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 Enterprises not achieving ROI from digital transformation initiatives

The majority of enterprise leaders are concerned about return-on-investment from digital transformation initiatives, according to a new report.

Digital.ai has released the Digital Transformation Progress Report, detailing the findings of a survey of over 600 enterprise IT, security, and business decision makers on the state of digital transformation in their business during the COVID-19 pandemic. 

According to the survey, respondents overwhelmingly agreed that visibility into planning processes and the alignment of software development and delivery processes to business objectives are critical to driving better business outcomes. 

However, more than half reported issues providing that visibility and alignment, calling in to question the long term success of today’s digital transformation initiatives, Digital.a says.

The research also revealed a wide range of issues relating to digital transformation, including concerns about ROI, security, and the ability to compete in today’s digital environment.

The overwhelming majority (99%) of leaders agreed that organisations need visibility into business planning processes to produce better outcomes, but only 62% said they can provide that visibility and 34% admitted they are doing poorly at providing visibility. 

Additionally, 94% of respondents said organisations need software development and delivery to be better linked with business objectives, but only 54% said their business, IT, and security teams are strategically aligned and working toward the same goals and objectives. 

What’s more, 78% of leaders said COVID-19 has further impacted the alignment between business and IT value streams in their organisations.

“Most of today’s Agile and DevOps tools are designed for the workgroup, making visibility and alignment fairly easy to achieve at the team level," says Derek Langone, head of strategic transformation at Digital.ai.

"However, scaling to the enterprise is far more complex, as organisations must break down silos and manage teams of teams that embrace different cultures, tools, and systems,” he says.

 “We’ve found that in large enterprises that succeed at true digital transformation, business and technology teams work collaboratively to define value and drive outcomes," Langone says.

"These companies typically organise themselves in terms of value streams, employ an open approach to sharing information, and leverage enterprise-grade solutions that offer full visibility and rich, predictive insights across the entire organisation.”

While 94% of respondents said they are familiar with the concept of value stream management, and 95% believe their organisation is definitely or probably practicing value stream management, only about half (53%) of the organisations said their business and software value streams are very aligned, and just 60% say their organisations are very customer centric.

Moreover, there was no clear consensus on what value stream management means to the enterprise.

Gartner predicts that “by 2023, 70% of organisations will use value stream management to improve flow in the DevOps pipeline, leading to faster delivery of customer value and the use of value stream delivery platforms to streamline application delivery will grow from 10% to 40%. 

Ninety eight percent of survey respondents reported they are likely to use a platform that connects software delivery process to business objectives and provides insights needed to make decisions that increase value delivered to customers, and 63% said they would be very likely to use such a platform.

Additional Findings

Although most leaders said digital transformation was going well at their organisation, the survey also found the majority have serious concerns about the state of their programs:

  •        91% said they need to get more out of their digital transformation initiatives,
  •        49% are not seeing the results they expected from their digital transformation initiatives,
  •        56% are worried about the return on their digital transformation investment,
  •        63% are worried about releasing security vulnerable products, and
  •        54% believe problems with digital transformation have hurt their company’s bottom line.

With regard to the COVID-19 pandemic, the majority of leaders said their organisations have responded well to the situation. However, when asked, more than half (55%) are concerned about their organisation’s ability to respond to change and their ability to compete in today’s digital environment (54%).