Digital Vision meets Legacy Hurdle

When asked about the biggest barriers to digital transformation in 2019, nearly one-third of organizations surveyed (30 percent) cited insufficient budget and 22 percent cited the inability to experiment quickly. 'Legacy systems' still present the single biggest barrier at 41 percent of those surveyed. Lack of change management capabilities and relevant skills are also seen as major hurdles in 2019.

Those were among the findings of the Infosys Digital Radar, based on an online survey of more than 1,000 global C-level and other senior executives conducted in November 2018, as well as phone interviews with practitioners and subject matter experts.

The study found that when it comes to digital transformation, organizations can be grouped into three clusters based on their progress: visionaries, explorers, and watchers. The firm defines visionaries as organizations that understand the potential of digital to completely transform business; explorers as those that commit to digital programs driven by the need to enhance customer experience; and watchers as those that see digital through the prism of efficiency.

Infosys identified 22 key digital initiatives and surveyed where companies stood on implementing each one. Companies were then assigned a Digital Maturity Index score from 0 to 100 according to their progress on pursuing and implementing these 22 key initiatives.

The 22 digital initiative were also categorized under four big buckets: foundation initiatives - implemented to modernize legacy systems; mainstay initiatives - focused on core digital transformation elements such as automation and AI; customer initiatives - focused on improving the customer experience; and forefront initiatives - focused on harnessing cutting -edge technologies, such as augmented and virtual reality, drones and blockchain.

This research found that as companies advance along the digital transformation journey, they tend to focus on different buckets. Watchers concentrate on scaling up foundation initiatives. Explorers focus on a broader range of initiatives including mainstay and customer - yet are sometimes held back by a lack of progress in scaling up foundation initiatives. And visionaries bring many initiatives to scale alongside the foundation, mainstay and customer categories. Visionaries are also the only businesses making substantial progress on scaling up forefront initiatives.

The survey revealed significant differences in digital maturity by industry. The highest maturity levels were found in technology, manufacturing, telco and financial services sectors. While industries such as consumer goods, logistics and healthcare ranked near the bottom regarding their digital transformation progress. Compared to other industries, retail is in the middle of the pack, with many legacy retailers not having made much headway. Perhaps surprisingly, the automotive sector lags other sectors in terms of its digital maturity. While autonomous and connected vehicles grab headlines, much work is needed to modernize legacy systems and integrate the automotive ecosystem.

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