Digital Readiness Index

AVADO DRI Whitepaper
Digital
Readiness
Index
Executive Summary:

- AVADO examines how prepared UK businesses are for the risks of digital disruption, and identifies
the industries most vulnerable to new digital developments.
- The research polled senior Learning and Development (L&D) Managers with responsibility for
learning and development of staff. Respondents work in Finance, FMCG, Telecoms, Retail, Media
& Marketing, Professional Services and Energy companies with turnovers of over 100m.
- Half of businesses say their risk of disruption is moderate-to-nil, but this confidence does not tally
with the findings of the research.
- A clear majority (55%) are worried that senior leaders pay lip service to the need for digital
transformation and upskilling.
- Businesses invest less than 20% of their training budgets on digital. Sales and Marketing
departments are most likely to benefit from digital training (42% of all Marketing teams receive
this training) and HR is least likely (23%).
- A quarter of organisations do not benchmark their level of digital literacy across the workforce,
and report low levels of employee engagement in these programmes.
- AVADO has created the Digital Readiness Index a unique analysis of preparedness for disruption
which places strong emphasis on businesses approach and progress towards digital learning and
upskilling staff.
- The research finds that the Energy & utilities sector is the most vulnerable to the threat
of digital disruption.
Foreword Lisa Barrett,

Managing Director, AVADO Digital
For most organisations, digital transformation is high on the agenda as they look to take advantage
of the many opportunities that new technologies offer whilst avoiding disruption from more
nimble competitors.
But understanding the need to create a digital strategy is one thing; executing a plan that works is
quite another. In working with our customers weve learned that successful transformation means
investing in skills which in turn requires two things: strong leadership to drive a learning agenda and
the right levels of investment in training programs that deliver proven business impact.
If businesses are to succeed in todays competitive landscape not to mention the world of
tomorrow then senior leaders must do more than pay lip service to digital transformation.
Indeed, executives need to have a strong grasp of digital themselves in order to define the shape
of a successful transformation.
The enterprises that survive and thrive in the future will be those that understand how they need
to transform their organisation, and equip their people with the necessary digital skills to harness
new technologies.
Equally, putting a digital learning strategy in place is a great start, but its every bit as important to
understand the impact and return on investment of these programs to make sure they are delivering
the right results.
Weve put together the AVADO Digital Readiness Index to help businesses understand how prepared
they are for digital transformation. We hope that this report will offer you some useful guidance as
you think through the strategies that will make your organisation fit for whatever the future holds.
Methodology
To create this paper, AVADO commissioned independent market research company
Censuswide to survey 242 senior managers with responsibility for learning and development
of staff. Respondents work in Finance, FMCG, Telecoms, Retail, Media & Marketing, Professional
Services and Energy companies with turnovers of over 100m.
Each respondent was asked to complete an in-depth questionnaire about their companys
preparedness for digital disruption, comprising questions about enterprise readiness, digital
transformation strategies, training, recruitment, leadership, and other related topics. The survey
findings were used to create the AVADO Digital Readiness Index more information
about which follows at the end of this whitepaper.
Preparing for digital disruption

the big picture
The report surveyed senior managers with responsibility for learning and development of staff, most
of whom recognise the importance of preparing for the potential impact of digital disruption, with
almost nine in ten organisations (86%) having assessed how their business will be affected
by digital.
Just over half (50%) say that their risk of disruption is moderate-to-nil. Yet this confidence does
not accord with the wider findings of the research.
What did you conclude about your level

of disruption risk for your business?
3
It is very low
27
76
76
24
It is very high
It is high
It is moderate
It is low
13%
36.5%
36.5%
11.5%
2
We have zero
risk of disruption
1%
1.4%
Limited C-suite buy-in holding

back digital transformation
An overwhelming proportion of respondents say that their digital transformation
strategy is supported by senior leadership (93%) and that they have the right people
to deliver these initiatives (89%).
However, a majority (55%) worry that leaders sometimes pay lip service to digital
transformation and upskilling. Meanwhile, a quarter (23%) said that they did not
recruit and retain people with the ability to disrupt traditional business models.
I worry that our senior leadership team is

sometimes just paying lip service to the need
for digital transformation and upskilling
33
Strongly agree
13.6%
100
Agree
41.3%
78
Disagree
32.2%
31
Strongly disagree
12.8%
Investment in digital training not equal

across the business marketing takes
lions share
How much of your overall training budget is allocated
to equipping your people with new digital skills?
81 - 100%
1 | 0.4%
61 - 80%
5 | 2.1%
41 - 60%
19 | 7.9%
None
8 | 3.3%
1 - 5%
39 | 16.1%
21 - 40%
49 | 20.2%
6 - 15%
65 | 26.9%
16 - 20%
56 | 23.1%
Businesses invest less than a fifth (19%) of their training budgets on digital. In spite of this, 91% of
respondents are confident that they have an effective programme in place to upskill their workforce
around digital.
However, there is a wide disparity in training received in different business units: 42% of sales and
marketing departments receive training, falling to just 23% in HR teams.
Current digital training lacks

benchmarking and impact
assessment
We benchmark our level of digital

literacy across the workforce
and regularly review this
58
Strongly agree
24%
122
Agree
50.4%
54
Disagree
22.3%
8
Strongly disagree
3.3%
24% of businesses admit that their investments in digital skills

and transformation does not deliver clear, measurable return on
investment; meanwhile, the same proportion do not use data to
track the effectiveness of their learning programmes.
We incorporate digital literacy into

peoples performance reviews
10
47
126
54
Strongly agree
Agree
Disagree
Strongly
disagree
19.4%
52.1%
22.3%
4.1%
5
N/A We do not have
performance reviews
2.1%
Finally, a clear majority (59%) of respondents who themselves are

responsible for learning and development admitted that their own
levels of digital understanding are moderate or poor.
Which parts of your organization

receive training on digital?
Around a quarter of organisations fail to benchmark their level of digital literacy across
the workforce (25%), report low levels of employee engagement in these programmes
(22%), and do not incorporate digital literacy into staff performance reviews (29%).
77
87
101
Sales &
Marketing
41.7%
36%
56
Purchasing/
manufacturing/
engineering
Accounting
& Finance
31.8%
68
Everyone in my organization
receives training on digital
28.1%
Other,
please specify
HR
65
R&D
26.9%
1.7%
23.1%
12
No one in my organization
receives training on digital
5%
Whos at risk the industry view

AVADOs research has enabled us to identify the industries that are least
prepared for the risk of digital disruption, as well as those which are leading
or lagging in particular areas such as training or senior leadership buy-in.
Limited C-suite buy-in holding back digital transformation
Leaders in the financial and Professional Services industries are least likely to support digital
transformation. Telecoms and FMCG businesses, by contrast, were the highest scoring
(and thus best-prepared) in both of these areas.
AVADO TRANSFORMATION TIP:

Having a plan for digital transformation starts with understanding what digital even means.
AVADO has a framework that we use to define digital. How ready is your business for
transformation when applying our framework?
Digital Imperative
Agile Innovation
New ways of working
Digital Channels to Market
DIGITAL
Culture & Change
Customer Centricity
Unlocking Data
Cyber & Data Security
The Finance industry was also among the most likely to agree that senior leaders sometimes
pay lip service to digital transformation (63% of respondents) the second highest after
Energy companies (79%).
I worry our senior leadership team pays lip service digital transformation and upskilling
Industry
Rank
Answered agree or
strongly agree
Energy
78.6%
Finance
62.7%
M&M
60.1%
Telecoms
56.5%
Professional Services
50%
Retail
43.2%
FMCG
33.4%
By comparison, only 43% of Retail respondents agreed with this sentiment and only 33%
of FMCG companies.
Investment in digital training not equal across the business marketing takes lions share
The Professional Services sector was the worst performer in terms of providing digitally-focused
learning programmes. A quarter (25%) of Professional Services firms say they dont have a digital
learning programme in place, followed by 23% in the Retail industry.
The best performers were Telecoms firms (only 9% did not have a digitally-focused training
programme), followed by the Media & Marketing and FMCG industries (both 17%).
We have a learning/capability programme in place to upskill our existing

workforce around digital
Industry
Rank
Answered disagree or
strongly disagree
25%
Retail
22.8%
Energy
21.4%
Finance
17.6%
M&M
16.7%
FMCG
16.7%
Telecoms
8.7%

As you think about where in your organisation youre investing in digital training, are you
thinking broad and deep enough?
You cant stop the clock;

you cant fossilise jobs.
The only way round this
is to invest in skilling
people up.
Baroness Morgan of Huyton (Head of Lords Select Committee on Digital Skills)
Current digital training lacks benchmarking and impact assessment

Retailers ranked poorly for the impact of training. The sector scored lowest for benchmarking
employees digital literacy (30% fail to do this) and incorporating digital skills in employee
performance reviews (39%). The Retail industry also scored second lowest for employees
engagement with digital skills programmes (68%).
Retailers were most likely to disagree that their investment in digital skills training and
transformation delivered a clear return on investment (32%). The sector was also second
worst for tracking the effectiveness of digital learning, behind only the Energy sector.
Our people are highly engaged in the digital learning programmes we offer
Industry
Rank
strongly disagree
M&M
33.3%
Retail
31.8%
28.6%
Energy
28.5%
Finance
16.5%
FMCG
8.4%
Telecoms
4.3%
The best performer is the

Telecoms industry: it has the
highest levels of employee
engagement (95%), and is
least likely to neglect digital
benchmarking and include
digital skills in performance
reviews.

AVADO knows that learning that works involves two things: engaged students and learning
that has an impact on an organisation. Are you clear on what your employees are learning
and how they are applying that in their day-to-day thinking?
The use of data to track the effectiveness of our digital learning is an integral part
of all of our learning programmes
Industry
Rank
strongly disagree or
we do not have learning
programmes
Energy
42.8%
Retail
25%
FMCG
25%
PS
25%
M&M
22.3%
Telecoms
21.7%
Finance
19.8%

Its vital to understand your organisations level of digital capability in comparison to the rest
of the industry. To encourage a serious approach to digital, consider incorporating engagement
with digital training into performance reviews.
10
The Digital Readiness Index

AVADO analysed the sector-specific research data to provide an overall ranking for digital
preparedness. What makes the Digital Readiness Index unique is the emphasis it places on
businesses approach and progress towards digital learning and upskilling staff.
Based on the criteria of leadership, investment, and impact of training, Telecoms is the best-prepared
sector with 82 points (out of 100). Energy and Utilities firms are least-prepared industry, scoring
only 38 points.
AVADO INDEX (higher number = better prepared):
Industry
Rank
Score
Telecoms
82
FMCG
79
55 (higher)
M&M
55 (lower)
Finance
48
Retail
43
Energy & Utilities
38
To create our index, we polled respondents from each sector on 17 individual questions based
around five indicators of digital readiness:
1. Planning the extent to which enterprises have assessed the extent of potential digital disruption,
and whether they have taken steps to address it
2. Support and capability of senior leadership to shape and implement a digital strategy
3. Effectiveness and scope of learning and development programmes to upskill workers in digital
4. What processes are in place to look at how outside forces, such as changing customer behaviour
driven by new digital technologies, may shape their business
5. Respondents own level of digital understanding
Each industry was ranked for between 1 (top ranked) and 7 for each question; the total rankings
were combined to give an index score out of 100, with higher scores an indication of better
preparation for potential digital disruption.
These sectors were then ranked against a supplementary question, which asked about their own
conclusions concerning their preparedness for digital disruption.
What particularly stands out is the findings for the Energy and Utilities industry. Although this
sector scored lowest in the Digital Readiness Index (indicating that it is the least prepared and,
potentially, most vulnerable), Energy and Utilities respondents were least likely to report a high
risk of disruption: only 17% said that their own risk was high or very high. This compares with
the Telecoms industry, which self-reported the second highest level of risk, but which scored
equal-best in the index for measures taken to combat digital disruption.
11
Energy and Utilities firms may be correct to surmise that they will be less affected than other
industries by the impact of digital on their business operations. However, they will only know this
if they have taken full account of factors such as smart meters, the Internet of Things, field service
technologies, SCADA systems, price comparison services, smart buildings, and employee
management technologies.
These (and other) technologies demonstrate that no industry is immune from the relentless march
of digital, and highlights how critical it is to conduct a thorough review of plans and processes,
learning and skills, and senior leadership to ensure that your business is fully prepared for the future.
About AVADO
AVADO is all about learning that works. Theyve pioneered new ways of delivering training which
receive high levels of engagement and actionable learning outcomes; they know that valuable
learning experiences need to be inspiring and useful. With an active community of over 20,000
students, they are the UKs largest online learning provider for professional qualifications. AVADO
is the official online learning partner for CIPD, Google and the International Olympic Committee.
www.AVADOlearning.com
[email protected]
https://www.trainingjournal.com/articles/feature/digital-skills-and-future-labour-force
12

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AVADO DRI Whitepaper

Foreword Lisa Barrett,

Preparing for digital disruption

What did you conclude about your level

Limited C-suite buy-in holding

I worry that our senior leadership team is

Investment in digital training not equal

Current digital training lacks

We benchmark our level of digital

24% of businesses admit that their investments in digital skills

We incorporate digital literacy into

Finally, a clear majority (59%) of respondents who themselves are

Which parts of your organization

Whos at risk the industry view

AVADO TRANSFORMATION TIP:

New ways of working

Digital Channels to Market

Culture & Change

We have a learning/capability programme in place to upskill our existing

AVADO TRANSFORMATION TIP:

You cant stop the clock;

Current digital training lacks benchmarking and impact assessment

The best performer is the

AVADO TRANSFORMATION TIP:

AVADO TRANSFORMATION TIP:

The Digital Readiness Index

AVADO INDEX (higher number = better prepared):

Energy & Utilities

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