Has Digital Transformation Been a Success? Here’s What the Research Says

Transformation is the name of the game for the modern enterprise. In the push to become ‘future-ready’, businesses across the globe have shifted their focus onto driving efficiency and improving their ability to adapt to changing market conditions and consumer preferences.

At the heart of this is digital transformation (DX) – the use of digital technologies to improve processes, culture and customer experience. The concept can be traced back as far as 2015, but in the wake of COVID-19, interest in DX initiatives soared as businesses looked to prepare themselves for the next crisis and shift in the market.

So, three years on from the outset of the pandemic, it’s time to ask the question – has digital transformation been a success?

To find out, we asked 219 IT professionals to rate the success of their DX journeys and list the biggest challenges they’ve encountered.

For businesses that have already commenced their path to transformation, it’s a chance to avoid potential disaster when implementing these new technologies companywide. For those that are just beginning, it’s the perfect opportunity to learn from the mistakes of others and refine your transformation strategy.

Where are businesses on their DX journeys – and how do they rate their success so far?

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%

The majority of businesses in our survey claim they are at stage 3, with ‘pockets of successful implementation’ – just 16% had proceeded to the final stage: company-wide rollout.

When asked to rate the success of their DX programs, just 3% claimed it was ‘poor’. The majority ‘58%’ rated it ‘good’, identifying room for improvement, especially as only 15% went as far as to state it was ‘excellent’ and almost a quarter (24%) said it was just ‘fair’.

What transformation challenges have they faced?

The challenges cited by respondents in our research include:

• Economic uncertainty impacting budgets: With the economy taking a downturn and a recession on the cards, many IT leaders have found their budgets impacted as a consequence.
• Competing tech priorities: DX initiatives can involve any number of tools and technologies and be just one aspect of an organization’s technological initiatives, and in such an unpredictable economic climate, it’s common for other projects to take priority and slow down DX efforts.
• Change management issues: Transformation by definition involves change, which can create resistance in employees, from end users all the way to the C-Suite, making managing and communicating change effectively an invaluable skill for DX.
• Security and compliance issues: In the same regard, technological transformation brings with it significant change in both tools and processes – all of which can present new security and compliance conundrums for IT teams.
• Expensive or unforeseen costs: All our best estimations and calculations for potential DX costs can’t guard for the unexpected. And, with markets and prices so volatile (not to mention major issues with supply chains), every business should expect the unexpected.

Learn more: Poor Change Management is Costing Business Millions: 2023 Research

When these challenges are mapped against our respondents and their DX progress, we get a clearer idea of which obstacles IT leaders encountered at each stage of their journey.

• For respondents in Stage 1, economic uncertainty around budgets and competing tech priorities hinder the planning process, preventing IT leaders from knowing exactly how much they can allocate to their transformation initiatives. Dealing with change also emerges as a significant issue, as employees from decision-makers down to end users voice their concerns.
• In Stage 2, budget issues amid economic uncertainty and other tech priorities continue to impact early transformation piloting.
• Respondents in Stage 3, as transformation begins to be implemented and take shape in the business, find new challenges emerge. Security comes to the fore for over half (53%) of respondents as new innovations present compliance issues, while unforeseen costs also begin to mount up.
• Stage 4 appears to be one of the most challenging stages. Two-thirds of respondents here (66%) find budget challenges with budget impacting their ability to rollout their transformations companywide, while the implementation of these initiatives continues to be held back by security and compliance issues.

What are IT leaders prioritizing at each stage of the DX journey?

Across all stages of the DX journey, strengthening cybersecurity is a priority – particularly once it comes to rolling out initiatives companywide.

The focus on cybersecurity across the entire process reflects both the challenges of integrating new initiatives alongside existing processes and applications and the pressure on teams to implement these innovations to keep the business competitive.

Learn more: Where Should IT Leaders Prioritize Their Digital Transformation Investments?

The popularity of cybersecurity as a priority at both the beginning and the end of the DX journey also illustrates that lessons have been learned since the beginning of the rush to transform and innovate. Businesses at stage 4 are trying to make sure their initiatives and innovations are secure and compliant, while those at stage 1 are looking to ensure they’re compliant from the outset.

As a business imperative for any enterprise looking to compete and adapt to changing market conditions, it’s too early to make a broad statement on the success of digital transformation. However, the research paints a picture of unforeseen internal, external and security challenges that all IT leaders and enterprises would do well to pay attention to.

Learn more: The 8 Most Important Technologies that Enable Transformation 

Access The State of Digital Transformation Research Report

For more detailed insights into how IT leaders have navigated digital transformation, their investment plans and their priorities and targets going forward, download the full report today.