A vast majority of businesses will increase their investments in digital technology over the coming year, and many expect IT modernisation to fuel future transformation efforts that lead to cost savings and greater profitability.

This is according to a new global survey conducted by The Economist Intelligence Unit (EIU) and commissioned by IT services firm DXC Technology.

The EIU surveyed 621 senior executives in companies across healthcare, manufacturing, retail and finance during September and October 2018, finding that 83 per cent expected their organisations to increase their digital investments in 2019. More than 40 per cent of respondents predicted that their organisations will increase their investments by 11 per cent or more.

When asked to cite the top barriers to transformation, more than one-third (35 per cent) of respondents flagged “cost or lack of funding”, second only to security concerns (40 per cent).

However, just over three quarters expected the cost savings from IT services modernisation to help fund their digital strategy. Within the next three years, companies intend to greatly ramp up their efforts, and more than half of respondents (58 per cent) expected every business unit to be digitally enabled in the next three years.

“Companies overwhelmingly recognise that digital innovation is now a requirement for them to compete and succeed,” said Dan Hushon, senior vice president and chief technology officer at DXC Technology. “The survey findings point to perhaps the most rapid, dramatic and sophisticated effort at reinvention that major businesses have attempted in many decades, and those surveyed are committed to investing to make digital happen.”

Survey respondents also linked digital transformation to profits. More than two-thirds (68 per cent) say the annual profitability of their organisations has increased over the past three years thanks to their organisations’ digital strategy, and 74 per cent say they expected it to rise over the next three years.

Three quarters of respondents said digital transformation would lead to greater agility, but a third said the lack of a tech-savvy workforce is a barrier to transformation. Meanwhile, 72 per cent of companies agreed that a change in culture is necessary to digitally transform any organisation.

“Our research indicates that digital strategy will continue to be a major area of investment - amounting to a dramatic effort at corporate reinvention - but getting it right will be a continuing challenge,” said Gilda Stahl, managing editor for thought leadership at the EIU. “Defining your digital strategy clearly, ensuring digital literacy in every relevant role and recruiting digital-savvy employees are all essential to guaranteeing that digital investment yields positive business outcomes.”

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