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TCS study says German companies have hiked spend on digital transformation

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The Economic Times
03rd December, 2019 13:55 IST

MUMBAI: German companies have increased investment in digitization initiatives, a study by IT services provider Tata Consultancy Services found. The study titled ‘Don't Panic! Keep Calm and Digitize’ focused on German companies with 100 or more employees, polling 953 senior managers and decision-makers responsible for digitization within their organizations.

In more than one third of the companies (35 percent) surveyed, the change process is the responsibility of the digitalization units or the Chief Digital Officer. In around one in four companies, the management or the executive board (26 percent) or internal corporate communications (23 percent) is responsible.

According to the report, almost every second company (47 percent) uses ‘change management’ methods to adapt to new structures and prepare the workforce, versus 36 percent in 2017. Among large companies with 500 or more employees, 57 percent rely on change management methods.

For project management, companies are more likely to rely on agile methods. The report said “Forty three percent of companies now state that they sometimes, mostly or always use agile methods (vs 35 percent in 2018). Agile adoption is even greater among large companies with 500 or more employees. More than one in two (52 percent) companies increasingly use agile methods, an increase of ten percentage points compared to 2018 (42 percent).”

Eight out of ten companies (84 percent) say that employees should have general digital skills in order to drive the digital transformation of the company, according to the report.

“This is a significant increase compared to the previous years with 74 percent (2018) and even only 66 percent (2017),” it noted.

It added, eight out of ten companies (81 percent) state that they help employees develop digital competences. A year ago, the figure was 77 percent, two years ago it was 75 percent.

Every second company (50 percent) states that employees quickly adopt new technologies. However, a similar number (44 percent) also complain that the effort to convince employees to use new technologies is very high. This is one of the reasons, a large majority – two thirds of companies (66 percent) train their employees to use new technologies, TCS found.

“Our study shows that German corporations are accelerating their digital transformation journeys, increasing the scale and complexity of their initiatives, necessitating robust change management processes, and investments in talent development. Additionally, to gain better speed to value, organizations are embracing agile methods,” said Sapthagiri Chapalapalli, Managing Director, TCS Germany.

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