“Digitization Measures in DAX 40 Companies: Progress and Deficits”

A study shows that the companies listed in the DAX 40 are reporting more and more in detail about their digitization measures. Nevertheless, numerous companies still have deficits.

For a joint analysis by KPMG in cooperation with Prof. Dr. Dirk Stein and Prof. Dr. Tobias Kollmann, the annual reports of DAX companies for 2021, including non-financial reporting, were evaluated.

The reports deal with topics such as cost reduction, employee qualification, customers, growth and future technologies and also give key figures for digitization. However, these key figures are presented very differently, which makes comparisons between companies difficult.

Digitization as a means of reducing costs

Compared to previous years, the topic of cost reduction through digitization has gained in importance. Many companies see digital transformation as a way to achieve operational excellence in order to make the core business more profitable or to optimize it.

However, there are often gaps in the implementation of digitization strategies and the assignment of corresponding responsibilities as well as in internal know-how. And few companies have a Chief Digital Officer (CDO).

Hardly any explicit digital directors

Only five DAX companies have an independent Chief Digital Officer (CDO) who explicitly embodies the responsibility and competence for digitization at board level in a separate department: E.ON, HeidelbergCement, Infineon, Qiagen and Vonovia.

In 72 percent of the DAX companies, the responsibility and competence for digitization is firmly anchored at board level and usually goes hand in hand with other functional tasks, such as those related to CEOs or CTOs. The reports on key figures for digitization are very different and make cross-company comparisons difficult.

Employees on the supervisory board need more digital skills

In about 80 percent of the companies in the DAX, there is a certain degree of digitization responsibility and competence on the employer side of the supervisory board. In contrast, only 25 percent of the companies on the employee side have the corresponding digital competence among the members of the supervisory board, which shows a clear need to catch up in this area.

Strengthening the digitization skills on the employee side would have a significant impact on the success of the company. In particular, since the Supervisory Board as a body jointly discusses and decides on key investment decisions in the area of ​​digitization.

Lack of corporate digital responsibility

In their reports, none of the 40 companies examined provided specific information about possible corporate digital responsibility. This is surprising as companies are likely to be increasingly asked to account for how they handle data in relation to their business processes and models in the future.

Lack of incentives for successful digitization

Digitization is only an explicit remuneration component at board level for 18 of the 40 DAX companies, while it plays no role for 22 companies. In most cases, there are therefore no concrete incentives to implement a digitization strategy.