Most organizations that identify as pursuing digital transformation are reporting a positive return on investment, and those efforts are most often being led by CIOs, according to a new study from analyst firm Constellation Research Inc.
More than two-thirds of respondents said digital transformation projects yielded provable positive ROI, while 23 per cent weren’t sure and another nine per cent said the ROI was not positive. The Constellation Research 2018 Digital Transformation Survey was conducted in the second and third quarters of 2018 and included 81 respondents, mostly based in the U.S., that held purchasing authority for their organizations.
Digital transformation, a concept that became widely popularized in 2017 and is a buzzword among many IT vendors, can be broadly defined as the process of taking a business from a legacy model of conducting operations to one that is digital-first. According to the Constellation Research report, released Jan. 1, the top five goals of digital transformation among businesses are:
- Reaching and engaging customers more effectively (50 per cent)
- Creating a competitive advantage in the market (46 per cent)
- Implementing a new, data-driven business model (36 per cent)
- Increasing revenue (35 per cent)
- Modernizing legacy IT systems and processes while reducing costs (31 per cent)
When it comes to who is leading that digital transformation strategy, CIOs are mostly taking the reins, indicate one-third of respondents. The CEO follows with 23 per cent and a chief digital officer is next at 20 per cent. The responses mark a shift from last year’s Constellation Research Digital Transformation Survey, in which CEOs were most often leading the strategy and CIOs trailed at 19 per cent. (It’s worth noting the sample size isn’t large enough to be statistically significant, so this disparity could be explained just by different survey participants.)
The research does support ITWC’s own CanadianCIO Census 2018, which shows that CIOs are highly prioritizing collaborating with lines of business to improve customer service, retention, and acquisition (25 per cent) and identifying new opportunities for cost containment or cost reduction with more efficient delivery of IT services (20 per cent).
Overall, CIOs are taking a much greater stake in their organization’s decision-making process, with digital transformation being their main priority. Challenges that stand in the way of it include changing company culture – the patterns of behaviour that often prevent benefits of technological updates – and finding the right talent.
The CanadianCIO Census 2018 reflects participation from more than 100 top enterprise leaders and is sponsored by CA Technologies.