December 5, 2022
New research published by Boston Consulting Group (BCG) claims that while 94 percent of companies have big aspirations to deliver substantial and rapid impact from digital transformation, and companies plan to increase investment in digital transformation in spite of global economic headwinds, the majority of these projects fail to achieve their objectives.
Titled, “Mind the Tech Gap,” the study is based on a survey of nearly 2,700 executives driving digital transformations in companies across thirteen countries and a wide range of industries. Despite a tightening global economy, the survey also finds that 60 percent of companies plan to increase their spending on digital transformation in 2023 vs. 2022 with business model transformation and sustainability as the top two areas for future investments.
“Many CEOs I speak with are grappling with the challenge of delivering their business strategy through major digital transformations. To tip the scales we are doubling down on BCG X, our nearly 3,000-person tech build & design unit. BCG X will turbocharge BCG’s deep industry and functional expertise to enable innovation at scale and deliver successful end-to-end digital transformations,” said Christoph Schweizer, BCG’s CEO.
The survey claims there are five key challenges in establishing and executing digital transformations:
- Making the right choices among disruptive technologies — top 3 cited being Advanced AI, Blockchain and IoT
- Reaching scale fast with new digital solutions
- Recruiting digital talent – top 3 hardest tech roles to fill are Experts in advanced tech, Software engineers and Data scientists
- Prioritizing investment and development
- Managing the cost and uncertainty of return on investment
Additionally, respondents also expressed concerns and pain points regarding the ecosystem of tech partners and vendors. These include cumbersome coordination across vendors (~85 percent); cookie-cutter solutions (~75 percent); or just lack of help in prioritizing steps of the transformation (~70 percent). As Sylvain Duranton, the newly appointed global leader of BCG X, claims: “What’s clear from our survey is that most companies are struggling to deliver bottom-line results for their digital transformations and are facing consistent pain points with their tech partners and vendors.”