The expected ROI for Digital Transformation Projects is usually enough to gain a decision makers approval. So, it is good news that Digital Transformation Efforts have been yielding a positive ROI. Specifically, 68% of respondents are reporting positive ROI for digital transformation strategies.
Constellation Research surveyed respondents to identify:
- the major priorities of their digital transformation efforts today
- who is leading digital transformation, impediments to digital transformation
- challenges that particularly vex executives
- the state of implementation of emerging technologies
- the state of investment in maturing digital technologies
- and workforce issues and digital transformation’s impact on innovation in the enterprise
Below are some of the key takeaways from the study.
ROI for Digital Transformation Projects – Positive Returns
Have your digital transformation projects yielded provable positive ROI?
- 68% say Yes
- 23% are not sure
- 9% say No
ROI for Digital Transformation Projects – Goals
Collectively, the top five goals of respondents’ digital transformation are as follows: reaching and engaging customers more effectively, at 50%; building a competitive advantage in the current market, 46%; implementing new, data-driven business models, 36%; increasing revenue, 35%; and modernizing legacy IT systems and processes and reducing costs, 31%.
ROI for Digital Transformation Projects – CIOs Take the Reins
One-third of survey respondents indicated that the CIO leads their organization’s digital transformation strategies, with the CEO leading in 23% of organizations, the CDO in 20% and the CMO in 9%.
This marks a change from last year, when CEOs led the highest percentage of digital transformation efforts at 29%, while CIOs trailed at 19 percent.
ROI for Digital Transformation Projects – Digital Transformation Goals in 2018
What is the most important goal of your digital transformation strategy?
- Reach and engage with customers more effectively, 50%
- Build a competitive advantage in current market, 46%
- Implement new, data-driven business models, 36%
- Increase revenue, 35%
- Modernize legacy IT and reduce costs, 31%
- Improve agility, 23%
- Faster innovation cycles, 19%
- Employee experience, 18%
- Transparency, 12%
- Compliance, 10%
ROI for Digital Transformation Projects – Leadership of Digital Transformation Projects
Who leads your digital transformation strategy
- CIO, 33%
- CEO, 23%
- CDO, 20%
- CMO, 9%
- CTO, 9%
ROI for Digital Transformation Projects – Revenue Matters
Digging deeper into the data reveals a correlation between digital transformation leadership and company revenue
Among small businesses (revenue less than $10 million), CDOs and CEOs lead an equal share of digital transformation efforts, at 33% each. The CIO leads 0 percent of digital transformation efforts among small businesses surveyed.
Leadership of Digital Transformation Projects in Organizations with Less than $10 Million in Revenue
Organizations with revenue < $10 million, who leads your digital transformation strategy?
- CEO, 33%
- CDO, 23%
- CMO, 8%
- No One, 8%
In larger businesses ($10 million to $500 million in revenue), CIOs are leading 60 percent of digital transformation efforts; CEOs lead 17%. Among these organizations, too, CDOs guide 3% of such efforts.
Leadership of Digital Transformation Projects in Organizations with $10 – $500M in Revenue
Organizations with revenue $10 million – $500 million, Who leads your digital transformation strategy?
- CIO, 60%
- CEO, 17%
- CTO, 10%
- CDO, 3%
- CMO, 3%
However, among enterprises with revenue over $1 billion, CDOs stand as the leader of choice for digital transformation efforts. 32% of enterprises with revenue over $1 billion said the CDO leads their digital transformation efforts, with CIOs at 24% and CEOs at 12%.
Leadership Reveals Priorities
The goals of digital transformation strategies vary from organization to organization. The survey data reveals different leaders are selected to lead transformation efforts depending on the goal of the transformation. In the 33% of organizations whose digital transformation efforts are led by the CIO, prominent goals include modernizing IT systems, building a competitive advantage and reaching and engaging with customers more effectively.
Leadership of Digital Transformation Projects in Organizations with More than $1 Billion in Revenue
Organizations with revenue > $1 billion, Who leads your digital transformation strategy?
- CDO, 32%
- CIO, 24%
- CEO, 12%
- CTO, 12%
- CMO, 4%
ROI for Digital Transformation Projects – Priorities for CIO Led Digital Transformation
Top 5 priorities for CIO led digital transformation efforts
- Build a competitive advantage 38%
- Modernize legacy IT and reduce costs 38%
- Implement data-driven business models 33%
- Engage with customers more effectively 33%
- Improve agility 29%
Among the 23% of organizations in which the CEO leads digital transformation efforts, the most
important goal is reaching and engaging with customers more effectively.
ROI for Digital Transformation Projects – Priorities for CEO Led Digital Transformation
Top 5 priorities for CEO led digital transformation efforts
- Engage with customers more effectively 57%
- Build a competitive advantage 50%
- Increase revenue 43%
- Implement data-driven business models 43%
- Improve agility 29%
The 20 percent of digital transformation strategies led by the CDO focus on engaging in faster innovation cycles, implementing data-driven business models, and reaching and engaging with
The lesser prominence of the CDO in organizations with less than $1 billion in revenue may be attributable to some organizations not having a CDO position or having a CDO who reports to another
executive in the C-suite. However, as we predicted last year, more organizations have brought on CDOs to take responsibility for the digital strategy. Constellation expects this trend to persist. As
digital initiatives continue to integrate into the business, the CDO eventually will report to the CEO on matters pertaining to the implementation of new business models or the CIO on matters concerning the improvement of technology. Eventually, as organizations complete their digital transformation, the CDO role may be phased out.
ROI for Digital Transformation Projects – Priorities for CDO Led Digital Transformation
Top 6 priorities for CDO led digital transformation efforts
- Implement data-driven business models 50%
- Engage in faster innovation cycles 50%
- Engage with customers more effectively 43%
- Modernize legacy IT and reduce costs 43%
- Build a competitive advantage 36%
- Improve agility 36%
ROI for Digital Transformation Projects – Impediments to Digital Transformation
Indicate the factors impeding digital transformation
- Lack of talent to staff transformation projects 61%
- Internal resistance to change 58%
- Limited budget 37%
- IT infrastructure 32%
- Lack of executive support 20%
Additional Go to Market Resources From Four Quadrant