While having a mature digital enterprise helped organizations to better survive – and even thrive, in some cases – the pandemic, that’s not the primary reason why organizations will continue to invest in their digital transformation efforts. According to new research from consultancy Deloitte, businesses will continue to invest in their digital transformation capabilities to innovate rapidly and to survive competitive battles in the marketplace.
Deloitte’s survey found that enterprises believe such ongoing investments in digital transformation will continue to deliver benefits, such as enabling them to innovate more quickly, modernize their business-technology systems and become more resilient. The pandemic proved an unfortunate test of such business resilience, with more than 75% of respondents saying that their digital capabilities helped them better meet the business challenges posed by the pandemic.
The survey also found that enterprises plan to increase their digital investments and to do so considerably. Respondents indicate, on average, planned investment of nearly $13 million on digital transformation in the next year — a 15% increase from the prior year’s spend.
These findings mirror those of another survey released this week from software provider Rimini Street, which found digital transformation is one of the top five priorities among CFOs, and that 71% of CFOs believe that such investments are essential to the success of their businesses. Further, 77% of CFOs said they would work with their CIOs to help find funding for digital transformation efforts — if there was a strong ROI demonstrated.
Perhaps most noteworthy from the Deloitte survey is that, while digital platforms and digital transformation efforts are essential, they are not a competitive advantage by themselves. It’s what businesses do with those platforms that matter.
Additionally, most Deloitte respondents see plenty of competitive upheavals ahead: most respondents feel it is most likely that their main competitors will be a startup or current digital native competitor in as little as five years. Less than one-third of respondents believe that their current competitors will remain competitors five years from now.
To win funding for digital transformation and innovation initiatives, the Rimini Street survey suggests CIOs will most likely succeed by not pushing innovation for its own sake, but by seeking out initiatives that will generate a strong return. In that survey, CFOs made it clear that optimizing existing technology, revenue-generating endeavors and improving processes and staff efficiencies were their top three priorities.
In that race to continuously optimize business technology systems, many CIOs in Deloitte’s survey also see a downside. More than half of those questioned said that the rapid pace of change is harmful to both their organization and their customers, and 75% said the rapid change had created significant upheaval in business leadership or their board during the past 24 months.
Whether enterprise business and technology leaders want a world with such rapid change doesn’t matter: it is the world in which they must compete. And those enterprises that succeed in the next few years will be those that not only make the right investments in digital transformation, but those that figure out the best ways to innovate and connect with customers by leveraging those investments.