26 Feb 2025

UK Business Digital Health: Signs of Improvement, But More to Be Done (by Zoho)

Sachin Agrawal, Managing Director of Zoho UK, a provider of business software, explores the state of digital health in UK businesses, highlighting progress, challenges, and key transformation trends.

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.

Laura Foster

Laura Foster

Associate Director - Technology and Innovation, techUK

Laura is techUK’s Associate Director for Technology and Innovation.

Laura advocates for better emerging technology policy in the UK, including quantum, future of compute technologies, semiconductors, digital ID and more. Working alongside techUK members and UK Government she champions long-term, cohesive, and sustainable investment that will ensure the UK can commercialise future science and technology research. Laura leads a high-performing team at techUK, as well as publishing several reports on these topics herself, and being a regular speaker at events.

Before joining techUK, Laura worked internationally as a conference researcher and producer exploring adoption of emerging technologies. This included being part of the team at London Tech Week.

Laura has a degree in History (BA Hons) from Durham University and is a Cambridge Policy Fellow. Outside of work she loves reading, writing and supporting rugby team St. Helens, where she is from.

Email:
[email protected]
LinkedIn:
www.linkedin.com/in/lauraalicefoster

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Rory Daniels

Rory Daniels

Head of Emerging Technology and Innovation, techUK

Rory joined techUK in June 2023 after three years in the Civil Service on its Fast Stream leadership development programme.

During this time, Rory worked on the Government's response to Covid-19 (NHS Test & Trace), school funding strategy (Department for Education) and international climate and nature policy (Cabinet Office). He also tackled the social care crisis whilst on secondment to techUK's Health and Social Care programme in 2022.

Before this, Rory worked in the House of Commons and House of Lords alongside completing degrees in Political Economy and Global Politics.

Today, Rory leads techUK's Emerging Technology and Innovation activity, working with many of the UK's most innovative tech companies to convene key stakeholders, work through key challenges and opportunities for industry, showcase best practice, and shape Government's thinking around future technologies, sectors and industries.

Focus areas include Robotics, Immersive, Web3, Metaverse, Photonics, Space, Gaming, Creative, Innovation policy, university spin-outs, and Futures & Horizon Scanning.

Email:
[email protected]
LinkedIn:
https://www.linkedin.com/in/rorydaniels28/

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Ella Shuter

Ella Shuter

Junior Programme Manager, Emerging Technologies, techUK

Ella joined techUK in July 2025 as Junior Programme Manager for Emerging Technologies.

In her role, Ella supports the design and delivery of four to six-month sprint campaigns. These identify emerging technologies of interest to members and Government, share industry best practice, champion relevant sectors and industries across the UK, and work through key challenges and opportunities to drive the development, application and commercialisation of these technologies.

Before joining techUK, Ella completed an internship at Digital Catapult, supporting across public affairs, policy and the organisation's programmes. She also has experience working in an MP's Parliamentary and Constituency Office.

Ella holds a BSc in Politics and International Relations from the University of Bristol.

Email:
[email protected]
LinkedIn:
https://www.linkedin.com/in/ella-shuter-264158244/

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Elis Thomas

Elis Thomas

Programme Manager, Tech and Innovation, techUK

Elis joined techUK in December 2023 as a Programme Manager for Tech and Innovation, focusing on Semiconductors and Digital ID.

He previously worked at an advocacy group for tech startups, with a regional focus on Wales. This involved policy research on innovation, skills and access to finance.

Elis has a Degree in History, and a Masters in Politics and International Relations from the University of Winchester, with a focus on the digitalisation and gamification of armed conflicts.

Email:
[email protected]
Website:
www.techuk.org/
LinkedIn:
https://www.linkedin.com/in/elis-thomas-49a1aa1a1/

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