While there has been a rush to digital technologies in the name of digital transformation, it has been almost a given that there will be visible benefits that go with it. Inevitably, executives will be approving huge budgets in the name of turning around their businesses in a matter of months. However, two new studies suggest the benefits of digital transformation don't automatically materialize as soon as the switch is thrown.
For the most part, the benefits aren't being seen yet, as reported in a survey of 501 IT professionals released by Cloud Foundry. Of the total sample, one in five IT decision makers, 21 percent, say they are experiencing the benefits of digital transformation in their organization. Another 32 percent report they hope to see benefits within the next quarter. Finally, one in five respondents expect benefits to be realized within the year and 25 percent don’t anticipate benefits for at least a year or longer.
Other research also points to the long game for digital transformation. A survey of IT professionals published by Webtorials and Masergy also shows most see digital transformation as a long-term process. A majority of IT executives, 61 percent, see ROI as more long-term and strategic than based on short-term results. There's no doubt they see digital transformation as important -- essentially if it helps improving the customer experience. The most important benefit to be gained , cited by 22 percent of the respondents, is enhanced customer experience and ROI, followed by remaining competitive with the industry, cited by 16 percent, and enabling a new business model, cited by 15 percent.
Measuring ROI for digital transformation is tricky, the Masergy report's authors observe. "Dollars spent on technology that improve customer experience do not show an immediate monetary or revenue impact. The payoff comes from increased customer loyalty and subsequent sales in the future. The payoff may also come in the form of a happier workforce, thus reducing the expense of retraining and rehiring employees. This is much more strategic than tactical ROI."
Since ROI for digital tends to show up later than sooner, you can imagine how gaining funding for digital expenditures may be problematic. Accordingly, budget commitments are the leading obstacle to digital transformation, cited by 22 percent. Another 20% say difficulties in gaining executive support and leadership stand in the way. Third on the list was a dearth of skills, seen among 18 percent of companies.
The technology investments seen as key to a digital transformation effort include moving to the cloud, cited by 22 percent, upgrading security, as indicated by 18 percent, 17 percent bringing in data analytics and artificial intelligence to add greater intelligence to their operations.
The Cloud Foundry survey points to cloud computing as the most important step enterprises can take to kick start their digital efforts. In this year's data, for the first time, most companies reached a point where mission-critical apps have been moved to the cloud. Since Cloud Foundry started tracking this topic in August 2016, the number has flipped from a majority on on-premises legacy environments to the cloud. Most organizations have shifted those apps to the cloud, with 51 percent of respondents having mission-critical apps to operating in the cloud and 45 percent still maintaining apps in legacy environments. Previously, the ratio was 53 percent with on-premises to 44 percent in the cloud.
