Brigida Soriano - Fotolia
Private sector companies failed to capture $5.3tn of digital business opportunities in 2015, according to a new report from Cisco.
The ‘Digital Value at Stake’ report claimed that businesses failed to capitalise on 80% of their total potential Digital Value at Stake, a term Cisco uses to describe the value opportunity for private sector organisations in the digital economy.
While the statistic is startling, it’s worth noting that is based on Cisco’s guesstimate that there is $6.62tn of potenital digital value to be realised across private sector industries each year. The estimate is for based on a ten year period - 2015 and 2024. Assuming that the value placed on the potential digital economy is remotely accurate, organisations only captured 20% of it in year one of the ten year period.
In the UK specifically, Cisco believes that the implementation of digital technology could add $926bn to the UK private sector over the next ten years.
Kevin Bandy, chief digital officer at Cisco, said that in order for the private sector to recognise its true digital potential, organisations needed to challenge the status quo.
"Our research shows that capturing digital value in the private sector involves challenging assumptions that have underpinned the success of a company up to now, and stress-testing the ways in which you deliver value to customers," he said. "It means challenging the organization and being willing to make the changes that include its operations, culture, revenue model, technology maturity, and skill sets -- in fundamental ways, and perpetually."
Cisco also drew attention the important role that cybersecurity played in capturing Digital Value at Stake. The San Francisco-based company said that private sector firms need to build sevurity into their digital solutions as a foundational element, rather than trying to ‘bolt it on’ as an afterthought.
“In fact, many of the use cases detailed in our analysis depend heavily on the ability to make security and privacy guarantees to customers, partners, and other players in the overall digital ecosystem,” the report said.
However, the top driver of digital value, according to Cisco’s analysis, was employee productivity, or lack thereof.
Cisco said that ‘people-centric connections’ (person-to-person or person-to-machine) will drive 64% of Digital Value at Stake over the next decade. In its previous 2012 analysis, people-centric connections drove 55% of the estimated Value at Stake. The firm said that the revised figure was due to an increased ability to combine the ‘people’ and ‘process’ elements of digital business with the ‘things’.