Business digitalisation in Italy

The digitalisation of Italian businesses is currently a key issue in terms of commercial competitivity, as those companies that are able to integrate digital technologies into their operational, management and strategic processes can achieve greater efficiency, better decisional capacity, resilience and are more attractive to potential employees.

However, the Italian scenario has experenced considerable ups and downs.  While some sectors are reaching high levels of digital maturity, other businesses are really struggling to implement basic digital tools to support the industrial transformation.

Too little investment in digitalisation

A survey involving over 100 medium and large Italian businesses clearly reflects the disparity of the situation described above.  The study concentrated on five key areas which represent a litmus test in the transition towards the Industrial Smart Factory.

It emerges that while sustainability and operational efficiency have reached optimal levels of maturity (89% and 71% respectively), supply chain management only reached 67% and human resources 58%.

Nevertheless, digitalisation remains behind all the other areas, with a maturity index of just 48%.  This figure is not surprising considering that 53% of Italian C-level professionals explicitly stated that the level of digitalisation in their company was still low.

This situation reflects a manufacturing context which on the one hand demonstrates a high propensity for continuous improvement, but on the other is unable to bridge a systemic technological gap.

This digital delay weighs directly on the businesses’ abilities to introduce innovative solutions, such as artificial intelligence, advanced cloud platforms, cyber-physical systems or intelligent automation.

One of the main factors responsible for the delay in full company digitalisation in Italy is the lack of investment.  Most companies continue to allocate only a small proportion of their income to the digital transformation.  To be precise:

• 72% of companies invest between 1% and 5% of their profits in digital technologies;
• a further 21% spend between 5% and 10%;
• a minority of just 2% exceed the threshold of a 10% investment;
• while 5% have not yet allocated a specific budget.

These figures suggest that despite recognising the importance of digital technology, many Italian companies are taking a cautious approach, which tends to limit opportunities for scaling innovation, trying new business models or introducing tools able to generate a significant competitive advantage.

The most widespread technologies in Italian companies

Investment analysis can be analysed together with an overview of the technologies implemented.  ERPs are the most common solution: 73% of businesses use one, confirming them as a key element in core processes.  Less widespread but still significant is the use of CRMs, present in 34% of companies, while MES systems (used for the control and advanced management of production) have achieved an implementation level of 32%.

Apart from these consolidated solutions, the picture is more fragmented.  Cloud tecnologies, despite their key role in any scalable digital transformation strategy) are only present in around a quarter of companies.  Augmented and virtual reality applications reach 22% (a relatively encouraging figure, but still not sufficient to reflect a mature, widespread use).

The proportion who have implemented some of the most essential technologies for advanced industry 4.0 is much more limited: Digital Twins are used by only 9% of businesses and advanced robotics by 12%.  The poor takeup of these digital tools reflects how many companies are still in a phase of infrastructure digitalisation rather than of actual innovation.

As for emerging technologies, it should be noted that despite artificial intelligence possibly being the technology with the greatest potential for transformation, its introduction is still being delayed by the slow processes of company digitalisation in Italy.

So far, 55% of companies have not introduced any AI solutions, 34% are in an experimental phase (often involving small pilot schemes) and just 3% use artificial intelligence as part of a consolidated, structured approach.

The number using Generative AI is even lower.  Only 9% of companies have already introduced this kind of tool into company processes, a further 32% are testing it, while AI agents are being used in pilot schemes in 12% of organisations (mainly in the customer service, marketing or research and development departments).

This limited introduction of AI is not due to a lack of awareness of its value, but rather to difficulties in developing truly efficient ways of using it, building adequate datasets, integrating the new technologies into existing systems and training professionals to to manage its complexities.

The main barriers to company digitalisation in Italy

Many of the dificulties highlighted above are reflected in the main issues perceived by Italian companies.  The most critical barriers to company digitalisation in Italy involve three macro areas:

• skills: 42% of companies state that they do not have enough staff with the necessary skills to understand and implement complex technologies such as AI, data analytics and advanced automation;
• data quality: 40% emphasise that a lack of high quality, well-structured and well-governed data makes it difficult to introduce data-driven technologies;
• system integration: 38% cite difficulties integrating new digital solutions with legacy systems.

It is interesting to observe that only 11% of businesses perceive the cost of these technologies to be a significant hurdle.  In reality however, it is important to note that the basic cost of the licences might seem affordable, but it is only a small part of the overall investment required.  Many Italian companies struggle to grasp the true scale of investment needed in order to implement AI solutions or similar advanced technologies.

The main hurdles are cultural, organisational and infrastructural.  It takes time, training, adequate technological structures and an in-depth review of processes before the benefits can be enjoyed.  One key point to be noted is the skills required, because that is undoubtedly the most challenging issue for most businesses.

Finally, it is important to mention cybersecurity, which despite being a key element of digitalisation, is often only superficially considered.  Only a well-structured, consistent protection strategy can ensure that digital systems do not become vulnerable to attack, at a time when the exposed areas inevitably increase.