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Is Cultural Resistance Holding Supply Chain Organizations Back from Digital Transformation?

04/30/2018 By

A substantial gap separates digitally innovative companies from those that still rely on traditional approaches to supply chain and logistics. Yet while most supply chain and logistics professionals believe that their organizations are average or below average in digital maturity, only about half are actually implementing new technologies.

These insights come from a new Janeiro Digital report, “The Modernization Gap: Digital Innovation and Transformation in Supply Chain and Logistics.” The software firm surveyed 98 middle and senior-level managers in supply chain on their organizations’ progress and attitudes towards digital transformation.

The report noted that the respondents were “surprisingly conservative” in evaluating their own companies’ digital maturity when it comes to supply chain and logistics. About 55% assessed themselves as average, another 30% said that they lagged behind their industry peers and only around 15% considered themselves to be ahead of the curve.

One potential reason for these conservative self-evaluations is the “clear dominance of certain well-known companies such as Amazon and Coca-Cola that have already undergone their digital transition and consistently push the boundary of what’s possible,” the report notes.

Interestingly, half of the respondents said that their companies are not implementing new digital technologies, and most of them do not think they need to. Only one out of five of those who said that their companies are not implementing new technologies thinks that this is the wrong approach.

For companies that are interested in adopting digital technologies, however, more than two-thirds of them have already started doing so.

More than a quarter of respondents cited back office efficiency as the top opportunity for digital transformation. Also high on the list were customer interface and user experience (24.5%) and business intelligence (22.5%).

The report suggests that cultural resistance to digital transformation is the biggest roadblock, not necessarily shortages of opportunities or existing technology deployments. Survey respondents cited lack of support for change and unrealistic budgets as a couple of the biggest challenges in implementing new technologies.

When organizations do implement new technologies, it is often a company-wide initiative, and the executive team and the IT department are the functions most likely to lead the digital transformation process.

For better or worse, when it comes to digital transformation, the first step seems to be the hardest.

Check out the full report here.