Today, digital change is commonplace – so what digital transformation insights can we gain from the front lines? Below, we’ll look at research and data from 2019.
In particular, we’ll discover:
- The benefits of digital transformation
- Some of the top challenges
- How companies are investing in digital
- What the future looks like
Hopefully, applying some of this information can help guide your digital transformation programs.
Digital Transformation Insights and Stats: 2018 – 2019
Where does the industry stand when it comes to digital transformation and innovation?
Here is a breakdown by category:
The Value of Digital Transformation
Why invest in digital transformation?
Here are some statistics according to the latest research:
- According to research by Masergy, top benefits of digital transformation include: improved customer experience, a competitive edge, and better process efficiency
- 4 out of 5 respondents say digital transformation is “imperative to survive”
- The World Economic Forum predicts that the economic value of digital transformation will hit $100 trillion by 2025
- In a 2019 report by IMD, 88% of respondents stated that digital disruption would have a major or transformative impact on their industries
- 75% of those respondents also claim to have a digital strategy – yet only 22% claim to have a “coordinated” digital strategy
Clearly, digital transformation initiatives hold value for many organizations.
But the road to digital maturity is not easy.
Let’s look at a few barriers to successful transformation.
Obstacles to Transformation
There are many obstacles to digital adoption and transformation.
A few of the top ones face by companies during 2018 and 2019 include:
- According to Masergy, the top two hurdles to digital change include budget and executive buy-in
- Research by Datrium, focusing on the IT sector, echoed this sentiment – 48.6% identified budget constraints as the biggest barrier to IT transformation
- IMD’s Digital Vortex report found that 53% of organizations’ digital strategies were fragmented – that is, they pursued multiple projects simultaneously, but lacked a holistic approach linked to clear business outcomes
- Uncertainty and confusion was another problem cited by IMD’s report – while 39% of upper level managers felt they were actively responding to digital disruption, only 30% of managers and senior managers agreed
When it comes to achieving success and overcoming these digital transformation challenges, what tactics do most companies take?
Approaches and Strategies
Below are a few statistics that highlight both the technical side of transformation and the business drivers of change:
- According to a Deloitte report focusing on “cyber,” digital transformation investment priorities include: cloud (17%), AI (15%), data analytics (14%), operational technology (14%), and blockchain (14%)
- According to Datrium’s report on IT transformation and modernization, key investment drivers include running AI applications (23.8%), enabling product innovation (21.2%), and delivering improved customer experience (18.2%), among other things
- Masergy’s survey respondents are focusing their efforts on AI, IoT, and Cloud Migration
- 64% use outside digital transformation consultancies and agencies
- Altimeter’s 2018-2019 State of Digital Transformation found that digital transformation initiatives were driven largely by growth opportunities (51%) and increased competitive pressure (41%)
- Most of these transformation efforts focused on modernizing customer touchpoints and enabling infrastructure (more on this below)
- Finally, nearly half of those respondents reported they were building cultures of innovation, “with in-house innovation teams becoming the norm”
These trends offer a good snapshot into the motives behind many digital transformations, as well as the top priorities and investment areas.
One of the hottest topics and biggest trends is reskilling and upskilling.
In fact, this trend is so massive that it has been called a “revolution” by the World Economic Forum and a “crisis” by others.
- The World Economic Forum predicts that 1.37 million workers will be fully displaced out of the roles over the next 10 years, who may be reskilled up to higher-paying jobs, costing an average of $24,800 per worker
- The private sector could reskill 25% of all workers in disrupted jobs with a positive cost-benefit balance
- This number could be nearly doubled if industry-led collaboration could reduce reskilling costs and times by 30%
Another major trend witnessed in today’s digital transformation efforts is the commitment to human experiences.
The customer experience drives many digital transformation agendas.
- A 2018 report by Adobe and Econsultancy found that customer experience was the “most exciting opportunity” for the year ahead
- Organizations that put customers “at the heart of all initiatives” were nearly twice as likely to have exceeded their top 2017 business goals (20% vs. 11%)
- The Altimeter report, mentioned earlier, found that evolving customer expectations and demands was the second major driver of digital transformation (46% of respondents)
- More than 50% of enterprises put customer experience initiatives at the top of their priority list – namely, to deliver “integrated, frictionless, and omnichannel customer experience”
It is no secret that the customer experience has become a top concern for many businesses.
Business blogs and media outlets regularly report on this – and these statistics back up those claims.
Digital transformation and adoption are the new norm.
As we can see from these statistics, these trends are only accelerating.
Investment in digital transformation is growing, and more organizations are making it a top priority.
There are certainly obstacles to overcome – employee training, executive buy-in, and budget constraints, for example.
However, with the right strategies, digital transformation investments can generate significant returns.