Global executives recognize the need to allocate resources for digital transformation efforts if they wish to remain competitive in a highly innovative environment, even considering persistent macroeconomic challenges and an unpredictable business landscape.
These were among the results of an IDC and Insight Enterprises survey of 1,000 respondents, of which 82% said companies must invest in digital transformation or be left behind.
Nearly half (49%) said the ability to keep up with technological innovation compared to competitors is one of the greatest threats to their organizations over the next 12 months.
A similar percentage (48%) said C-suite scrutiny of digital initiatives has risen in organizations over the past year.
A majority of respondents (52%) identified operational resilience as a significant obstacle that organizations must tackle in the upcoming year, closely followed by cybersecurity at 56%.
Within the next 12 months, 34% of organizations plan to allocate resources towards digital transformation to enhance the distribution and monetization of their products and services.
Additionally, a third of respondents said they aim to intensify the digitalization of customer experiences.
Despite the clear recognition for the need to hasten digitalization efforts, respondents indicated a lack of essential technology skills and insufficient resources for change management as the major challenges.
These issues are likely to be made more acute by the desire to integrate generative AI and other complex technologies into the business.
“The biggest surprise from the survey for me was that respondents felt falling behind on digital transformation and innovation posed more of a threat to the business than the potential of a recession,” says Matt Jackson, global CTO of Insight.
He calls this “incredibly telling” about how business leaders around the world understand how fundamental digital transformation is to the short and long-term success of their businesses.
“The answer to who is responsible for an organization’s digital transformation plan depends on the outcome the company wants to achieve,” he adds.
If the objective is to use technology to make its workforce more productive, operations more efficient and ultimately innovate internally, the CIO should be responsible for developing the strategy and overseeing its implementation.
When the objective is to drive external outcomes, like the customer strategy or creating new revenue streams, then line of business leaders, product managers or R&D teams are often best placed to lead those digital transformation strategies.
“Both approaches can, and in many cases should be, executed simultaneously to avoid lagging in either direction,” Jackson notes.
He points out not every company needs to be digital-first; however, every company needs to be intentional about not falling behind the digital transformation adoption curve.
“The reality is that if you’re not focused on digital transformation, then you won’t be competitive in this market because your competitors are adopting these technologies to drive incredible efficiency gains, productivity and empowering top line growth,” he says.
From Jackson’s perspective, organizational change management is what should be front and center from start of planning.
“Every time you introduce a new technology, the business changes and how people work changes,” he says. “Digital transformation is not the big bang–it’s a continuous, evolutionary process, and we need to bring the workforce along that journey.”
Vara Kumar, co-founder and chief product and technology officer at Whatfix, adds the rate of technology change in recent years reflects “tremendous advancements” in technical capacity and the efficiency and power of software tools.
“At the same time, not enough attention has been paid to the end user when implementing these tools,” he says. “Traditional training methods are ill-suited to modern software.”
He adds that often, employees who must use these powerful new tools aren’t given the support they need to fully maximize the return on the company’s software investments.
As a result, adoption flags and the organization leaves money on the table in the form of unrealized productivity gains and possibly even drops in efficiency as employees encounter unfamiliar systems.
“One essential strategy organizations must consider to address this is to focus on ‘userization’, a concept which means making software work for each individual user as much as it does for the company,” Kumar explains.
This involves making it intuitive and simple for users to act and collaborate across their suite of business apps.
“Often, this will involve implementing real-time guidance and other similar capabilities to assist users without removing them from their workflow,” he says. “A focus on userization is constantly augmenting the value of software investments by progressively engaging the workforce more to leverage their power at scale.”
When it comes to digital transformation initiatives, proper planning, communication and supervision are key.