Europe, a powerhouse of history, culture and economic might, has seen a concerning dip in labour productivity growth over the years, dropping from a robust 7% in the 1960s to just 1% since the early 2000s, as noted by the European Central Bank. While various factors have contributed to this decline, a clear avenue for revival lies in the embrace of cutting-edge technologies.
Enter the game changer: digital transformation. It's not just a technological shift; it's a cultural metamorphosis that challenges the status quo, encourages experimentation and embraces novel ways of working. According to a Panasonic Connect Europe study, organisations in Europe foresee a staggering 38% boost in productivity within three years through digital transformation projects, with a return on investment expected within five years.
So, why is digital transformation the golden ticket?
Enhanced customer experience: You can gather vast amounts of data to better understand your customers, predict market trends and offer tailored solutions. By responding in real-time to the dynamic needs of the market, you can provide an unmatched customer experience to retain new clients.
Improved decision making: Data is the new gold, and European businesses sit on a treasure trove. Through advanced analytics and artificial intelligence, companies can gain insights that were previously inconceivable. This data-driven decision-making can lead to improved efficiencies, reduced waste and a significant uptick in productivity.
Operational efficiency: The incorporation of Internet of Things (IoT) devices, automated workflows, and integrated systems leads to operational efficiencies that directly impact the bottom line. Tasks that used to take days can now be executed in a matter of minutes. This not only boosts productivity but also allows your employees to focus on higher value tasks.
Fostering innovation: Digital transformation paves the way for innovation. By adopting agile methodologies and a culture of continuous improvement your business can adapt and evolve in tandem with technological advancements. This fosters an environment where novel solutions to age-old problems can emerge, directly enhancing productivity.
Hiroyuki Nishiuma, CEO, Panasonic Connect Europe
Yet, according to the same research, only 15% of organisations have completed their digital transformation projects. And almost 40% of respondents said they felt their organisation was lagging behind competitors.
Major barriers include lack of internal knowledge (35%), lack of internal IT people resource and skills (32%), concerns about the interoperability with existing IT infrastructure (30%) and a lack of external specialist IT support or awareness of specialist providers (30%).
It seems the biggest barrier is a lack of internal expertise and resource as businesses struggle to find external specialist support.
Learning from others
In Japan, Panasonic has used Gemba Process Innovation (GPI) to radically review, redesign and reinvent operations using technology to increase efficiencies and free-up creative potential. It combines an in-depth understanding of the organisation and the latest available technologies to deliver new methods of working.
European businesses need to think beyond traditional consultants. They require support from organisations with a deep understanding of technology and hands-on experience in optimising operational processes across various sectors. Panasonic Connect brings this solutions-focused approach, leveraging its vast manufacturing and process optimisation experience from Japan.
Growth alongside sustainability
Alongside productivity, European businesses must also balance the need to improve their sustainable practices. In a Gartner study, 63% of business executives reported that customers were exerting pressure on them to be more sustainable. And Panasonic's study aligns with this trend, with 91% of UK professionals affirming that environmental sustainability is embedded in their organisational decisions.
Organisations have the opportunity to assist in two areas. First to reduce the environmental impact of their own operations and then to look at how they can contribute to the needs of society as a whole. Panasonic's commitment to achieving net zero CO2 emissions by 2030 mirrors this dual commitment.
By developing energy-efficient technologies, offering clean energy solutions, and contributing to sustainable initiatives such as smart cities and eco-friendly vehicles, Panasonic aims to lead the charge towards a greener, more productive future.
Despite the challenges, the horizon looks promising. As more European businesses ride the waves of digital change, there's hope that productivity and environmental sustainability can find a common solution. In the age defined by technology, Europe's future might just hinge on its digital transformation prowess.
To read Panasonic Connect Europe’s ‘Breaking Down the Barriers to Digital Transformation’ report in full, click here.