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Companies will increase digital transformation investment in 2019

By Tim Sandle     Jan 16, 2019 in Business
The vast majority of businesses will increase their investments in digital technology over the coming year, and many expect IT modernization to lead to cost savings and greater profitability, according to DXC Technology.
The increased push for digital technology and earmarked investment are some of the findings from a new global survey conducted by The Economist Intelligence Unit (EIU) and commissioned by DXC Technology (a leading end-to-end IT services company). The EIU surveyed 621 senior executives in September and October 2018 to discover where companies are in their digital development pathway.
The study, titled “2019: The Year of Digital Decisions,” explores how companies define digital transformation, as well as the barriers and resulting business outcomes of transformation efforts.
Among the most significant findings is the impact of digital technology upon increased expenditure. Here 83 percent of respondents stated they expect their organizations to increase their digital investments in 2019. Furthermore, 40 percent of respondents assess that their organizations are set to increase their investments in digital transformation projects by 11 percent or more.
While digital technology requires firms to spend more there is often payback. A second important area is with revenue generation. With this aspect, 68 percent of the companies polled said the annual profitability of their organizations has increased over the past three years due to their organizations’ digital strategy.
A third important area mentioned was agility, where 75 percent of respondents said digital technology can improve flexibility and adaptability, especially in these more uncertain economic times.
Furthermore, profitability linked to digital transformation initiatives is unlikely to stand still, provided the right digital products are selected and with the workforce being behind the initiatives. In relation to the future, 74 percent of those polled said they fully expect profitability to rise over the next three years.
In relation to revenue, as a factor influencing profitability, is reductions in operating costs. Again, the successful implementation of digital technology was deemed to be a factor, with 75 percent of the companies in the survey stating they expect the cost savings from new information technology services and associated modernization to be critical to helping to fund further digital transformation investments.
Moving digital transformation forward is not only about selecting the right technology; people have to move forward with the vision too. In relation to the human factors, 72 percent of companies polled said they agreed that a change in workplace culture is critical to implementing a successful transformation.
Barriers identified that get in the way of digital transformation were identified by the respondents as “cost or lack of funding” (by 35 percent), showing how investment is essential for success. The most significant barrier was deemed to be security concerns (as cited by 40 percent of companies).
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