innovative products and services could be a unique opportunity for Switzerland. The Swiss business location has the potential to take advantage of digitalisation and become significantly more competitive and future-ready. Companies are well placed to meet the requirements and challenges of digitalisation and make the most of the opportunities. The Deloitte industry study ‘Digital future readiness’ shows, which key skills and changes, are needed for companies to facilitate the digital transformation.
The study ‘Digital future readiness – How do companies prepare for the opportunities and challenges of digitalisation?’, conducted by Deloitte in Switzerland, shows that manufacturing, consumer business and industrial companies have already recognised both the need to be prepared for a digital future and the potential associated with it. However, traditional companies – whether large, small or multinational – often do not have a company-wide digital strategy and, where they do, it is often implemented only in some parts. For Swiss manufacturing industry to remain successful in future and continue to grow over the long term despite the strong Swiss franc, growing global competition and greater economic volatility, companies must seize opportunities across the board and involve their employees in making the changes that are needed.
Konstantin von Radowitz, Partner, Head Consumer & Industrial Products, at Deloitte in Switzerland, said: “Digitalisation is a once in a lifetime opportunity for the Swiss economy and affects every single department and function in a company. Swiss businesses are in a good starting position and must question themselves critically what digitalisation means in concrete terms for their company. This will help them identify which structures and processes need adjusting to make the most of digitalisation.”
Alongside new business areas and models, digitalisation also enables closer connections with clients and the development of tailor-made, innovative products and services. Product innovation and developing services in-house are key differentiating factors and future competitive advantages. The results of the study show that Swiss companies must develop the right models and a new culture in order to seize opportunities ahead of international competitors.
To encourage this transformation across the entire organisation, four corporate dimensions that are key to a company’s digital future readiness were identified through in-depth interviews with the participants in the study: Organisation, culture, people and digital environment.
Within the organisation, companies must create the conditions and freedoms needed for an open, digital mind-set that allows “failing forward” in order to be able to react faster and more dynamically. This is why those surveyed see agility and flexibility as the key skills for a successful, future-ready organisational structure. Followed by willingness to learn and qualified staff as well as close collaboration and a multidisciplinary approach through partnerships, co-operation and stronger networking both inside and outside the company, for example with start-ups.
The companies surveyed see openness, curiosity, trust and responsibility as well as cohesion and communication as the key features of a successful, future-ready corporate culture. The senior management need to lead the transformation process and take employees with them on the ‘digital journey’, overcome resistance and enable and promote acceptance, understanding and affinity.
In times of digital change, continuing professional development and training are key ways to foster motivation, enable own initiative and establish a passionate pioneering spirit among employees and to attract the best experts. Companies must set aside old ways of thinking and take on board continuous experimentation and learning from mistakes like a start-up. The ideal employee mix as well as redesigning a sustainable, future-proof workplace using flexible working models are trends already explored in the Deloitte study ‘The workplace of the future’. These will also be increasingly important in future to attract the best talent and facilitate the right working environment for innovation.
Digitalisation turns many things upside down for the manufacturing industry. It is the key to Industry 4.0 and exponential corporate growth. Including the digital environment and using digitalisation breaks apart the traditional business models of manufacturing industry. Digital infrastructure, the use of exponential technologies such as sensors, 3D printing, artificial intelligence or robotics are just as important as partnerships, start-up communities and the inclusion of crowds.
Dr Ralf C. Schlaepfer, industry expert and co-author of the study by Deloitte in Switzerland, explained: “Swiss industrial companies now have all the trump cards needed to seize the opportunities of digitalisation. But a change in attitudes is necessary, and so is the willingness to take calculated risks. Agility and flexibility cannot be taken for granted, they need to be actively nurtured in order to act faster and more dynamically. The digital transformation must be supported by the CEO and management team, while keeping employees on side for the digital journey.”
Securing disruptive innovation outside formal structures
So that change and innovation around the existing business are successful and digitalisation is seen as an opportunity and not as a threat, small innovative units in the form of pilot projects or innovation labs outside the traditional organisation (so-called corporate venturing), separate budgets and a short-term, independent mind-set are required. These will help companies achieve quantifiable success step by step and show everyone in the company the advantages of digitalisation.
Between September and November 2016, 50 Swiss consumer business and industrial companies participated in a survey about their transformation for a digital future and which digital approaches and strategies they were successfully adopting. By February 2017, eighteen face-to-face interviews were also conducted with CEOs, CFOs and presidents of boards of directors. These individuals were asked about key attributes of organisational structure, changes and adaptations in corporate culture, as well as company management and employee training measures that they had identified as crucial to maintaining their future competitiveness in the new digital environment.
The study also refers to some of the findings of the Deloitte survey on growth challenges and opportunities for Swiss manufacturing companies, conducted in 2015 among 393 companies in the Swiss mechanical engineering, electrical engineering and metalworking industry.
This year's study is a continuation of the Deloitte studies Deloitte White Paper on Swiss Manufacturing Industry (2012), Innovation Reinvented (2013) and Industry 4.0 (2014), Growth Opportunities – Strategies for Swiss Industrial Companies (2015).
The full the report Digital Future Readiness is available online.
Deloitte in Switzerland
Deloitte is a leading accounting and consulting company in Switzerland and provides industry-specific services in the areas of Audit & Risk Advisory, Consulting, Financial Advisory and Tax & Legal. With more than 1,700 employees at six locations in Basel, Berne, Geneva, Lausanne, Lugano and Zurich (headquarters), Deloitte serves companies and institutions of all legal forms and sizes in all industry sectors. Deloitte AG is a subsidiary of Deloitte LLP, the UK member firm of Deloitte Touche Tohmatsu Limited (DTTL). DTTL member firms comprise of over 245,000 employees in more than 150 countries.
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