- Despite enterprise transformation ambitions, more than half of companies have found no improvements in financial performance driven by digital investments in the last two years according to a KPMG survey of 400 technology executives in the U.S.
- Roughly two-thirds of IT executives are expected to do more with smaller budgets in 2023, compared to 2022, according to the report. To achieve short-term ambitions, more than half of execs identify AI as the most important technology.
- Leaders say workplace and cultural issues block enterprise transformation, with collaboration rifts, a skills gap and a risk-averse culture as chief contributors to the problem.
In tech overhauls, buy-in represents two different types of commitments: a financial and a cultural one.
Before digital tools can hit the enterprise tech stack, the financial outlook needs to show how the purchase will return on the investment. When tools are live, users within the enterprise must be committed to making the most of the technology.
Failure to realize the financial upside of transformation investments is partly a function of timing, according to Atif Zaim, national managing principal at KPMG.
“We expect to see significant profitability and performance gains as many leading organizations enter into the later stages of digital transformations undertaken in recent years," said Zaim. "It is critical that CEOs not take those gains for granted."
Despite the lack of direct financial improvement for more than half of respondents, digital transformation investments had a positive impact in certain areas, according to the survey. More than half, or 57%, of U.S. IT leaders said the investments exceeded their expectations when it came to increasing employee productivity and raising employee satisfaction.
For CIOs looking for ways to convey the long-term value of IT investments to broader leadership, metrics are critical, according to Julian Hamood, president of cloud solutions provider Trusted Tech Team.
"In a lot of SaaS applications, you can actually display the time and money saved," said Hamood. "Which is extremely helpful when providing cost analysis to a director of IT, CTO, CFO, or CEO."
Organizations looking to maximize ROI from digital investments and thrive in the long term, should put in place strategies and structures to promote transformative innovation throughout the organization, Zaim said in an email.
"CIOs must take a holistic approach, and work to break down functional siloes that can hinder enterprise-wide transformation," Zaim said. "It is common for companies to prioritize digital transformation in certain functions over others, resulting in a capability and experience gap that can be noticeable to customers, stakeholders, and internally."