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Digital transformation in Russia:
keeping competitive

The consulting company DT-Global Business Consulting together with Linxdatacenter have presented the research of digital transformation potential in the Russian Federation. According to its conclusions, top managers of Russian companies recognize that the digital vector of business development will have priority in the near future. Cloud technologies, e-commerce, advanced IT infrastructure and competent staff will play a notable role in this process.

  • 80% of Russian companies’ managers plan to increase their investment in digital transformation in 2019.
  • More than 60% of managers note that they have already arrived at the initial stage of digital transformation and are now planning or implementing first steps in this direction.
  • Among other companies, 28% have already stepped onto the “digital rails” of development and observe impact on their business. Also, 10% of companies believe that the work they have already carried out in this area allows them to consider themselves “leaders of digital transformation”.
  • Although at 86% of Russian companies the digital component is responsible for less than 20% of their aggregate income, this indicator is rapidly growing.
  • 9% of Russian businesses today collect from 20% to 39% of total turnover from the digital sector of their business. According to the data of DT-Global Business Consulting, growth rate in this segment exceeds by far traditional forms of commercial operation.
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Heiko KoopCEO of Linxdatacenter

Digitalization today is in the phase 2.0. The first stage was implementation of digital components by nearly all organizations, and the current stage assumes upgrade of digital systems to conform to requirements of the future. This upgrade includes compliance with all legal requirements and top level of fault-tolerance and data protection. All these tasks today are best solved by clouds: these technologies determine potential of a company’s digital growth today. In many regards, modern digital projects are not merely tools for the company’s profit increase, but a way to maintain existing level of business efficiency. All business processes become digital and are implemented around three major tasks: efficient data storage, data exchange and data analysis in due order to provide results required by the business. Clouds help to carry out migration of business processes from legacy systems to state-of-the-art platforms and digital tools easily and effectively. Data centers as one of the key elements in digital transformation, play a central role in these processes. Their functionality enables a gradual transfer from outdated IT infrastructure to most state-of-the-art configurations and architectures and, consequently, better business results.

Daniel ThornileyPresident of DT-Global Business Consulting

General macroeconomic situation in Russia today appears quite favorable, and all businesses in the country are involved in the digital transformation processes in one way or another. 75% of them undergo digitalization for internal reasons (optimization of expenses, management etc) and for the purpose of improving customer experience. 4% of top managers told us that digital initiatives have already proven themselves completely. 59% of managers are not yet satisfied with digitalization projects, while others are more or less satisfied. This situation is typical around the world. Russia repeats all worldwide trends in this aspect. One of the key drivers of economy digitalization is the e-commerce segment: total sales volume via this channel in Russia has reached 29 billion Euro today (estimate of DT-Global Business Consulting) with a 39 billion Euro forecast for 2019. Same indicator in the United States exceeds the Russian one thirteenfold and in China fifteenfold. On the global scope, including Russia, business digitalization follows one of three major scenarios. First scenario: the company strives to keep its traditional operation unchanged and develops digital projects independently. Second scenario: mutual penetration of traditional and digital components. This is quite a difficult way company-wise but about 40%-50% of businesses today practice that approach: digital elements are gradually integrated into traditional departments of the business. Finally, the third scenario requires creation of new business models that have not existed before introduction of digital technologies, for the company to develop on their basis.

Robert FarishVice President of the analytical company IDC in Russia and the CIS countries

Digital transformation means that there are new competitive advantages in speed and in digital technologies, and new opportunities from applying them to different areas of business. The biggest challenge is cultural. Digital transformation implies a change in the way companies are run: values, traditional hierarchies and measures of success change. That’s difficult to address. And the more established an organization, the more difficult it is. The state will be playing a significant role in the digitalization processes across the country: this trend is observed in the development strategies of large companies with the state’s share interest, from banking to mining and power-supplying industries.

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Linxdatacenter with headquarters in Amsterdam, the Netherlands, is a global provider of high-end colocation, cloud and connectivity solutions for business. Active since 2001, Linxdatacenter operates in Central and Eastern Europe, Russia, Asia and the Nordics.

Linxdatacenter provides cloud and colocation solutions at its TIER III compliant data centers in Moscow and Saint Petersburg, as well as at partner data centers in Warsaw, Shanghai and Hong Kong. It also offers fast connectivity to global cloud services, such as Amazon Web Services and Google Cloud Platform.

The company’s data centers are certified under ISO 27001, ISO 9001, PCI DSS and SAP Cloud and Infrastructure standards. High operation standards of Linxdatacenter are confirmed by the Uptime Institute's Management & Operations Stamp of Approval. The company enables international enterprises to optimize their IT infrastructure and to comply with personal data legislation.

About DT-Global Business Consulting

DT-Global Business Consulting is a consultancy company offering advice and information on global business and emerging markets with a focus on the CEE-Europe and Russia-CIS region. Among other services, DT-Global Consulting offers membership in private corporate Groups and comprises the largest network of senior executives of multinational companies operating in CEE and the Russia/CIS region.

Currently we work with 5,000 executives in over 350 global and regional companies including many of the Fortune-500. We help members make better plans and strategic decisions; gather regularly in key business hubs to network, benchmark and build strong business relationships that last: some of our Group member clients have been with us for 20-30 years!

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