Not Investing in Digital Transformation May be More Harmful Than a Recession

Global business leaders acknowledge the necessity of investing in digital transformation, revealed a survey conducted on behalf of Insight Enterprises. With prevailing macroeconomic challenges and a highly competitive business landscape, these leaders recognize the importance of embracing digital innovation to stay ahead and succeed in today's rapidly evolving environment.

A significant majority of business leaders (82%) believe that investing in digital transformation is crucial for companies, as failure to do so could result in being left behind. Moreover, nearly half of the leaders (49%) view the ability to keep pace with technological advancements compared to competitors as one of the primary threats to their organizations in the coming year. In contrast, only 20% identify concerns related to inflation and the potential for an economic recession as significant risks.

“The number one question I get from clients is: How can I ensure my company will exist in a few years? Companies have been trying for years to address legacy system fragility and optimizing the business through deeper digitization to increase productivity, gain share of constricted markets and shore up organizational resiliency. Now, generative AI has created even more urgency for executives to ready their businesses to stay ahead of their competition in the AI race,” said Matt Jackson, global chief technology officer, Insight.

The Insight Intelligent Technology Report for 2023, which is an IDC InfoBrief, aimed to gather insights on how factors like global economic uncertainty, geopolitical tensions, and other business challenges are impacting digital investments. These insights will provide a comprehensive understanding of how these influential factors are shaping the decision-making process around digital initiatives among business leaders.

Organizations see the value of a digital transformation

According to the report, 52% of business leaders identify operational resilience as a significant challenge that organizations need to address in the upcoming year. Additionally, 56% of leaders recognize cybersecurity as another crucial challenge.

Within the next 12 months, 34% of businesses have plans to invest in digital transformation with the aim of expanding the distribution and monetization of their products and services. Furthermore, 33% of organizations are focused on achieving a more comprehensive digitalization of customer experiences.

The report reveals that the majority of organizations recognize the importance of transforming into digital businesses, with 61% expressing their expectation to witness significant return on investment (ROI) from this transition by the year 2024.

The obstacles to a digital transformation  

When it comes to digital transformation, organizations face several challenges, the most prominent being concerns related to data privacy and security, which are identified by 53% of businesses. Additionally, 39% of organizations cite the lack of essential technology skills as a significant obstacle, while another 39% struggle with insufficient resources for change management. These hurdles are expected to intensify as companies grapple with the implementation of more advanced technologies like generative AI.

A significant portion of digital transformation project failures, specifically 49%, can be attributed to challenges related to integrating IT infrastructure. Additionally, 46% of organizations believe that their organizational strategy is being hindered by legacy technology or technical debt.

According to the survey, 48% of respondents reported an increase in C-Suite scrutiny of digital initiatives within their organizations over the past year.