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Major UK firms increase investment in digital transformation

Monday 25th April, 2022

According to new research by Proactis, major UK businesses will quadruple their investment in digital transformation to help their businesses recover from disruption.

The international spend management company says digitalisation is set to drive domestic and international trade as companies adapt to the Russia-Ukraine conflict, which has further disrupted supply chains already affected by Covid-19, raised commodity prices and curtailed global economic growth.

Investment in digitising business processes will increase from £25bn last year to £123bn* in 2022. The Proactis report compares the recovery plans of businesses with at least 50 employees in four European economies and the US.

According to the report, digital transformation is seen as the most effective route to improve business resilience, protect margins and improve trading opportunities. The most common reasons for undergoing digital change were to create efficiencies and increase profitability.

The rate of capital investment in digital business has rapidly increased. Pre-pandemic, just over one in three (39%) major businesses had spent cash on digital transformation of any kind. Now, that has risen three-fold to 93% of businesses as Covid-19 restrictions prompted a dramatic surge in digital business of all kinds.

Tim Sykes, CEO at Proactis, said: “Businesses have many economic headwinds to tackle in the coming year and most are relying heavily on digitising processes and services to see them through. Digital transformation has been a business consideration for some time. The challenge now is to establish how to use technology to prosper when faced with supply chain shortages, rising costs, a global talent shortage, ongoing conflict and the long term impact of sanctions.”

The Proactis report also suggests major businesses will continue to prioritise their supply chains in 2022. Despite 81% of major businesses already attempting to digitise supplier management in the last year, fragile supply chains remain a major barrier to success for businesses.

In the UK, cost efficiencies and spending control were the most popular reasons for investing in digital supply chains.

* £123bn is calculated by multiplying the average % turnover our respondents anticipated spending on digital transformation (4.3%) by the combined turnover of UK companies with more than 50 employees as recognised by the Office of National Statistics.

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