TEKsystems 2023 State of Digital Transformation Report Reveals How Economic Uncertainty Impacts Decision-Making and the Journey Forward

Annual report uncovers a shift in organizational spending for digital transformation efforts in preparation for predicted economic headwinds

TEKsystems, a global provider of technology, business and talent solutions for more than 80% of the Fortune 500, released its fourth annual State of Digital Transformation report. This year’s report builds on the findings of the previous three by expanding the global view to provide new insights on how digital leaders accelerate digital business transformation .

Over the last three years, organizations heavily invested in their digital transformation journeys. Today, 72% of digital leaders (compared to 49% of digital laggards) have said they are satisfied with the progress of their digital transformation efforts. As the economic climate evolves, the report found that investments per initiative have decreased, and companies are shifting their strategies from enterprise-wide, long-term initiatives to short-term, tactical projects.

“This year’s report unveils findings about the ever-changing landscape of digital transformation and how companies have and continued to adjust their journeys,” says Mark Collins, president of TEKsystems. “The findings reveal that organizations are shifting their approaches in anticipation of the looming economic challenges, focusing more on modernizing and optimizing their businesses as opposed to transforming them.”

The report revealed five key strategies that set digital leaders apart from laggards in their transformation journeys:

• Build strategic alignment: 80% of leaders say digital transformation is a core pillar of business strategy.
• Value the right voices: 73% of leaders say the planning stages of their digital transformation initiatives include the right mix of IT and business stakeholders.
• Future-proof the workforce: 77% of digital leaders say they are well positioned to reskill/upskill their workforce to be productive using digital technologies.
• Map out the journey: 75% of leaders clearly define the desired business outcomes before starting any digital initiative.
• Optimize your spend: Digital laggards are two times more likely to cut digital spending in 2023 primarily due to economic factors related to inflation.

“Every day we see that successful digital transformation initiatives must include the buy-in of leadership and the strategic change management to better enable the people implementing new technology and processes,” says Ricardo Madan, senior vice president, head of TEKsystems Global Services. “Companies should build strategic alignment and ensure they have a clear roadmap to enroll and empower their workforce, keeping them engaged and driving business value despite economic uncertainty.”

Digital transformation journeys are changing

The report found that the nature of organizations’ drive for digital transformation continues to evolve. Up from 43% in 2022, 46% of organizations focus on optimizing their business through digital transformation as opposed to the 49% driven by transformation.

• The most common digital transformation goals continue to revolve around improving customer experience and engagement, transformation business processes and reducing operational inefficiency.
• Predicted economic uncertainty shifts how organizations view their transformation efforts and the goals they seek to achieve. Additional challenges to digital transformation include creating a culture of continuous learning, change management complications and gaps in technical talent.

Spending on big digital transformation initiatives is decreasing

The report indicates that organizations spending $10 million or more per digital initiative decreased from 34% in 2022 to 21% in 2023. The 2023 spend is under more scrutiny; as such, organizations are focused on smaller-scale projects that fall between $1 million and $4.9 million.

• Inflation and talent shortages weigh heavily on spending decisions, with 35% of companies noting IT cost increases due to inflation and 31% signaling staffing and talent shortages have the greatest impacts on IT spending in 2023.

Connecting a workforce to the value of digital transformation efforts remains vital to success

Securing buy-in from the entire organization remains one of the toughest challenges for digital laggards, with 53% struggling to embrace digital transformation across entire organizations. Expectations for top-line revenue growth are 25% higher for the C-suite compared to the expectations of the rest of the organization.

• Additionally, alignment remains a crucial piece to success. 41% of organizations’ digital transformation initiatives fail to achieve desired business outcomes when the workforce does not align to business goals.
• Two in five companies say it takes six months or more to fill mission-critical IT roles, highlighting the importance of patience when training a workforce.

The full report, complete with additional findings, expert recommendations and advice for achieving digital transformation, is available in an interactive, online experience on TEKsystems.com.

For media inquiries, contact Kara Moran.

About the Report

TEKsystems conducted a survey in November and December 2022 with 855 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 organization’s digital transformation efforts. The sample includes a balance of decision-makers in enterprise IT and line-of-business functions in the United States, Australia, Canada, China, India, Singapore, Belgium, France, Germany, Ireland, Netherlands and the United Kingdom across a broad spectrum of industries.

About TEKsystems and TEKsystems Global Services

We’re TEKsystems. We accelerate business transformation for our customers. We bring real-world expertise to solve complex technology, business and talent challenges—across the globe. We’re a team of 80,000 strong, working with over 6,000 customers, including 80% of the Fortune 500 across North America, Europe and Asia, who partner with us for our scale, full-stack capabilities and speed. We’re strategic thinkers, hands-on collaborators, helping customers capitalize on change. We’re building tomorrow by delivering business outcomes and driving positive impacts in our global communities. TEKsystems is an Allegis Group company. Learn more at TEKsystems.com.