The Impact of Digitalization on the Financial Performance of Russian Companies

Abstract

Digitalization is one of the most urgent problems for Russia; companies need to gain a competitive advantage, increase their efficiency and improve business performance. The aim of the study is to identify the relationship between the financial performance of Russian companies and the degree of digitalization of their business processes. Operating profit was chosen as the main financial indicator reflecting the results of the current core activities of the companies. To calculate the digitalization index, McKinsey information data was taken on six parameters: digital marketing, digital product experience, e-commerce, electronic customer relationship management (E-CRM), social networks. The authors used regression analysis of data from 482 companies from 20 industries for the period 2017–2019 as a research method for testing the hypotheses. The findings of the study revealed that the digitalization index has a positive effect on the operational efficiency of companies, but the degree of influence differs depending on the industry, age, and size of the enterprise. The authors concluded that the greatest effect from digitalization is observed among companies with traditionally high digital maturity. These are companies from the financial, technology, or communications industry, where business digitalization is vital and where a slowdown in digital transformation processes can push such enterprises far back in the ranking. Assessing the impact of digitalization of Russian companies on their operational activities will allow the management of companies to choose the right strategy in matters of digital transformation, which will ensure the company’s competitiveness, increase its efficiency and contribute to its development. On a national scale, the results of this study can help decide which industries should be subsidized for digital innovation.