Digital Transformation: Key Challenges and Opportunities for Businesses

Digital transformation has become an indispensable element in the development of modern businesses, both globally and locally. Poland, despite certain delays, is striving to catch up by investing in modern technologies and digital infrastructure. Below, we present the key aspects of digital transformation in Poland based on the "Digital Transformation Business Monitor 2024" report developed by KPMG in collaboration with Microsoft, considering the benefits and challenges for Polish enterprises, and the latest data from the "State of Industry 4.0 in Poland 2024" report.

The State of Digital Transformation in the Polish Economy

The Polish economy shows significant potential for transformation, yet it still faces many challenges. According to the report, the transformation potential index reached 5.6 out of 10 possible points, marking the best result among the analyzed years and showing steady improvement since 2022. This indicates that Polish companies are increasingly adept at adapting to digital changes and are more willing to invest in new technologies.

Key DESI Indicators

Poland ranks at the lower end of the European DESI (Digital Economy and Society Index), which assesses the adaptation of societies and economies to digital transformation. Poland achieved its highest rankings in access to electronic health records and ICT training in enterprises. Unfortunately, in 25 out of 34 indicators, Poland ranks below 20th place, indicating significant lag in many areas. For Polish companies, this means the need for intensified efforts in areas such as digital skills, telecommunications infrastructure, and 5G technologies.

Investments and Challenges

Digital transformation requires substantial financial outlays. Polish enterprises are beginning to recognize the benefits of investing in new technologies such as big data and the Internet of Things, which can be key to gaining a competitive edge in the market. However, many firms still do not have full control over budgets allocated for digitization. According to the report, one-third of companies plan to increase spending on digital transformation in the coming year, and nearly one-fifth plan to hire new employees to support this area.

Importance of a Digital Strategy

One of the key aspects of effective digital transformation is having a clear and well-defined strategy. Companies with formal documents outlining their digital strategies achieve significantly better results in all analyzed areas. This strategy should be an integral part of the organizational culture, promoting innovation and continuous development. The KPMG report highlights that the percentage of companies with a formal digital strategy has increased to 27%, a significant step forward compared to previous years.

Benefits for Enterprises

Digital transformation offers several benefits for Polish enterprises, such as:

• Improved Operational Efficiency: Implementing modern technologies allows for process automation, resulting in time and cost savings.
• Better Data Analysis: Modern analytical tools enable companies to collect and analyze large amounts of data in real-time, supporting better business decision-making.
• Increased Competitiveness: Companies that effectively implement digital technologies can respond more quickly to changing market and customer needs, giving them an edge over the competition.
• Development of New Business Models: Digitization opens up new possibilities for product and service innovation, potentially leading to new revenue streams.

Percentage of Companies with Implemented Digital Technologies by Sector

The "State of Industry 4.0 in Poland 2024" report provides detailed data on the implementation of digital technologies across various sectors of the economy. For the second consecutive year, mobile solutions were the most commonly used technology by companies. Below are the percentages of companies with implemented digital technologies:

Analysis of Technology Implementation

1. Mobile Solutions: Mobile solutions are the most widely adopted technology across all sectors, with 67% of companies overall implementing them. The financial sector leads with 87%, followed by life sciences at 79%, and automotive at 93%. This indicates the importance of mobile accessibility and real-time data processing in various industries.
2. Automation/Robotics: Automation and robotics are highly utilized, particularly in the automotive sector (73%), energy, mining, and utilities (64%), and transport, freight, and logistics (70%). This reflects the drive for efficiency and precision in these industries.
3. Machine-to-Machine Communication (M2M): M2M communication is prominent in transport, freight, and logistics (65%), reflecting the need for integrated systems in supply chain management. The financial sector also shows significant adoption (53%).
4. Internet of Things (IoT): IoT adoption is highest in the automotive sector (67%), highlighting the trend towards smart manufacturing and connected devices. The energy sector also shows strong implementation (48%).
5. Data Warehouses and Big Data: Both technologies are heavily adopted in the financial sector (60%), indicating the sector's reliance on data-driven decision-making. The consumer goods market also shows substantial usage of big data (58%).
6. Artificial Intelligence (AI): AI is gaining traction, with significant adoption in transport, freight, and logistics (60%), and automotive (47%). This suggests increasing reliance on predictive analytics and smart automation.
7. Edge Computing: Edge computing is most prevalent in transport, freight, and logistics (65%), and automotive (53%), reflecting the need for low-latency processing at the network edge.
8. Blockchain: Blockchain technology is still emerging, with the highest adoption in the automotive sector (40%), indicating its potential for secure, transparent supply chains.
9. Metaverse: Adoption of metaverse technologies is still low, with the highest implementation in the automotive sector (33%).
10. Computer-Aided Decision Making: This technology is widely adopted across sectors, particularly in the financial sector (87%) and automotive (60%), emphasizing the importance of data-driven strategies.

Industry 4.0 in Poland

The "State of Industry 4.0 in Poland 2024" report shows that awareness of the fourth industrial revolution among representatives of the Polish industry is significantly increasing. More than half of the respondents declare a good understanding of the topic, which is an almost 20% increase compared to previous years. However, 67% of respondents indicate that financial costs are the main barrier to implementing Industry 4.0. Additionally, a lack of qualified staff and resistance from employees to innovations are significant obstacles.

The Future of Digital Transformation

The future of digital transformation in Poland looks promising, especially in the context of the growing awareness of its benefits. The increase in indicators and positive changes in the approach of companies to investing in digital technologies are good signs. Many enterprises plan to increase spending on digitization and hire new employees in this area, which can contribute to further digital development of the country.

In summary, Poland is on the path to digital transformation, but there is still a long way to go. It will be crucial to continue investing in technologies, digital education, and creating favorable regulations to keep up with global trends and fully harness the potential of digital transformation.

The data and statistics included in this text are derived from the "Digital Transformation Business Monitor 2024" report developed by KPMG in collaboration with Microsoft and the "State of Industry 4.0 in Poland 2024" report.