UK Business Digital Health: Signs of Improvement, But More to Be Done
Insight by Sachin Agrawal, Managing Director, Zoho UK
As we enter 2025, digital transformation continues to shape UK businesses. However, according to Zoho’s latest European Digital Health Study, only 28% of UK businesses have achieved good digital health. While this is a 9% improvement from 2024, a significant portion still struggles to fully leverage digital tools and technologies.
Our study, which surveyed 1,503 senior decision-makers across Europe, assessed digital health based on innovation, platform stability, IT management, and technical efficiency. Larger businesses are leading the way, but SMEs still have work to do.
AI: A Key Driver of Digital Success
AI is playing an increasingly crucial role in business transformation. Companies with good digital health are significantly more likely to view AI as critical to operations (46%) compared to those with average (24%) or poor (6%) digital health. Encouragingly, AI adoption is rising—54% of UK businesses plan to invest heavily in AI this year, up 7% from 2024. The rapid evolution of AI tools in the past two years has driven this momentum, making it clear that AI is now a cornerstone of digital success.
Cloud Adoption and Digital Maturity
Cloud technology remains a crucial enabler of digital transformation. Encouragingly, even businesses with poor digital health are making strides in cloud adoption:
- Only 4% of businesses with poor digital health do not use any cloud platforms, a significant improvement from 16% in 2024.
- Among businesses with good digital health, nearly all (99%) leverage cloud applications to streamline operations.
However, while cloud adoption is growing, many businesses still struggle with system integration and managing the complexity of multiple digital tools.
Challenges in Digital Transformation
Despite the benefits, nearly 87% of UK businesses report challenges in their digital transformation journey. The most common hurdles include:
- High implementation effort (33%) – Teams find digital transformation more resource-intensive than expected.
- Integration difficulties (29%) – Making new technologies work seamlessly with existing systems remains a challenge.
- Complex IT infrastructure (27%) – Managing increasingly intricate tech stacks is proving difficult.
To overcome these challenges, businesses must invest in education, training, and strategic partnerships with technology vendors to ensure effective digital adoption.
The Benefits of Digital Transformation
For those that have successfully embraced digital transformation, the rewards are clear:
- Improved customer experience (51%) – up from 43% in 2024.
- Enhanced operational efficiency (46%) – an 8% year-on-year increase.
- Better employee experience (36%) – up from 32%.
These improvements drive productivity, sustainability, and competitiveness for UK businesses, positioning them for long-term success.
What Businesses Need to Do Next
As digital transformation continues, strategic planning will be crucial for businesses looking to maximise ROI. Success will depend on aligning digital tools with business objectives, adopting scalable technologies, and prioritising employee training. Additionally, fostering strong vendor partnerships will be essential for seamless implementation and support.
Final Thoughts
The UK has made progress in digital transformation, but there is still a long way to go. While businesses recognise the benefits, challenges such as integration, complexity, and training must be addressed. Good digital health is the foundation for long-term success in the digital economy.
As we move forward in 2025, businesses must take a strategic and holistic approach to digital transformation to ensure sustainable growth and resilience.
Download the full Digital Health Study 2024 here or for more information about Zoho, visit www.zoho.com.
Research Note
Censuswide surveyed 1,503 senior digital transformation decision makers in firms with 25+ employees across the UK, France, Germany, Spain, and the Netherlands between 31.10.2024 - 12.11.2024. The UK sample comprises 302 senior digital transformation decision makers, evenly split across all three business sizes - small, medium, and large.
Rory Daniels
Rory joined techUK in June 2023 after three years in the Civil Service on its Fast Stream leadership development programme.
Laura Foster
Laura is techUK’s Associate Director for Technology and Innovation.
Elis Thomas
Elis joined techUK in December 2023 as a Programme Manager for Tech and Innovation, focusing on AI, Semiconductors and Digital ID.