Digital transformation: Necessary, but continues to be no easy feat.
Two new surveys from PwC and AHEAD are going behind the curtain of digital transformation investment, looking at the measurement of DX success — what’s working and what isn’t — and the gap between expectation and reality with respect to payback.
The vital role of infrastructure
Conducted by Hanover Research and commissioned by AHEAD, the State of Enterprise Digital Transformation 2020 studied close to 300 enterprise IT decision makers, finding that 93% of enterprises are undergoing a digital transformation of some kind. The biggest motivating factors were a desire to cut costs (77%) and a need to provide improved customer experiences (71%) — “components that often run counter to one another, yet are critical to a business’s success,” explains the report.
Additional key findings from the State of Enterprise Digital Transformation report are:
- 43% of transformations are led by a CIO or CTO. CEOs, on the other hand, lead 23% of DX efforts
- 58% of transformations are on target or ahead of schedule, while 42% are behind schedule or stalled
- 36% say the combination of legacy system complexity and technical debt are the biggest transformation obstacles, followed by a lack of funding commitment (13%)
- Among those companies on schedule, 94% say their infrastructure and operations can keep up with the demands of apps and software development functions.
In analyzing factors surrounding enterprise digital transformation, AHEAD identified six areas that correlate with success — defined by the organization as a respondent citing their current transformation is on schedule or ahead of schedule.
These six factors are:
- Dedicated Leadership: “Transformations led by a CIO, CEO, CDO, or CTO are 22% less likely to fall behind schedule.”
- An “all-in” approach: “Transformations that are on track are 30% more likely to be full-scale initiatives.”
- Defined strategy: “Enterprises undergoing successful digital transformation are 12% more likely to have a defined digital strategy.”
- Infrastructure: “Businesses that include IT infrastructure as a big part of their digital transformation are 36% more likely to have a successful transformation.”
- DevOps: “Enterprises that take a DevOps approach and see their infrastructure and operations as integrated are 43% more likely to see success in digital transformation.”
Getting to payback
In its 2020 Global Digital IQ research PwC found that just 5% of companies “are doing all it takes” to get to payback from digital — a group they call Transcenders.
PwC identified 4 ways these organizations achieve payback on digital transformation:
- Mandate change: “84% mandate—not just encourage—collaboration and cross-functional work.” As a result, these organizations have a clear direction for digital 96% of the time.
- Invest like you mean it: “Transcenders invest 33% more than other companies in the plumbing—the technology, processes, operating models, and the ways of working—that will drive their digital supremacy.” This has led to a 17% higher profit margin growth at these organizations, and an increase in time spent innovating at 84% of Transcenders.
- Put people first: People are at the core of innovation, and “63% of Transcenders have upended their training process and obsess over getting it right.” At 72% of Transcenders, adoption of new programs and tech is widespread.
- Build resilience: “67% of Transcenders lived through a major disruption—merger or acquisition, business model change, or senior leadership change—in the last two years and have come out stronger.” The payoff is that 90% of Transcenders aren’t falling behind in digital.
As part of the survey, respondents named up to five companies they believed lead in digital. Some of the most repeated names include Sony, Porsche, Facebook, Apple, Walt Disney, P&G, AliBaba, Netflix, Microsoft, Amazon, and more.
