Transformers 2018: how digital are the largest companies in the Netherlands?

Source: Het Financieele Dagblad - Transformers 2018 magazine (23/06/2018)

For the second year in a row, Het Financieele Dagblad is publishing the results of Vlerick Business School's study into digital transformation among large Dutch companies. Which companies are leading the way this year and which companies still have a long way to go? How are they tackling digitalisation in their organisation and sector? And what can we learn from their efforts?

In collaboration with Vlerick Business School, the FD is presenting the results of the second edition of the annual study into digital transformation: Transformers. The main conclusion is that large Dutch companies have made considerable progress compared with last year. Many can feel their digital competitors breathing down their necks. Compared with 2017, companies are increasingly realising that digital transformation involves more than a few innovative experiments here and there and buying start-ups.

It is striking that some ‘transformers’ are now hitting a ceiling. They are so far advanced in their digital transformation that they are starting to wonder: ‘What’s next?’ Financial institutions in particular are facing this issue. How can they make a difference with their new digital identity and tap into new sources of income in a market in which their competitors and many newcomers all seem to be storming in the same direction?

The need for answers to these questions becomes more pressing every year. For now, the task for those pursuing the digital leaders is as clear as it was last year: they will need to keep working relentlessly on their digital future. This report shows how they are doing and the lessons which can be learned, with a special focus on the six main competences which are required for a successful digital transformation: strategy, governance, talent, culture, technology and business processes.

Companies leading the way in 2018

Transformers 2018Ten companies in the study appear to have made major progress in their digital transformation. They demonstrate consistency in their efforts and claim to already be seeing impressive business results. These companies regard themselves as role models in their sector and mainly tend to look outside their sector and at start-ups for inspiration and challenges.

As the differences between the companies in this digital vanguard are extremely small this year, we will not be publishing a top ten list of the best performing companies this time.

Download the complete magazine 'Transformers 2018' (in Dutch).

Once again, seven companies are leading the way this year (in alphabetical order):

  • ABN Amro
  • Arcadis
  • ING
  • KPN
  • Randstad
  • Royal Vopak
  • Wolters Kluwer

There are also some newcomers, however:

  • Relx Group
  • Royal HaskoningDHV
  • Tennet

There are 25 companies following closely in the footsteps of the leading group. The next 12 companies have not yet fully committed to an integrated approach to their digital transformation. The 8 companies bringing up the rear are only just starting out on the adventure.

Main conclusions

Digitalisation is now filtering into every area of large organisations, from the boardroom to the production floor. However, a complete transformation is still a step too far.

1/ The Dutch business sector understands that digitalisation is of strategic importance for its continued existence. The realisation that digital transformation affects all aspects of the organisation and requires an integrated and widely supported approach is now also filtering through. The leading companies in this study act in accordance with this realisation, saying that they are encouraged by improved business performance.

2/ Dealing with and deploying staff and digital talent during the digital transformation also remains a point of attention this year. Without support and sufficient in-house digital talent – which is also provided with optimal support – the transformation might be delayed or could grind to a halt.

3/ Last year, companies stated that they mainly looked at major digital companies such as Google, Apple, Amazon and Alibaba for inspiration. This year, they are focusing more on established companies outside their own sector and on start-ups.

4/ Everyone claims to be working towards an agile organisation in which digital talents can perform at their best, over and beyond hierarchical structures. Just as long as the client takes centre stage. This is the theory, anyway. However, the study shows that companies are not doing so well at adopting an encouraging personnel policy and leadership and a culture in which experimentation and failure are accepted.

5/ The reputation of many IT departments forms an obstacle to transformation. IT leaders state that they first need to prove themselves as worthy and reliable partners of the business side of the company before claiming to be natural leaders of digital transformation.

6/ Many companies are not aiming for a complete metamorphosis. Only 20% of the companies attach great importance to a strategy which aims to fundamentally change the business model and business processes.

About the study

Aim
Transformers is an annual study into the digital transformation of large Dutch companies. The aim is to share insights which can help the business sector to make digital progress. Transformers is a joint initiative by Het Financieele Dagblad and Vlerick Business School.

Definition
Digital transformation is an integrated business transformation in which digital technologies play a dominant role.

Participants
The annual Transformers study is based on the 200 largest Dutch companies (in terms of turnover). Companies which have been entirely digitally active since day one are not taken into consideration. The invitations are sent to the person with the highest level of responsibility for digital transformation.

Of the 200, 55 companies completed the questionnaire in full this year. This group can be divided into 30 B2B companies, 5 B2C companies and 20 companies which serve both markets.

Most of the respondents represent the energy & utility, financial services, manufacturing and construction sectors. Most of the respondents are chief information officers.

Approach
The questionnaire is partly compiled in consultation with digital companies (so-called ‘digital natives’). By means of various statements, the respondents are asked to assess their own digital efforts and strategy. This academic method is frequently used to examine internal processes and management in organisations. This method naturally has some limitations in terms of the reliability of the responses. For this reason, the researchers also talk with the participating companies. In this magazine, three of these discussions have been elaborated into case studies on three specific components of digital transformation: governance, business processes and technology.

The range of answers in the study, both within single companies and between different companies, is also wide enough to indicate that the questions have been answered honestly.

Outcomes
The results of this study mainly highlight the digital efforts made by organisations and the focus points of these efforts. They do not provide information about the effectiveness and concrete results of a chosen strategy or effort, or the extent to which foreign competitors are performing better or worse.

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