While the past two years have seen a major sprint by businesses towards digital transformation, that trend seems to be slowing down as practical limitations become more apparent, according to a recent survey.
The survey, from business management software provider Workday, found that 58% of business leaders say the frenetic pace of digital transformation that started with the pandemic is starting to lose steam, or they expect it to do so in the future. As a result, many are tempering their expectations for what it could hold: While in 2020 about 36% of companies expected digital transactions to account for 75% or more of their revenues within three years, this number had shrunk to 13% saying the same. This is only slightly higher than the 12% reported in 2019. They have also become more prudent when it comes to tech adoption, as the number of businesses saying they've adopted a "fail fast" experimental mentality went from 77% in 2020 to 53% in 2021.
What businesses are looking for now, said the report, is a steady but sustainable pace of change. It noted that only 42% of IT leaders in business feel confident they can adopt cloud technologies without legacy constraints, and 50% are struggling to keep pace with upgrades as part of legacy technology. A majority (59%) said it can take weeks or months to change an automated business practice.
As for why digital transformation has slowed, the most commonly cited reason is lack of workers with the requisite skills to lead a transformation, at 38%. This is followed by "organizational culture" at 35%, cybersecurity compliance and privacy at 33%, access to quality usable data at 31%, and issues with their technology infrastructure itself at 30%.
Business leaders are not happy about this state of affairs, as 55% of leaders say their organization's digital strategy is often or always outpaced by the demands of the business. Meanwhile, 51% of finance leaders in particular recognize that technology is key to accelerating planning, execution and analysis cycles, and 61% say their most pressing need is something to break down silos between finance, people and operational data.
The report said that to address these issues, businesses need to perform continuous recalibration, break down data silos and unite finance, people and operational data, and be more mindful of configuration options on current technologies.
"Digital transformation is no longer a choice — it's necessary to keep pace in today's changing world. Yet, as the study shows, there's an acceleration gap organizations need to address to help ensure their digital journeys keep pace with the growing and evolving demands of their business," said Pete Schlampp, chief strategy officer at Workday, in a statement. "We're encouraged that global finance, HR, and IT leaders are taking a more measured approach to their transformation strategies by leveraging technology that drives adaptability across their business."
The survey involved 1,150 senior business leaders in North America, Europe, and the Asia-Pacific region across 13 industries to understand the impact of digital transformation on three core business functions: finance, HR, and IT. The poll took place between August and November 2021. The company followed this poll up with in-depth interviews to give further clarity on the poll results.
This article was written by Chris Gaetano from Accounting Today and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to firstname.lastname@example.org.