Romanian companies expect digitalization to increase their revenues, but many are still not ready to adopt a digital business model

With only 42 percent of companies having a website, 33 percent of employees using computers and 7 percent of companies selling their products online, Romania is on the last place in the EU for digitalization rates. Is there a direct link between companies’ digitalization level and the revenues they generate?

A study by consulting company Valoria – the Digitalization Barometer for Romanian companies – analyzed the impact of digitalization on the revenues of Romanian companies.

Of all the responding companies, those with revenues between EUR 50-100 million were the most influenced by digitalization (59 percent), followed by those with revenues of over EUR 100 million (50 percent) and start-ups with revenues of under EUR 1 million (48 percent).

When it comes to the knowledge needed for implementing digitalization, 61 percent of the companies with revenues between EUR 10 and 50 million say that they are very ready, followed by 56 percent of the companies with revenues of over EUR 100 million and 55 percent of those with revenues of under EUR 1 million.

For 75 percent of companies with revenues over EUR 100 million, the new business models have significantly changed their industry, followed by 41 percent of companies with revenues between EUR 50-100 million and 36 percent of those with revenues between EUR 10-50 million.

The perception that digital business models will continue to change the industry in which they are active in the following 1-3 years is confirmed by 47 percent of the companies with revenues between EUR 10-50 million and EUR 50-100 million and 42 percent of the companies with revenues of more than EUR 100 million.

In this context, 81 percent of companies with revenues over EUR 100 million, 75 percent of those with EUR 50-100 million in revenues and 92 percent with EUR 10-50 million say that digital business models are not a threat.

Only 46 percent of companies with revenues between EUR 10 and 50 million made a top management leader responsible for digital development, followed by 41 percent of the companies with revenues between EUR 1-10 million and 38 percent of those with revenues over EUR 100 million. Companies with revenues of EUR 10-50 million also say they have the best expertise at top management level to evaluate and develop a digital business model.

Although an average of 58 percent of all companies say that they have capitalized on digitalization to obtain a competitive advantage, there is still a significant percentage of companies who still have work to do on this matter.

The reasons why companies don’t capitalize on digitalization are related to concerns about security for 60 percent of the companies with revenues higher than EUR 100 million, about the fact that there are no digital consumers for 57 percent of companies with revenues between EUR 50-100, and about resistance to change for 45 percent of the companies with revenues of EUR 10-50 million.

Companies recognize the benefits of digitalization in cutting costs, simplifying processes, but too few also see an increase in revenues. Smart operational management systems, data analytics and IoT seem to be the main products/services companies are aiming to take on. Most of the companies with revenues of over EUR 100 million (40 percent) expect digitalization to increase their revenues by 10-20 percent over the next three years. Meanwhile, companies with revenues between EUR 50-100 million (42 percent) expect their revenues to grow by only EUR 1-5 percent.

The study concludes that companies with large revenues have a strong interest for implementing digital solutions to strengthen their dominant market positions. Small companies are privileged as they either have a digital DNA or they need to change very little in their business models for digitalization. Today, digital solutions are customized for every income level and financing schemes for investments are very diverse.

Photo: dreamstime.com

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