Organizations and the CXOs tasked with planning their digital transformations are struggling to meet goals and harness technologies essential for the shift, according to research from CI&T, which surveyed 100 digital business leaders across European enterprises.
Just 7% of respondents met or exceeded their digital transformation goals in the past year, with 58% reaching over 60% of their targets and 34% falling short.
While generative AI excites many, there’s a divide: Those closer to meeting goals anticipate its transformative impact, contrasting those lagging behind. Efficiency remains a focal point, especially for leaders meeting their goals, with emphasis on AI implementation.
Two-thirds of survey respondents said they expect budget increases in 2024, indicating accelerated digital shifts amid economic instability. Strategic allocation of resources, particularly for AI, will be crucial, with more than three-quarters (76%) planning to utilize or implement generative AI within 18 months.
The survey results indicated achieving foundational elements like data governance and security would be pivotal to derive value from advanced technologies. Respondents also emphasized improving efficiencies in areas like business intelligence, data governance and organization orchestration.
While IT leaders are under pressure to deliver greater ROI, the survey data indicates many will also have more resources available to them as they do so.
Roughly a third of respondents – 32% – said their budgets had stayed the same since 2022, while 9% saw a decrease, and the remaining 59% said their budgets had increased.
Budgets are expected to rise even more next year, with 66% of respondents saying they expect an increase, 2% expecting a drop and 31% expecting their budget to remain the same.
Kausik Chaudhuri, CIO of Lemongrass, says for businesses to successfully balance growth and efficiency in digital transformation, several key strategies are essential.
“They must align digital initiatives with overarching business goals and employ data-driven decision-making to ensure that the projects chosen drive growth and enhance efficiency simultaneously,” he says.
They must also adopt a customer-centric approach, where the business focus is on meeting customer needs and enhancing their experiences via ML/AI tools such as GenAI or enhanced CRM systems.
“Invest in scalable and flexible technologies like cloud computing and automation that support digital transformation growth to maintain the balance between expanding capability and minimizing any unnecessary increase in resource usage,” Chaudhuri adds.
For successful digital transformation, organizations must also be adept at collecting, storing and analyzing large volumes of data, integrating it from various sources, maintaining data quality and extracting meaningful insights.
“Overcoming these challenges necessitates strategic planning, clear communication, comprehensive training programs, and occasionally, the involvement of external expertise to facilitate a smooth and effective transition,” Chaudhuri says.
Farid Roshan, global head of digital enablement at Altimetrik, suggests organizations craft a well-defined strategy that aligns digital objectives with overarching business goals.
“Strategic investments should be made in technologies that streamline operations, automate tasks, and create new revenue streams, while aligning with the defined goals,” he says. “These technologies and processes must be regularly evaluated and refined based on internal and external feedback to ensure that investments are properly made.”
From his perspective, beginning the transformation process with a strategic, streamlined plan, and aligning all business teams under the same goal ensures continuous improvement in both growth and efficiency outcomes. A complicating factor can be employees and management resisting adoption of new technologies and processes.
“The recent growth of gen AI and fear of job displacement can hinder employees’ adoption of digital business transformation initiatives,” Roshan says.
Scott Wheeler, cloud practice lead at Asperitas, agrees one of the most common stumbling blocks is resistance to change.
“Many efforts at digital transformation often make steel copies of wooden bridges in that new technologies are applied in existing ways,” he says. “There is often excellent resistance to understanding how new technologies can be used differently to achieve new, unique solutions.”
He says its critical to ensure employees are trained on new digital tools and the best practices for using those tools.