Europe Has Not Gone Digital Yet. What This Might Mean for Your Business, Zoho's Digital Health Study in Europe Reveals
- Sarp Oktay
- Apr 15
- 4 min read
The 2024 edition of Zoho's digital health study across 5 markets offers insights into the digital transformation of European companies, highlighting both challenges and opportunities. Digital transformation is still a current and impactful topic, however, it may not be happening as fast as you would imagine. This might mean your business still has the opportunity to digitalise and regain the upper hand over your competitors. Read until the end to see what the study findings may mean for your business.
A quick takeaway: Large enterprises, especially those using AI technologies, are generally better positioned in digital health. The study insights reveal that the technological maturity to use AI effectively relies on the foundations laid by the good digital health of an enterprise. The increasing adoption of cloud-based platforms drives digital transformation and good digital health.
Study Methods & Demographics
The report employs a scoring system to classify respondents' digital health into three categories: 'good', 'average', and 'poor'. Higher scores indicate better performance in these areas.
In this study, large businesses are defined as those with 1,000 or more employees, medium businesses with 250 to 999 employees, and small businesses with 25 to 249 employees.
The Digital Health Study employs a scoring system to evaluate critical aspects such as innovation, adoption of new technologies like AI, technical challenges, platform stability, and IT management. Conducted by Censuswide, the survey included 1,503 senior decision-makers in digital transformation from companies with 25 or more employees across five markets.
Current State of Digital Health in Europe
As of 2025, only 25% of European companies have good digital health, with 35% at a moderate level, and 40% struggling. Germany leads with 33% of companies in good digital health, followed by the UK (28%), Spain (27%), France (20%), and the Netherlands (19%). Large companies fare better, with 33% achieving good digital health.
Challenges with Cloud and Digital Platforms
Companies with good digital health are four times more likely to adopt cloud-based applications. While integration issues have decreased from 37% to 26%, new challenges like high long-term costs and inconsistent user experiences have emerged. Successful digital transformation requires thorough preparation and employee training. User-friendly software like Bigin by Zoho CRM can simplify this process for SMEs.
Factors Influencing Digital Supply Decisions
When purchasing digital tools, companies consider price (34%), customer service contribution (33%), and integration with existing applications (33%). Those with good digital health also prioritize user experience and alignment with overall digital strategy. Priorities vary by country:
- France and the Netherlands prioritize price.
- The UK focuses on customer service contribution.
- Germany values ease of use.
- Spain emphasizes integration with existing applications.
Compared to 2023, companies now prioritize user experience and cost savings over integration and strategy alignment.
Challenges and Benefits of Digital Transformation
Only 12% of companies have faced no issues during digital transformation. Common problems include needing external resources (32%), implementation challenges (31%), and employee struggles with new systems (26%). Despite these challenges, benefits include improved customer experience, automation, and efficiency. Departments like marketing (40%) and customer service (39%) have adapted quickly.
Artificial Intelligence and Digital Transformation
Most leaders view AI as crucial, with 20% considering it a critical technology. 44% of companies with good digital health successfully use AI, compared to 19% with moderate and 6% with poor digital health. AI enhances automation, efficiency, and prediction, enabling data-driven decision-making.
Macroeconomic Effects on Employees and Companies
During economic challenges, leaders motivate employees through flexible work models (39%), clear communication (39%), and providing the right technology tools (39%). Germany leads in providing technology tools (44%), while the Netherlands has the lowest rate (33%). Companies with good digital health use these methods more frequently.
Digital transformation leaders are optimistic about the future, with 80% expecting business conditions to improve in the next year.
Data Privacy
Companies with good digital health prioritize data privacy more than others (57% vs. 44% vs. 30%). They conduct regular training (43%), implement transparent policies (42%), and comply with regulations (41%).
Importance of Digital Health in Businesses and SMEs
Digital health is crucial for achieving quick gains and remaining competitive. It enhances customer satisfaction, employee retention, and real-time performance monitoring. A sound digital strategy ensures success and adaptability in challenging economic conditions.
For SMEs, investing in digital health can significantly improve efficiency, customer experience, and overall competitiveness. By focusing on user experience, integration, and employee training, SMEs can overcome digital transformation challenges and achieve long-term success.
How SMEs Can Get Ahead of the Competition
The 2024 Digital Health Study reveals that just 25% of European companies have strong digital foundations, leaving the majority still navigating their transformation journey. For SMEs, this presents a unique window of opportunity. While larger companies may have more resources, they often move slowly with tens of stakeholders to sign off on new tools. Smaller businesses can act faster, test tools like cloud-based CRMs or AI solutions, and adapt without heavy bureaucracy.
Those already ahead are seeing real benefits—greater efficiency, stronger customer experience, improved team morale and a more optimistic outlook. Yes, there are hurdles, like costs, integration hurdles, or getting employees up to speed. However, with a focus on user-friendly systems and smart training, they're manageable. Especially, departments like marketing and customer service are adapting the fastest, becoming leaner and more responsive.
For SMEs, this isn’t about outspending the competition. It’s about outpacing them with focus and flexibility. Getting digital right now could quietly shape a long-term advantage.
Looking for Support with Your Business's Digital Transformation?
At Sarem Consulting, we help SMEs digitalise and automate their business processes and drive efficiency by making the most of each dollar invested in new and existing digital tools. To find out more, you can read about our client success stories and get in touch with us. We are proud to see our clients thrive and succeed!
Written with the courtesy of Cloudyflex & Zoho.
References:
Comments