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Taking the pulse of digital transformation success with surveys from AHEAD and PwC

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Digital transformation: Necessary, but continues to be no easy feat.

Two new surveys from PwC and AHEAD are going behind the curtain of digital transformation investment, looking at the measurement of DX success — what’s working and what isn’t — and the gap between expectation and reality with respect to payback. 

The vital role of infrastructure 

Conducted by Hanover Research and commissioned by AHEAD, the State of Enterprise Digital Transformation 2020 studied close to 300 enterprise IT decision makers, finding that 93% of enterprises are undergoing a digital transformation of some kind. The biggest motivating factors were a desire to cut costs (77%) and a need to provide improved customer experiences (71%) — “components that often run counter to one another, yet are critical to a business’s success,” explains the report. 

Additional key findings from the State of Enterprise Digital Transformation report are:

  • 43% of transformations are led by a CIO or CTO. CEOs, on the other hand, lead 23% of DX efforts
  • 58% of transformations are on target or ahead of schedule, while 42% are behind schedule or stalled
  • 36% say the combination of legacy system complexity and technical debt are the biggest transformation obstacles, followed by a lack of funding commitment (13%)
  • Among those companies on schedule, 94% say their infrastructure and operations can keep up with the demands of apps and software development functions.

In analyzing factors surrounding enterprise digital transformation, AHEAD identified six areas that correlate with success — defined by the organization as a respondent citing their current transformation is on schedule or ahead of schedule.

These six factors are:

  1. Dedicated Leadership: “Transformations led by a CIO, CEO, CDO, or CTO are 22% less likely to fall behind schedule.”
  2. An “all-in” approach: “Transformations that are on track are 30% more likely to be full-scale initiatives.”
  3. Defined strategy: “Enterprises undergoing successful digital transformation are 12% more likely to have a defined digital strategy.”
  4. Infrastructure: “Businesses that include IT infrastructure as a big part of their digital transformation are 36% more likely to have a successful transformation.”
  5. DevOps: “Enterprises that take a DevOps approach and see their infrastructure and operations as integrated are 43% more likely to see success in digital transformation.”

Getting to payback

In its 2020 Global Digital IQ research PwC found that just 5% of companies “are doing all it takes” to get to payback from digital — a group they call Transcenders. 

https://twitter.com/PwCUS/status/1230869930112954368

PwC identified 4 ways these organizations achieve payback on digital transformation: 

  1. Mandate change: “84% mandate—not just encourage—collaboration and cross-functional work.” As a result, these organizations have a clear direction for digital 96% of the time.
  2. Invest like you mean it: “Transcenders invest 33% more than other companies in the plumbing—the technology, processes, operating models, and the ways of working—that will drive their digital supremacy.” This has led to a 17% higher profit margin growth at these organizations, and an increase in time spent innovating at 84% of Transcenders.
  3. Put people first: People are at the core of innovation, and “63% of Transcenders have upended their training process and obsess over getting it right.” At 72% of Transcenders, adoption of new programs and tech is widespread.
  4. Build resilience: “67% of Transcenders lived through a major disruption—merger or acquisition, business model change, or senior leadership change—in the last two years and have come out stronger.” The payoff is that 90% of Transcenders aren’t falling behind in digital. 

As part of the survey, respondents named up to five companies they believed lead in digital. Some of the most repeated names include Sony, Porsche, Facebook, Apple, Walt Disney, P&G, AliBaba, Netflix, Microsoft, Amazon, and more. 

DX Journal Staff
Author: DX Journal Staff

DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.

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Is your organization intelligent?

More than 83% of respondents to a survey by Wipro said their organization is an Intelligent Enterprise or on their way to being one.

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A new study from Wipro shows that Artificial Intelligence (AI), Analytics, Machine Learning, Deep Learning, and Automation are crucial to creating enterprises of the future and that post-COVID, The Intelligent Enterprise will be resilient and able to better manage disruption.  

With 300 respondents in the UK and US — across industry sectors including financial services, healthcare, technology, manufacturing, retail, and consumer goods — the State of Intelligent Enterprises survey revealed that while 80% of organizations recognize the importance of being intelligent, only 17% would classify their organizations as an Intelligent Enterprise.

In the introduction to the survey’s report, Wipro explains that “The Intelligent Enterprise is no longer a futuristic vision. It is a daily imperative.”

“New problems cannot be solved using old methods. The ability – or inability – to make productive decisions now directly depends on an organization’s ability to generate accurate, fast and actionable intelligence to set the correct course.”

One key technology that businesses consider critical is AI. 95% of respondents see AI as critical to Intelligent Enterprises, but only 17% have it deployed across the entire organization.

Additional key findings include:

  • Whether they are already intelligent or working toward it, close to 88% of organizations face challenges.
  • 91% of respondents feel there are data barriers to becoming an Intelligent Enterprise — the most important being data security.
  • 74% of organizations think that investment in technology is the most likely enabler to become an Intelligent Enterprise. 42% of these consider reskilling the workforce as an enabler.

“Organisations now need new capabilities to navigate the current challenges,” says Jayant Prabhu, Vice President & Head of Data, Analytics & AI for Wipro Limited.

“The report amplifies the opportunity to gain a first-mover advantage to being Intelligent. The ability to take productive decisions depends on an organization’s ability to generate accurate, fast and actionable intelligence. Successful organisations are those that quickly adapt to the new technology landscape to transform into an Intelligent Enterprise.”

DX Journal Staff

Author: DX Journal Staff

DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.

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How the pandemic has accelerated the transformation of cybersecurity

The importance of cybersecurity for remote work was a major catalyst for the recent advancement of widespread digital transformation efforts.

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By the end of April, it was evident that COVID-19 had permanently altered the future of work.

So much so that Microsoft CEO Satya Nadella, while delivering the quarterly earnings report to Wall Street, said “we’ve seen two years’ worth of digital transformation in two months.” 

As Microsoft Security General Manager Andrew Conway reports, a major catalyst for such a dramatic advancement of DX was the importance of cybersecurity in ensuring productive remote work. 

For context, in late 2019 we reported on the global surge in spending on cybersecurity products and services — then expected to exceed $1 trillion cumulatively over the five-year period from 2017 to 2021.

Related Reading: How enterprises are facing security challenges

COVID’s impact

To better understand the pandemic’s role in shaping cybersecurity for the long-term, Microsoft surveyed nearly 800 business leaders of companies with over 500 employees in India, Germany, the UK, and the US. The results show that organizations are still impacted by phishing scams and security budgets, that hiring increased in response to COVID-19, and that investment is going into cloud-based technologies and architectures.

(Image via Microsoft)

At the top of the list of challenges reported by leaders surveyed is “Providing secure remote access to resources, apps, and data.”  

“For many businesses,” Conway explains, “the limits of the trust model they had been using, which leaned heavily on company-managed devices, physical access to buildings, and limited remote access to select line-of-business apps, got exposed early on in the pandemic.” 

Unsurprisingly, surveyed leaders identified that the top security investment made during the pandemic was multi-factor authentication. 

Additional insights from the survey include:

  • Anti-phishing technology was most identified as the best pre-pandemic security investment, with phishing threats cited as the biggest risk to security.
    • 90% of indicating that phishing attacks have impacted their organization.
  • A majority of leaders surveyed reported budget increases for security (58%) and compliance (65%).
  • 81% also report feeling pressure to lower overall security costs. 
    • “Business leaders from organizations with resources mostly on-premises are especially likely to feel budget pressure, with roughly 1/3rd feeling ‘very pressured.’”
  • 40% say they are prioritizing investments in Cloud Security, followed by Data & Information Security (28%), and anti-phishing tools (26%).

Conway also identified five ways the pandemic is changing the cybersecurity landscape for the long-term:

 

  • “Security has proven to be the foundation for digital empathy in a remote workforce during the pandemic”
    • A top priority of those surveyed is improving end-user experience and productivity while working remotely (41%).
  • The Zero Trust model will become industry standard 
    • 51% of business leaders are expediting the deployment of Zero Trust capabilities — a security model based on strict access controls where the default is to not trust anyone both inside or outside the perimeter. 
    • 94% of companies report that they are in the process of deploying new Zero Trust capabilities to some extent.
  • The importance of diverse data for improved Threat Intelligence
    • “Microsoft tracked more than 8 trillion daily threat signals from a diverse set of products, services, and feeds around the globe.”
  • The absolute necessity of cyber resilience to business operations
    • “Cybersecurity provides the underpinning to operationally resiliency as more organizations enable secure remote work options.”
    • Maintaining this requires regular evaluation of risk threshold and the deployment of cyber resilience processes.
  • “The cloud is a security imperative”
    • Integrated security solutions are crucial for organizations of all sizes.

 

 

 

DX Journal Staff

Author: DX Journal Staff

DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.

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What digital transformation looks like coming out of the pandemic

59% of executives surveyed say that COVID has created a motivation to accelerate their DX initiatives.

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COVID-19 has disrupted just about every faction of our world. So where and how does digital transformation (DX) fit into the picture now?

“Recalibrating investment priorities to mitigate the risks associated with COVID-19 should continue to be the first priority of any company,” writes EY Canada partner Anthony Rjeily. “But pushing forward with your digital transformation program should still be a priority for the organization.”

Businesses face a wide variety of challenges — shifting customer engagement models online, enhancing digital capabilities of customer service, remote work, an increase cyberattacks and so on, and so forth. Rjeily says long-term successes will come from those driving innovation programs. 

Let’s look at two examples:

When COVID-19 first hit, the retail sector moved online at a near-breakneck speed to drive commerce online. It makes sense that it was easier for businesses with already-existing, scalable digital infrastructure to pivot to the pandemic realities. But as Ryan Talbott writes, this is the new norm for retailers. “A retail organization’s ability to react quickly to changes in consumer behavior has become a key survival skill. Regardless of how good their business contingency plans were, once the pandemic hit, many retailers found they were in a difficult spot and simply couldn’t move at the pace their customers needed them to.”

Within architecture, engineering, and construction industries, COVID-19 accelerated digital transformation plans but many companies still have a long road ahead. Industry experts predicted that 2020 would be a watershed moment for DX integration in these industries and this did, in fact, come to fruition. But going forward, James Dean, CEO of Sensat, says companies in these industries will need to “create a more holistic approach to the entire asset lifecycle, ensuring technology takes prime position in their approach, supporting revenue generation and ensuring continued business success,”

A focus on emerging technologies

According to a new report from KPMG International and HFS Research, 59% technology executives surveyed say that COVID-19 has created an impetus to accelerate digital transformation initiatives. The report, titled ‘Enterprise Reboot,’ found executives have shifted their focus to must-have technologies and more than half (56%) say cloud migration has become an absolute necessity due to COVID-19.

(Source: KPMG/HFS Research)

At the same time, COVID is also a caveat. Approximately four in 10 say they will halt investment in emerging technology altogether as a result of the pandemic. 

“This crisis isn’t affecting all industries equally, but for many of the industries facing crisis, managing the transition to a digital business model is imperative,” explains Cliff Justice, KPMG global lead for Intelligent Automation and US lead for Digital Capabilities. “However, doing so is made more complicated in a time where investments are critical, but cash must be preserved.”

(Source: KPMG/HFS Research)

 

Investment for business survival

“Emerging technologies and new ways of working can play a significant role in the transformation to a more digital economy,” said Justice. “These technologies are helping companies maintain customer and stakeholder trust, keep remote workforces connected, ensure their business is resilient and prepared for disruptions, and build a strong foundation for future product and service innovation.”

Ultimately, the pandemic has placed straight-up business survival as the primary objective for most emerging technology investments. 

“Now more than ever, companies need to make smart investments in emerging technologies if they are to prevail in the medium- to long-term,” said Justice. “Companies who don’t, risk threatening their own survival.”

DX Journal Staff

Author: DX Journal Staff

DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.

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