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State of

Digital
Transformation

Building a Framework for Digital Success

Explore Our Findings

Building Resilience Through Technology

As organizations continue to navigate a global pandemic, digital transformation strategy 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 organizations, however, didn’t simply survive—they thrived off of the disruption. After absorbing the initial blows of the pandemic, these companies focused on building resiliency and flexibility into their business. Their digital transformation timelines collapsed from months or years down to weeks or even days.

Leading organizations capitalize 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 organizations say digital transformation initiatives often fail to achieve the desired business outcomes. Leading companies aren’t allowing the notion of failure to hinder progress.

Digital leaders are accelerating their rate of technology investment and strategically applying technology to enable business transformation. In doing so, digital leaders broaden the gap between themselves and the digital laggards.

In our third annual State of Digital Transformation study, we pay special attention to how digital leaders architect and execute their digital strategy. We discovered several root characteristics that set digital leaders apart from digital laggards.

Build strategic alignment

DX Leaders 89%

vs.

DX Laggards 59%
Digital transformation is a core pillar of business strategy

Value the right voices

DX Leaders 88%

vs.

DX Laggards 55%
Planning stages of digital transformation initiatives include the right mix of IT and business stakeholders

Future-proof the workforce

DX Leaders 86%

vs.

DX Laggards 54%
Well-positioned to reskill/upskill the workforce to be productive using digital technologies

Activate inclusion and diversity strategies

DX Leaders 70%

vs.

DX Laggards 39%
Have mature diversity, equity and inclusion practices in place

Our research examines the characteristics of digital leaders to help companies make informed decisions, adapt strategies and accelerate business transformation.

Scope of Digital Transformation

Speed, Scale and Flexibility

The pandemic forced digital transformation upon businesses that weren’t necessarily ready for it. For years, companies have struggled with accumulating technical debt, stalled or ineffective digital transformation projects, and siloed mindsets and behaviors. The pandemic didn’t alleviate those challenges—if anything, it magnified them. Leading companies adapted their strategies and pivoted to not only survive but also thrive in an evolving digital economy. The majority share a common denominator: recognition of resiliency. They see the need for greater resiliency and flexibility in the enterprise. Positioning them to enable future growth and strengthen their foundation to endure the next disruption.

Key
Takeaway
 

What’s driving organizations to transform?

When asked to describe the nature of the organization’s digital transformation strategy, similar to last year’s research, organizations were evenly split. Approximately half focus on optimizing processes to gain efficiency and the other half focus on transforming the organization by adding new business models and revenue streams.

Optimization-Driven Transformation-Driven
87
%

of digital leaders agree that their organization’s ability to compete in the market is greatly dependent on the flexibility of their technology architecture.

Organizations that succeed in the digital economy must thoughtfully use technology to achieve specific business outcomes. Integrating platforms to orchestrate processes and gain flexibility is a crucial linchpin. There are other use cases, however, to unlock more value from your transformation.

Technology Benefits Achieved from DX

State of DX mark Embarking on a digital transformation journey. Read More →
"We’re transforming into a new era. All of our technology must be stacked appropriately. Communication, ownership and accountability are crucial as we strive to deliver on specific business outcomes."

The Digital Transformation Journey

In 2022, organizations continue to obsess about delivering exceptional customer experiences. After that, companies have a long and varied agenda. As in previous years, many companies are reducing inefficiencies and addressing legacy IT systems. They’re also aiming to transform business processes (not asked in previous years). This reflects the urgent need to gain flexibility and resiliency via digital transformation strategies.

Top DX Goals

The majority of organizations are past the early phases of their adoption journey and are either working on proof of concept or piloting limited rollouts.

Stage Rating

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, size of company, and geographic location.

Key
Takeaway

Be Bold and Act Now

Organizations have an ambitious agenda in 2022. There may not be enough resources to allocate to every priority. Business and technology leaders must clearly articulate the business outcomes and demonstrate the return on investment to sustain their agenda.

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 capitalize on the opportunities and widen the digital gap.

State of DX mark Seizing opportunities to accelerate digital business. Read More →

The acceleration of digital transformation projects magnified the threats and challenges companies face. Navigating complexity, siloed mindsets and competing tech priorities continue to be near the top of the list of challenges for most organizations. Interestingly, a challenge that historically hovered near the bottom shot up the list in 2022. Perhaps driven by the relentless competition to attract and retain talent, organizations identified gaps in technical talent as a major challenge to meeting their digital transformation goals. Talent and expertise are finite resources. Without the right teams and partners in place, transformation projects slow or even come to a standstill. Organizations will need an ecosystem of partnerships to tackle these demanding challenges and generate the flexibility they need to be successful.

Top DX Challenges

"Our inability to connect all our data sources is a major burden. We have pockets of good digital transformation, but we need to connect teams together and share information better if we hope to deliver real value."

Activate Digital Transformation Strategy

Investments in technology and business success are intrinsically linked. Technology is no longer a differentiator. It’s an essential element of your business strategy. But simply deploying technology, without a plan, is a recipe for disaster. Companies must determine the human-based outcomes, powered by technology, that will transform their business and defend their market position. Digital leaders have clearly defined KPIs to measure how well their technology investments drive growth, attract and retain customers, and sustain profitability.

State of DX mark Organizational mind shifts that enable digital transformation. Read More →
90
%

of digital leaders say they have realized positive business impacts from the digital projects deployed in response to the pandemic.

Bold Investment in the Face of Disruption

Digital technology investments drive growth and deliver the flexibility organizations need to sustain future profitability. Digital leaders that chose to aggressively invest in technology in response to the COVID-19 pandemic have realized a 12% higher return on their investments compared to digital laggards. In addition to higher returns, digital leaders are realizing a much faster return on their investment, allowing them to further widen the digital divide.

Digital Success is Nuanced

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 organizations don’t fixate on long, drawn-out initiatives. Instead, they start small. They identify potential quick wins that prove business value.

The Transformation Toolset

People, Process and Technology

People

The Essential Element of Success

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. Nine out of 10 organizations don’t currently have the talent they need to succeed with their digital transformation. 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 drive 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.

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, size of company and geographic location.

Drive meaningful change with inclusive workplace practices: In some ways, building an inclusion and diversity strategy is the easy part─it is in the tactical execution of these strategies where organizations struggle.

DX Leaders 70%

vs.

DX Laggards 39%
Mature diversity, equity and inclusion practices in place
DX Leaders 83%

vs.

DX Laggards 62%
Make diversity and inclusion a priority during the hiring process
DX Leaders 82%

vs.

DX Laggards 61%
Effectively foster an inclusive work environment
DX Leaders 75%

vs.

DX Laggards 54%
Effectively develop a diverse and inclusive leadership pipeline

Process

Orchestrating Meaningful Change

A digital transformation strategy requires a roadmap that allows for flexibility and provides a clear understanding of the desired business outcomes. Early planning phases that include the right mix of stakeholders from IT and the business are critical for success. Having the right stakeholders will help properly establish the business problem and clearly define the expected improvements in business performance. Taking the time to create a value framework will help break down the vision into smaller, more manageable action items. Unfortunately, many organizations undervalue the importance of this phase of the process. But there are steps organizations can start today to activate true business transformation.

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, size of company and geographic location.

Hybrid by design: A hybrid workforce is a powerful model that’s here to stay. Organizations must be intentional about remote and in-person collaboration, leveraging technology that creates flexibility, agility and balance.

Percentage of respondents who expect that 25% or less, around 50%, or 75% or more of the workforce would work remotely three or more days per week.

Technology

Accelerating Intelligent Transformation

Organizations face more technology decisions than ever before. From smart cloud modernization, to AI and machine learning, to digital experiences and data analytics, weaving together different technology platforms can seem overwhelming. There is no one-size-fits-all approach. Digital leaders focus on the outcomes that will drive growth and create flexibility for the business. They’re seizing the opportunity to use digital technology to advance their business strategy.

Stage

DX Leaders

DX Laggards

Stage 01

Researching or planning to pilot

Stage 02

Piloting

Stage 03

Adopted in one business unit

Stage 04

Adopted across multiple business units or enterprise-wide

Stage 05

Upgrading/refining

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

State of DX mark Clarity in the cloud. Read More →

Own the Change Ahead

A new world of opportunity is dawning. One where flexible platforms and technology architectures enable agility and activate business value. Digital leaders continually reimagine their business and create sustainable value for their customers, employees and shareholders. Companies ready to embrace new opportunities can apply the models and actions of digital leaders to activate their business transformation. And face any disruption with fortitude.

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

TEKsystems’ Tips to Digital Transformation Success

Step Back to Move Forward

Focus on the customer icon

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.

Collective effort icon

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.

End in mind icon

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 ecosystem icon

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 investments icon

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

Mind Bias Icon

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

Change management icon

Consider change management: Organizational 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 icon

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.

Realize evolution icon

Realize 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.