80% of Russian companies’ managers plan to increase their investment in digital transformation in 2019, according to a new study conducted by consulting company DT-Global Business Consulting on behalf of Linxdatacenter.
Top managers of Russian companies would recognize that the digital vector of business development will have priority in the near future, according to the market research. Cloud technologies, e-commerce, advanced IT infrastructure and competent staff will play a notable role in this process.
More than 60% of Russian managers noted that they have already arrived at the initial stage of digital transformation and are now planning or implementing first steps in this direction.
Among other companies, 28% have already stepped onto the ‘digital rails’ of development and observed impact on their business. Also, 10% of companies believe that the work they have already carried out in this area allows them to consider themselves ‘leaders of digital transformation.’
Although with 86% of Russian companies the digital component is responsible for less than 20% of their aggregated income, this indicator is rapidly growing. 9% of Russian businesses today collect from 20% to 39% of total turnover from the digital sector of their business. Growth rate in this segment exceeds by far traditional forms of commercial operation, according to the data of DT-Global Business Consulting.
The general macroeconomic situation in Russia today would appear quite favorable, and all businesses in the country are involved in the digital transformation processes in one way or another, stated Daniel Thorniley, President of DT-Global Business Consulting. 75% of them would undergo digitalization for internal reasons (optimization of expenses, management, etcetera) and for the purpose of improving customer experience.
“4% of top managers told us that digital initiatives have already proven themselves completely,” said Mr. Thorniley. “59% of managers are not yet satisfied with digitalization projects, while others are more or less satisfied. This situation is typical around the world. Russia repeats all worldwide trends in this aspect.”
One of the key drivers of economy digitalization is the ecommerce segment, according to Thorniley. Total sales volume through this channel in Russia has reached 29 billion euros today (estimate of DT-Global Business Consulting) with a 39 billion Euro forecast for 2019. Same indicator in the United States would exceed the Russian one thirteenfold and in China fifteenfold.
“On the global scope, including Russia, business digitalization follows one of three major scenarios,” added Mr. Thorniley. “First scenario: the company strives to keep its traditional operation unchanged and develops digital projects independently. Second scenario: mutual penetration of traditional and digital components. This is quite a difficult way company-wise but about 40%-50% of businesses today practice that approach: digital elements are gradually integrated into traditional departments of the business. Finally, the third scenario requires creation of new business models that have not existed before introduction of digital technologies, for the company to develop on their basis.”
Data Centers Russia
Heiko Koop, CEO of Linxdatacenter, emphasizes that digitalization today is in the phase 2.0. The first stage was implementation of digital components by nearly all organizations, and the current stage assumes upgrade of digital systems to conform to requirements of the future. This upgrade includes compliance with all legal requirements and top level of fault-tolerance and data protection.
“All these tasks today are best solved by clouds: these technologies determine potential of a company’s digital growth today,” said Mr. Koop. “In many regards, modern digital projects are not merely tools for the company’s profit increase, but a way to maintain existing level of business efficiency. All business processes become digital and are implemented around three major tasks: efficient data storage, data exchange and data analysis in due order to provide results required by the business. Clouds help to carry out migration of business processes from legacy systems to state-of-the-art platforms and digital tools easily and effectively.”
Heiko Koop believes this to be one of the key tasks for Russia today, due to delayed start of digitalization processes in the economy. Success here can be guaranteed by proper audit of IT resources, existing challenges and available personnel, by preparation of a well thought-out plan of cloud migration and its high quality implementation to increase fault tolerance and data safety.
“Data centers as one of the key elements in digital transformation, play a central role in these processes,” added Mr. Koop. “Their functionality enables a gradual transfer from outdated IT infrastructure to most state-of-the-art configurations and architectures and, consequently, better business results.”
The research of DT-Global Business Consulting evaluates the state of digital infrastructure in the Russian Federation as favorable overall. 72% of respondents confirm this point of view, with 52% pointing out legal impediments.
On the whole, it is expected that in the near future digitalization in Russia will be focused on adaptation of micro-services, container technologies and development of cloud platforms and solutions.
Robert Farish, Vice President of the analytical company IDC in Russia and the CIS countries, has commented on the results of DT-Global Business Consulting’s research and stresses that the state will be playing a significant role in the digitalization processes across the country: this trend is observed in the development strategies of large companies with the state’s share interest, from banking to mining and power-supplying industries.
DT-Global Business Consulting conducted the research in February-March 2019 among the top managers of Russian and international businesses operating in the Russian Federation.
A complete version of DT-Global Business Consulting’s study is available on the website: https://www.dt-gbc.com/sample+reports.