Where Should IT Leaders Prioritize Their Digital Transformation Investments?

Digital transformation (DX) has been the number one buzzword in the IT landscape since the emergence of COVID-19. To facilitate the shift to remote and hybrid working and ensure business continuity, IT departments across the globe had to work overtime to accelerate digital initiatives and implement the latest technologies and innovations.

Now that the dust has settled, hybrid work is becoming the norm and the ‘new normal’ is well and truly here, we asked 219 IT professionals to rate the success their DX journeys and list their priorities moving forward in order to better understand how businesses approached transformation and the lessons IT leaders can learn.

We asked our respondents to identify which stage of the DX journey they’re currently at:

• Stage 0: We haven’t started yet – Less than 1%
• Stage 1: We’re putting a case together and developing a plan – 18%
• Stage 2: We’re piloting small transformation – 20%
• Stage 3: Pockets of successful implementation – 46%
• Stage 4: Company-wide rollout – 16%

When we asked our participants to rate the success of their DX programs, 15% claimed it was ‘excellent’, while the majority ‘58%’ rated it ‘good’. Over a quarter (27%) rated it as just ‘fair’ or even ‘poor’, indicating that there’s significant room for improvement and plenty for businesses to learn.

What are the biggest digital transformation priorities this year?

Strengthen cybersecurity

With 70% of IT security leaders agreeing that more employees using personal devices has weakened their security posture and reports of cybercrime rising since the move to remote and hybrid working, it’s no surprise that strengthening cybersecurity is an investment priority for 60% of our respondents.

Increase innovation

Far from levelling the playfield, digital transformation has split businesses into two camps – those that are willing to push the envelope and embrace the latest trends and technologies, and the stragglers that fall behind. Innovation is a central component of digital transformation, and subsequently a priority for 46% of respondents.

Eliminate operational inefficiency

Adoption of automation, artificial intelligence (AI) and machine learning (ML) has accelerated in recent times as the technology evolves and businesses look for simple ways to reduce operational costs and increase efficiency. Using automation and process transformation to eliminate operational inefficiencies was selected by a significant 44% of respondents as an investment focus for 2023.

Replace legacy IT systems

The fast-tracking of remote and hybrid work and cloud migration quickly rendered traditional and legacy systems obsolete, and replacing these with new technologies was a priority for almost half (36%) of respondents.

Improve talent retention

COVID-19 didn’t just shake up the landscape for businesses, but for employees, too. The Great Resignation went some way in showing that businesses had failed to keep up with the needs of their employees, and getting better at holding onto talent is a priority in the next year for over a third (35%) of IT leaders.

Improve speed to market of existing services/products

With customer demands rising and automation giving small, nimble companies the ability to compete with their larger and more established counterparts, improving speed to market of existing services/products to keep up with the competition was highlighted by almost a third (32%) of IT leaders as an investment priority.

Improve CX

Consumer expectations and demands are always shifting, but in the wake of COVID-19, they’re rising higher than ever and businesses are struggling to keep up. Improving the customer experience through transformation and the adoption of new technologies is key focus for 26% of our respondents.

Create new revenue streams

Keeping up with both the demands of customers and the latest trends and innovations often means identifying opportunities to create new revenue streams, which 21% of IT leaders identified as a priority for the coming year.

Why are organizations investing in DX?

Our respondents cited various reasons for their investment in digital transformation, but taking a look at organizations who had the most success with their initiatives can help IT leaders where to prioritize their investments.

Respondents that rated their transformation journey as ‘good’ were more likely to have invested in digital transformation for innovation and growth (53%), strengthening cybersecurity (41%), improving integration with other systems (33%) and enhancing CX (20%) – progressive business outcomes that are more associated with the later stages of DX.

In contrast, businesses with ‘fair’ DX results were more concerned with improving business agility (48%), eliminating operational inefficiencies (50%), replacing/modernizing legacy processes (33%) and reacting to increased market pressure (40%) – elements that point to the lack of a long-term strategy and are more reactive than proactive in nature.

What technologies are IT leaders using to enable transformation?

Cloud adoption has quickly become the norm for modern enterprises, and unsurprisingly 84% of IT leaders are making use of it to enable organizational transformation. Two-thirds (67%) are harnessing data and analytics to fuel decision-making and efficiency, while over half (52%) plan to utilize the Internet of Things (IoT) to drive their transformation initiatives.

Mobile (i.e. 5G) is another key element of DX initiatives, while AI, ML and robotic process automation (RPA) are all experiencing significant uptake among enterprises looking to enable transformation.

Access The State of Digital Transformation Research Report

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