It’s widely reported that the majority of digital transformations are unsuccessful. However, the fact remains that organisations investing heavily in digital transformation are nevertheless “more productive and see overall better performance” than companies with lower levels of investment.
Major benefits of technology investment
According to a new report from Autodesk, when comparing companies that invest more or less than 45% of their revenue in technology, the outcomes for organisations investing above 45% reportedly “create a compelling case that effective digital transformation investments are now essential to business success.”
Half of respondents to Autodesk’s survey of industry leaders whose companies were investing over 45% into technology reported their organisation’s performance as “exceptional.” By comparison, only 32% reported exceptional performance at companies that invest less.
In organisations with higher levels of investment into technology, 34% reported that their companies were keeping up with changes in their industry “very well,” compared to 25% at companies investing less.
Most importantly, perhaps, respondents reported significant productivity gains as the direct result of technology investment. Those citing productivity as the top benefit of digital transformation said, on average, that digital investments have improved productivity by 62%. Profitability, customer satisfaction, sustainability, and collaboration were all reported as benefiting from higher levels of digital transformation.
Major barriers to digital maturity
The percentage of digital transformations that fail is as high as 70%, according to a 2021 McKinsey study. The figure comes from a report that cites barriers to successful digital transformation as “insufficiently high aspirations, a lack of engagement within the organisation, and insufficient investment in building capabilities across the organisation to sustain the change.”
Autodesk’s data, at least in part, reinforces the findings. Report’s authors note that there are a number of barriers preventing companies from investing in technology as much as they would like. They also admit that implementing new tools is “not enough to drive effective digital transformation.” Instead, they stress that new tools and solutions must be accompanied by process improvements and cultural transformation. Importantly, Autodesk’s data highlights the fact that cultural transformation needs to come from both employees and executives.
“There is still resistance to digital transformation from people who have been working for a long time,” Eiichiro Okano of the Obayashi Corporation commented in conjunction with the report.
Regardless of whether barriers to digital transformation hindered investment or implementation, the data overwhelmingly points to the fact that organisations that successfully overcome these obstacles unlock meaningful benefits. According to respondent’s from “digitally mature” companies, compared with digitally immature ones, 34% more experienced “above average” or “exceptional” performance; 20% more kept up “very well” with change in the industry; 26% more “agree” they are prepared for the future; and 19% more said they were “very effective” at leveraging data.
- Digital Strategy
- People & Culture
