In a sign of digital transformation maturity, the DII reveals that more companies are moving from the initial stage of “building” digital capabilities to “running” or scaling technology solutions and are beginning to see benefits. In 2022, 31% of digital spending is being dedicated to “building” capabilities, while 69% of spending has shifted to “running,” in comparison to 36% and 64%, respectively, in 2020. This suggests that companies are pivoting from core internal operational efficiencies to new digital products and services that enable them to get closer to their customers and generate revenue.
Another indication of companies’ digital journey progression can be seen in the scaling of existing technology investments. For example, many companies have been building data platforms through investments in cloud and IoT. The number of companies reporting that they are now realizing full benefits of their investments in cloud, IoT and AI increased 54% in 2022 compared to 2020. This means they have moved from a proof-of-concept and build phase for key digital technologies to a launch phase.
Overall, companies are setting the foundational elements of digital transformation while moving toward full benefit realization.
Strategy is critical to securing funding for digital projects
A clear strategy, business case and proven agile capabilities are prerequisites to secure the right level of funding. The survey indicates that more companies are connecting their digital strategies with successful implementation, e.g., culture, agility, clear accountabilities, measurement and execution pathways. But many companies still show room for improvement when it comes to defining an actual digital strategy with clear implementation plans and executive accountabilities.
Only 16% of respondents strongly agree that they have a clearly defined strategy for digital — an essential factor in the success of digital investments. However, the numbers do suggest progress compared to the last survey (see Figure 2).