2 Reasons Why Companies are Stuck in DX

Photo credit: iStockphoto/alphaspirit

Companies around the world are facing a so-called “digital ceiling” according to new research from Infosys Knowledge Institute (IKI).

To overcome this hurdle, the study suggested that businesses need to change their mindsets on achieving digital maturity. It also advocated that this change should begin with the employees.

The study, “Infosys Digital Radar 2020,” assessed the digital transformation efforts of companies on a Digital Maturity Index and found year-over-year progress in basic areas, such as digital initiatives to improve a company's efficiency.

It showed that companies are getting better at achieving moderate transformation success, with an 18% increase compared to last year.

However, many are struggling to move into the top “Visionary” tier in the study. The result is that the number of visionaries remains mostly unchanged despite companies reporting fewer barriers to digital transformation than last year.

Among countries, the digital ceiling was most dramatic in China. While 23% more companies reached digital maturity, the percentage in the Visionary category (8%) remained the same.

"This year's Digital Radar research revealed significant progress across transformation initiatives – however, traditional program models are not keeping up with the rapid pace of market change and companies face a distinct barrier in reaching top levels of digital maturity,” says Jeff Kavanaugh, vice president and global head at IKI.

The main reasons are a lack of talent or skills (34%) and a risk-averse corporate culture (35%).

The study argues that visionaries are those who had a strong focus on people, including both customers and employees.

“Faster, better, and cheaper technology alone will not provide the improvements enterprises need,” says Salil Parekh, chief executive and managing director at Infosys. “Our research has shown that companies which can keep pace with digital transformation are those that design digital initiatives to improve customer experiences and empower their employees, differentiating themselves and propelling their business to the most advanced levels of progress."

According to the study, 68% of companies stated operational efficiency and increased productivity as the primary transformation objective. But nearly half of the visionaries were particularly motivated to make improvements for their employees.

Another difference is how visionaries tend to drive digital initiatives in quick cycles, instead of a linear progression.

The study noted that 75% operated at scale in Agile and DevOps, compared with an overall average of 34% for the entire survey group.

"The most successful businesses in our survey have an employee focus and a circular transformation mindset, which enable top performers to kick off a virtuous cycle in the company. The result is a "living enterprise" that is constantly sensing, improving, and attuned to its customers and employees. This living enterprise is suited to serving a larger circle of stakeholders – employees, customers, suppliers, local communities, and the larger society – not just shareholders," adds Kavanaugh.

Photo credit: iStockphoto/alphaspirit