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How Building Flexibility and Resilience Through Technology Shapes Opportunity

Digital transformation continues to present possibility and opportunity, but challenges remain

04 May 2022

Digital Transformation

As organisations begin to emerge from a global pandemic, digital transformation remains at the forefront. In the face of global disruption, large numbers of companies struggled to survive. Many businesses could not sustain operations and failed. Some leading organisations, however, didn’t simply survive – they thrived off the disruption. After absorbing the initial blows of the pandemic, these companies focused on building resiliency and flexibility in their business. Their digital transformation timelines collapsed from months or years down to weeks or even days.

Leading organisations capitalise on flexible technology architectures to expand their competitive advantage amid the disruption. But the road to transformation is rarely a straight line. Two out of five organisations say digital transformation initiatives often fail to achieve the desired business outcomes. Leading companies aren’t allowing the notion of failure to hinder progress.

Bold Investment in The Face of Disruption

Digital technology investments drive growth and deliver the flexibility organisations need to sustain future profitability. 49% of organisations plan to increase their annual spend on digital investment in 2022, with 34% planning to budget £15mil or more per project planned for the year. In addition to higher returns, digital leaders expect a much faster return on their investment, allowing them to further widen the digital divide. 75% of respondents to our survey expect to see a return on investment within the next five years.

As digital transformation projects increase in scope and investment, clearly demonstrating ROI is imperative to secure funding and support for future initiatives. Digital transformation doesn’t happen overnight. Leading organisations don’t fixate on long, drawn-out initiatives. Instead, they start small. They identify potential quick wins that prove business value.

The Digital Agenda is Long and Varied

In 2022, organisations are mostly preoccupied with improving operational inefficiency. They also put emphasis on delivering exceptional customer experiences, upgrading legacy IT systems, and transforming business processes. After that, companies have a long and varied agenda. This reflects the urgent need to gain flexibility and resiliency via digital transformation strategies. 

Top digital transformation goals in the UK: 

  • Reduce operational inefficiency – 50% 
  • Improve customer experience and engagement – 46% 
  • Replace or upgrade legacy IT systems – 37% 
  • Transform existing business processes – 36% 
  • Introduce new products or services – 29% 
  • Increase/achieve innovation – 24% 
  • Bolster cybersecurity – 20% 
  • Increase speed to market of existing products or services – 17% 
  • Introduce new business models/revenue streams – 17% 
  • Improve employee experience – 10%

Navigating Digital Transformation 

Digital transformation creates new possibilities and opportunities for business. But it also produces new challenges and new means for competitors to take market share. Digital leaders have been able to capitalise on the opportunities and widen the digital gap. 

The acceleration of digital transformation projects magnified the threats and challenges companies face. Navigating complexity, change management complications, and gaps in technical talent are sited as the top three most pressing challenges for most organisations. Gaps in technical talent has emerged as a top challenge in meeting digital transformation goals in recent years, perhaps driven by the relentless competition to attract and retain talent. Talent and expertise are finite resources. Without the right teams and partners in place, transformation projects slow or even come to a standstill. Organisations will need an ecosystem of partnerships to tackle these demanding challenges and generate the flexibility they need to be successful. 

Other challenges sited by respondents to the survey include operating-model transformation complications, lack of executive-level support, too many competing tech priorities, security concerns and compliance constraints, economic uncertainty, gaps in managerial talent, and lack of internal alignment.

The essential element of success – people 

Nine out of 10 organisations don’t have the talent they need to succeed with digital transformation. In fact, only 11% of respondents surveyed are confident that current internal skills are sufficient to embark on digital transformation initiatives. The rapid evolution of technologies, business models and ways of working dramatically impact the cornerstone of any company – their people. When companies hit the fast forward button on transformation, weaknesses become abundantly clear.

The most critical skills and the largest skills gap

Many companies indicate the skills most critical for their workforce are also where they have the biggest skills gap. Companies face an urgent need to identify new talent pools, as well as reskill and upskill their existing workforce. The integration of AI, automation and collaboration tools are driving significant change in the types of skills employees need to succeed in their jobs. Overcoming these challenges will require creative talent strategies, so companies can acquire and cultivate the skills they need to build a future-ready workforce.

Fostering an inclusive and diverse workforce is one strategy many organisations are committing to in order to fill the skills gaps within their digital transformation initiatives. 

Inclusion & Diversity's Role in Digital Transformation 

Drive meaningful change with inclusive workplace practices 

In some ways, building an inclusion and diversity strategy is the easy part – it's in the tactical execution of these strategies where organisations struggle. Most respondents to our survey agreed that effectively fostering an inclusive work environment (78%), making inclusion and diversity a priority during the hiring process (66%) and effectively developing an inclusive and diverse leadership pipeline (54%) is central to their hiring strategy. 

However, only 6% of respondents were able to decisively claim that diversity, equity and inclusion is firmly ingrained in their organisations, and only a further 4% agreed that their organisation has a mature diversity, equity, and inclusion practice in place. Positively, 80% of respondents agreed that their organisations are on an inclusion and diversity journey – taking the necessary steps to embrace the ethos and plan for the future.

Hybrid by design 

Finally, a hybrid workforce is a powerful model that’s here to stay. 82% of respondents to our survey believe that 50% or more of their organisation's workforce will continue to work remotely in 2022. Organisations must be intentional about remote and in-person collaboration, leveraging technology that creates flexibility, agility and balance.

TEKsystems’ Tips to Digital Transformation Success

Step Back to Move Forward 

Focus on the customer: Ultimately, digital transformation is about exceptional user experiences. Map out your entire customer journey. It will provide a clear roadmap to help you build engaging customer experiences for your target audience. 

Make it a collective effort: Transformation can’t succeed in a silo. Business and IT teams must get on the same page, communicate, and create a shared vision before moving digital transformation projects forward. 

Start with the end in mind: Starting with a plan and building a roadmap will help you construct operational value streams and enablement runways. They will serve as the foundation for achieving true business and delivery agility.

Fuel Your Efforts with People and Partners 

Evaluate your partner ecosystem: Your technology partners must be capable of delivering solutions today and flexible enough to grow with you tomorrow. Ask yourself, “Do I have the right providers to truly transform my business?” 

Scale your investments: Companies spend a lot on digital transformation. Spend wisely. Technology is a key component, but you must invest in your people, processes, and customers. 

Mind unintentional bias: Evaluate your hiring process. Your systems could be perpetuating bias that already exists. Look at who is on your hiring panel and think about how to bring a more diverse perspective to the process.

Resolve to Boldly Face Change, Continually 

Consider change management: Organisational change management is a vital step toward digital transformation success. It’s critical to understand how employees will be impacted and clearly and consistently communicate these effects to help drive user adoption. 

Embrace disruption: Whether environmental, geopolitical, technological or a public health crisis, the next disruption is coming. Create flexibility and resiliency within your company, so you do more than weather the storm. You grow, innovate, and thrive through it. 

Realise it’s an evolution, not a revolution: Every digital transformation journey begins, but it never fully concludes. Digital leaders continuously adapt to a fluid market landscape, and changing customer behaviors, transforming their business for the future.

Read our global perspective on the State of Digital Transformation here

Research overview

TEKsystems conducted an online survey from November to December 2021 with nearly 600 technology and business decision-makers. Respondents included members of the C-suite, company executives, vice presidents, directors and managers who have final decision-making authority and/or influence on their organisation’s digital transformation efforts. The sample includes a balance of decision-makers in enterprise IT and line-of-business functions in Australia, Canada, China, India, the United Kingdom, and the United States, across a broad spectrum of industries. 

There was a total of 70 responses for the United Kingdom. 

Digital transformation refers to the process of using technology to create new business processes, culture, and customer experiences to meet changing business and market requirements.