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State of

Digital
Transformation

Building a Framework for Digital Success
Explore our findings
Digital Transformation 2021 logo 
 

Fortitude in the Face of Disruption

The COVID-19 pandemic has impacted every facet of society. No person, company or institution is immune—organizations of all shapes and sizes were dealt serious blows to their business, employees and stakeholders. The lifeline has been and will continue to be technology. From deploying a completely remote workforce to engaging customers via contactless delivery, digital leaders better absorbed the initial shocks of the pandemic. They pivoted their strategy and accelerated their transformation. In fact, many digital leaders not only survived, they thrived—taking advantage of opportunities with new business models fueled by technology and capturing market share with innovative ways of working.

There is a direct connection between success during the crisis and the maturity of an organization's digital transformation before the pandemic. At the center of the acceleration is technology. However, digital leaders understand that technology is only part of the equation, the enabler for speed and agility. Successful digital transformation requires cultural shifts that facilitate new ways of thinking, working and problem-solving.

What makes the companies that are thriving different? Our 2021 State of Digital Transformation report explores how digital leaders have built a foundation for resiliency in the face of a global pandemic and ways they are accelerating digital transformation across the enterprise.

Attributes of Digital Leaders

COVID-19 unleashed unprecedented disruption. Maintaining business continuity has been critical for companies during the pandemic. Digital leaders were better equipped to stabilize the business, then quickly pivot and enable the business to take advantage of new market opportunities. Many attributes make digital leaders successful, but a few aspects of their digital transformation strategies give them an edge over the digital laggards.

Digital leaders:

  • Leverage the technologies that enable transformation for their business.
  • Accept and leverage differences to create growth and opportunities.
  • Take bold action and invest in digital solutions in the face of disruption.
Technologies
50%

Cloud computing

45%

Data and analytics

44%

Mobile internet technologies

 

Inclusion & Diversity
70%

Mature diversity, equity and inclusion practices in place

86%

Effectively foster an inclusive work environment

79%

Effectively develop a diverse and inclusive leadership pipeline

 

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Perspective on how to move your business forward.
DRAWING A DIFFERENCE IN DIGITAL TRANSFORMATION: LEADERS VS. LAGGARDS

We analyzed digital leaders versus digital laggards to uncover opportunities and achievement gaps so your company can navigate your own digital evolution. In this report, digital leaders are defined as companies with a mature digital transformation plan where digital processes and mindsets are ingrained in the DNA of the organization. Digital laggards are defined as companies with tentative plans and limited digital transformation initiatives and investments in place.

Our research explores what digital leaders are doing to transform their business and innovate while delivering on the outcomes that create value for their customers. We’ll explore how organizations are leveraging technology to achieve digital business and provide recommendations that will lead to digital transformation success.

SCOPE OF DIGITAL TRANSFORMATION

CUSTOMERS CO-CREATE THE VISION

An organization’s drive for digital transformation can take several forms. Some strategies focus on optimization and gaining efficiency, while other strategies focus on disruption and boosting business agility. There isn’t a right or wrong path, as long as the vision includes a customer-centric approach. Companies must align their transformation initiatives with the goals of the business and the value they aim to deliver to customers. When organizations “think big” and embrace the art of possible, they can develop a vision for transformation that disrupts their industry and also creates a value-focused path into their digital future.

KEY
TAKEAWAY

WHAT'S DRIVING ORGANIZATIONS TO TRANSFORM?

When asked to describe the nature of the organization’s digital transformation efforts, more organizations in 2021 define themselves as transformation-driven, focused on new technology adoption and creating new business models.

Optimization-Driven Transformation-Driven

 

Successful transformations start with the end goal—think about what you want to achieve. Clearly define the business outcome or use case, and then work backward to determine what systems or technologies are required.

 

Technology Benefits Achieved from DX
  • 40
    %
    Integration with other business systems / Interoperability with other deployed technology and software
  • 40
    %
    Analytics and business intelligence reporting
  • 37
    %
    Security
  • 36
    %
    Predictive Analytics
  • 34
    %
    Virtual workspaces / remote work capabilities
  • 33
    %
    Data privacy
  • 32
    %
    Scalability
  • 29
    %
    Edge-to-cloud connectivity
  • 25
    %
    Ability to customize
  • 25
    %
    Device management capabilities (e.g., remote management)
  • 24
    %
    Platform management capabilities
  • 46
    %
    Integration with other business systems / Interoperability with other deployed technology and software
  • 44
    %
    Analytics and business intelligence reporting
  • 35
    %
    Security
  • 40
    %
    Predictive Analytics
  • 26
    %
    Data privacy
  • 43
    %
    Scalability
  • 26
    %
    Edge-to-cloud connectivity
  • 32
    %
    Ability to customize
  • 25
    %
    Device management capabilities (e.g., remote management)
  • 28
    %
    Platform management capabilities

How has the pandemic impacted digital transformation? One-third of organizations identify the pandemic and resulting market pressures as the catalyst for their digital transformation efforts.

"We must shed the decades-old ‘We've always done it this way,’ attitude. We're rethinking everything about how we engage our customers digitally."

Organizations are keeping the customer at the center of their strategy in 2021. Improving customer experience and engagement continues to be the top goal fueling digital transformation. Organizations are also increasing their focus on speed-to-market and innovation in 2021. Goals will likely be driven by a need to deliver contactless experiences and processes in a world where face-to-face interactions are limited.

Top DX Goals
  • 52
    %
    Improve customer experience and engagement
  • 41
    %
    Reduce operational inefficiency
  • 37
    %
    Replace or upgrade legacy IT systems
  • 35
    %
    Increase speed to market of existing products or services
  • 34
    %
    Increase/achieve innovation
  • 30
    %
    Introduce new business models / revenue streams
  • 25
    %
    Introduce new products or services
  • 22
    %
    Bolster cybersecurity
  • 17
    %
    Improve talent retention/engagement
  • 72
    %
    Improve customer experience and engagement
  • 48
    %
    Reduce operational inefficiency
  • 47
    %
    Replace or upgrade legacy IT systems
  • 29
    %
    Increase speed to market of existing products or services
  • 28
    %
    Increase/achieve innovation
  • 27
    %
    Introduce new business models / revenue streams
  • 25
    %
    Introduce new products or services
  • 23
    %
    Bolster cybersecurity
  • 18
    %
    Improve talent retention/engagement
"The pandemic shattered the notion that technology deployments must be slow and bulky. Our new model is focused on quickly proving value, modifying and launching forward."

In terms of where they are in their adoption journey, most organizations are past the early phases and are either working on proof of concept or piloting limited rollouts.

Stage In Adoption Journey
DX Leaders
DX Laggards
Stage 01
Business case development
Stage 02
Assessing whether to build/innovate internally or use an outside vendor
Stage 03
Vendor evaluation
Stage 04
Proof of concept
Stage 05
Pilot of limited rollout
Stage 06
Full-scale rollout


Click
here
for an interactive look at this data, where you can drill down by the industry and size of company.

KEY
TAKEAWAY

BE BOLD AND ACT NOW.

Construct your comprehensive and customer-driven plan, focusing on future capabilities. Execute the tactical work—necessary for the end game—that will lead to quick wins while still allowing for flexibility along your journey.

NAVIGATING DIGITAL TRANSFORMATION CHALLENGES

The COVID-19 pandemic challenged organizations in ways they never imagined. Digital leaders were able to adapt their strategy to address new challenges. They quickly pivoted the enterprise and accelerated their digital journey.

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See how data can help you pivot and make informed business decisions.
SMART, STRATEGIC CHANGE

Successful digital transformation can prove to be elusive. Only about half of digital laggards believe their workforce is well-equipped to execute their digital transformation initiatives—a concerning statistic when faced with the extensive challenges posed by digital transformation. While not necessarily new, some challenges have taken on even greater weight as a result of the pandemic. As organizations seek to bridge the gaps between functions and share data across organizational silos, they’ll need nimble partners to inform decisions and execute their digital vision.

TOP DX CHALLENGES
  • 31
    %
    Complexity of current environment / Siloed mindset and behaviors
  • 26
    %
    Security concerns and compliance constraints
  • 23
    %
    Too many competing tech priorities
  • 23
    %
    Economic uncertainty affecting budgets*
  • 22
    %
    Change management and implementation complications
  • 21
    %
    High or unforeseen costs associated with digital transformation
  • 19
    %
    Operating-model transformation complications (current business processes are too rigid)
  • 16
    %
    Lack of internal alignment (digital vs. traditional business)
  • 16
    %
    Lack of senior-level support
  • 13
    %
    Lack of dedicated funding
*Not asked in 2020 survey
  • 39
    %
    Complexity of current environment / Siloed mindset and behaviors
  • 22
    %
    Security concerns and compliance constraints
  • 32
    %
    Too many competing tech priorities
  • 26
    %
    Change management and implementation complications
  • 20
    %
    High or unforeseen costs associated with digital transformation
  • 23
    %
    Operating-model transformation complications (current business processes are too rigid)
  • 19
    %
    Lack of internal alignment (digital vs. traditional business)
  • 18
    %
    Lack of senior-level support
  • 18
    %
    Lack of dedicated funding
ALIGNING VISION, CULTURE AND STRUCTURE

AI, cloud, edge computing or blockchain—the technologies behind digital transformation efforts typically get the headlines. Yet, digital leaders know that technologies are just enablers—the vehicles for moving the organization forward. The adoption strategy around these technologies is most critical, particularly around two inflection points: people and culture. The DNA of the organization. Shifting mindsets and creating new ways of working are what will ultimately define successful and sustainable digital transformation.

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See how a shift in mindsets can spark purposeful change.
DELIVERING VALUE AT SCALE

Digital leaders are leveraging technology to accelerate their competitive advantage in the marketplace. They’re investing more dollars per digital initiative and expect a bigger return on their investment. Digital laggards tend to have a greater disconnect between the C-suite and the rest of the organization regarding how much digital transformation projects will impact top-line revenue growth.

 

 

Digital Success is Nuanced

The digital transformation journey is less about technology and more about people. Organizations are using technology at scale to enable innovation, automate processes and deliver insights that fuel growth. Digital leaders are transforming their organization to thrive in the digital economy. But what are they doing differently?

THE TRANSFORMATION TOOLSET

PEOPLE, PROCESS AND TECHNOLOGY

PEOPLE

The Essential Element of Success

True transformation requires employees to embrace change and adopt an all-inclusive shift in mindset and ways of working that leverage technologies like cloud, data analytics and AI. The cultural and behavioral changes required to be successful cannot be overlooked. Digital leaders are successful by establishing new ways of working and collaborating, deploying training and development programs focused on nurturing new behaviors, and perhaps most importantly, insisting that tools and technology adoption is not an option.

ACTIONS FOR PEOPLE
  • 42
    %
    Establish new ways of working/collaborating with internal and external partners
  • 33
    %
    Offer training and development programs focused on new behaviors/mindsets
  • 33
    %
    Drive adoption of new tools and technologies*
  • 32
    %
    Focus on retaining, engaging and developing existing employees versus recruiting new employees
  • 29
    %
    Quantify the gap between current and needed skills to deliver digital products/services
  • 29
    %
    Train employees with digital skills across the organization
  • 28
    %
    Identify skills required to deliver digital products and/or services in organization’s portfolio
  • 22
    %
    Include new behaviors in formal performance management systems
*Not included in 2020 survey
  • 49
    %
    Establish new ways of working/collaborating with internal and external partners
  • 41
    %
    Offer training and development programs focused on new behaviors/mindsets
  • 34
    %
    Focus on retaining, engaging and developing existing employees versus recruiting new employees
  • 42
    %
    Quantify the gap between current and needed skills to deliver digital products/services
  • 37
    %
    Train employees with digital skills across the organization
  • 41
    %
    Identify skills required to deliver digital products and/or services in organization’s portfolio
  • 26
    %
    Include new behaviors in formal performance management systems


Stage Rating
DX Leaders
DX Laggards
Stage 01
Very Poor
Stage 02
Below Average
Stage 03
Average
Stage 04
Above Average
Stage 05
Excellent

*not asked in 2020 survey

Click
here
for an interactive look at this data, where you can drill down by the industry and size of company.


PROCESS

Orchestrating Meaningful Change

Digital transformation requires extensive changes and modifications to business and organizational processes and activities. Delivering value by fusing new digital technology with existing systems is no easy feat. Organizations can struggle when they narrow their approach and focus on a specific redesign or automation of existing processes. Digital leaders take an all-inclusive, holistic approach and think through the broader implications. They consider how process changes will impact workflows, customer interactions and partner ecosystems. They adjust and adapt the right tools and applications so they can realize their desired business outcomes effectively.

Actions for Process

Stage Rating
DX Leaders
DX Laggards
Stage 01
Very Poor
Stage 02
Below Average
Stage 03
Average
Stage 04
Above Average
Stage 05
Excellent

Click here for an interactive look at this data, where you can drill down by the industry and size of company.


TECHNOLOGY

Accelerating Intelligent Transformation

Technology adoption can create clear competitive advantage. But adoption is only part of the equation. Digital leaders accelerate their digital transformation journey with a clear vision and framework, where technology plays the role of enabler. Digital leaders identify the business problem they wish to solve and determine the desired outcome. They clearly define success metrics, establish a roadmap with key milestones, and finally focus on continuous improvement—making adjustments, and capturing feedback to deliver results.

Stage Rating
DX Leaders
DX Laggards
Stage 01
Not planning or evaluating for adoption
Stage 02
Evaluating or planning to pilot
Stage 03
Piloting
Stage 04
Adopted in one business unit
Stage 05
Adopted across multiple business units or enterprise-wide

Click here for an interactive look at this data, where you can drill down by the industry and size of company.

4
X
Digital leaders are four times more likely to be driving projects that enable new business models.
Reimagining a Digital Workforce in a New Paradigm

Last year we shared “how work gets done, who gets it done and where might be the biggest challenge organizations face in the new decade.” That statement seems almost quaint in a world where the pandemic forced organizations to shift to a near-total remote workforce. Digital laggards should heed the warning from digital leaders, who are keenly aware of the talent gaps made evident during large-scale transformation projects. Developing a digital workforce that is well-aligned to digital transformation initiatives will not happen overnight. It will require a multipronged approach. A strong inclusion and diversity strategy, coding boot camps, higher education partnerships and other training and development programs can alleviate some pain, but they’re only part of the solution.

Remote work is no longer a stopgap—it’s our new reality. While there are many positive advantages of remote work, organizations must consider the long-term effects on their workforce. How does it impact employee development? How do we retain our culture in a virtual world? How does remote work impact employees’ mental health?

 

Long-Term Challenges of Remote Work
  • 49
    %
    Maintaining team culture
  • 45
    %
    Networking or connecting with others
  • 45
    %
    Building relationships
  • 43
    %
    Balancing personal responsibilities with work
  • 42
    %
    Monitoring workload/progress/productivity
  • 40
    %
    Managing miscommunications/misunderstandings
  • 38
    %
    Dealing with technology or technical issues
  • 33
    %
    Securing high-quality work
  • 31
    %
    Developing trust
  • 30
    %
    Onboarding new employees
  • 28
    %
    Ensuring active participation by all
  • 28
    %
    Receiving appropriate manager support
  • 27
    %
    Retaining talent long term
  • 26
    %
    Trusting my direct reports
  • 25
    %
    Aligning on priorities
  • 25
    %
    Obtaining necessary training or development
  • 25
    %
    Understanding roles/responsibilities
  • 24
    %
    Receiving recognition for work
  • 24
    %
    Sharing feedback
  • 24
    %
    Having unclear goals or expectations
  • 21
    %
    Meeting deadlines
  • 20
    %
    Coming to agreement on decisions
  • 18
    %
    Gaining access to career growth opportunities

 

OWN THE CHANGE AHEAD

The COVID-19 pandemic disrupted our professional and personal lives in ways we never imagined. The ripple effects continue to reshape our world. The acceleration of digital transformation has been critical for many organizations to survive and even thrive in the new digital economy. Digital leaders are taking bold action to capitalize on opportunity and capture market share. Take ownership of your opportunity and define the vision for your organization's digital future.

No one should go at it alone. Engage a practiced expert outside of your organization to help you navigate your digital transformation journey.

TEKSYSTEMS’ TIPS TO DIGITAL TRANSFORMATION SUCCESS

  1. 01
    Make your customer the center of your digital transformation vision.
  2. 02
    Mind the gaps. Technology deployed during the pandemic may not be compliant with privacy and security policies or may not be integrated with other systems.
  3. 03
    Secure consensus and conviction among senior leaders regarding digital transformation goals. Utilize that alignment to break down organizational silos.
  4. 04
    Cultivate a culture that embraces change and agility. Identifying the right metrics and making data-driven decisions are critical to digital transformation success.
  5. 05
    Accept and leverage differences to create growth and opportunities. Build an inclusive environment that allows your employees and your company to flourish and succeed.
  6. 06
    Identify the skills and expertise required to execute digital transformation efforts and determine how workforce models should be aligned to digital business.
  7. 07
    Implement the right technologies that will achieve the desired outcomes and think about how they can be scaled across the enterprise.
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Learn how TEKsystems can help you with your digital transformation.
ABOUT THE RESEARCH
TEKsystems conducted an online survey from November to December 2020 with more than 900 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 across a broad spectrum of industries.
ABOUT TEKSYSTEMS
We’re partners in transformation. We help clients activate ideas and solutions to take advantage of a new world of opportunity. We are a team of 80,000 strong, working with over 6,000 clients, including 80% of the Fortune 500, across North America, Europe and Asia. As an industry leader in Full-Stack Technology Services, Talent Services and real-world application, we work with progressive leaders to drive change. That’s the power of true partnership. TEKsystems is an Allegis Group company.
© 2021 TEKsystems, Inc. ALL RIGHTS RESERVED.

© 2021 TEKsystems Global Services, LLC ALL RIGHTS RESERVED.