According to the “Transformation Study 2024”, organizational adjustments are the key driver of IT transformations worldwide. However, according to respondents in 15 countries, many of the IT projects are more complex and time-consuming than initially expected.
Die „Transformation Study 2024“ of the SAP consulting company NTT DATA Business Solutions with the IT service provider Natuvion is subtitled “What managers wish they had known earlier.”
It identifies the key drivers of digital transformation projects. It also examines the entire process of digital projects, from decision-making processes to preparation and implementation, as well as lessons learned and requirements for the future.
More than 1,200 CEOs, CIOs, IT decision-makers and other transformation managers from large and medium-sized companies with more than 250 employees from 15 countries were surveyed in January 2024. What they all have in common is that their companies have modernized their IT system landscape within the last two years.
Participants come from 15 countries: Germany, Austria, Switzerland, Denmark, Sweden, Finland, Norway, Great Britain and the USA; participating for the first time in 2024: Belgium, France, Spain, Italy, Turkey and Australia.
Pressure for technological adaptation is increasing worldwide
Many companies are under pressure. Technological progress and the pressure on the economy to adapt are putting them under pressure. Added to this are new consumer habits and global developments that are forcing companies to constantly adapt their IT systems.
The respondents cited organizational adjustments (restructuring) as the most common reason for an IT transformation (36 percent). The authors were surprised to find that sustainability was the main motive for transformation for only 15 percent of respondents.
Figure: Why was the transformation process started in your company?
In the automotive industry, which is currently undergoing massive change, particularly due to the switch to electromobility, restructuring tops the list of motives for transformation at 48 percent. The situation is similar in the booming life sciences sector. Here, organizational adjustments came in first place at 38 percent.
These industries are transforming their IT primarily for organizational reasons.
Immediately after the point “organizational adjustments”, the respondents chose “introduction of new technologies” such as artificial intelligence (AI) as the second most common transformation motive across all participating countries at 27 percent. When comparing the countries with each other, Switzerland leads the group of pioneers with 47 percent and the USA with 43 percent. German companies take third place here: 37 percent stated that they started their IT transformation in order to introduce modern technologies.
The Swiss are at the forefront with the motive of preparing for future technologies.
Growing need for transformation know-how
According to the respondents, the transformation projects are often more complex and time-consuming than initially expected. This is also reflected in the question of whether those responsible for their projects were able to stick to the schedule. Only 13 percent managed to do so. 16.5 percent of those surveyed managed to exceed the time limit by just ten percent. In contrast, 70 percent of the study participants stated that they exceeded the time limit by 20 percent or more.
Companies often underestimate the challenges of an IT transformation – above all the organization of communication during the process between IT and the departments and business areas (39 percent). Also noticeable is a lack of existing transformation knowledge in companies (33 percent) and the difficulty of a detailed inventory analysis of the existing IT landscape and data (29 percent).
Compared to the previous year, the number of those complaining about a lack of transformation know-how in their own company rose by five percent. “The study clearly shows that a lack of know-how and a shortage of skilled workers are the main factors slowing down the transformation of companies. However, innovative and efficient IT is crucial to remaining competitive,” explains Norbert Rotter, CEO of NTT DATA Business Solutions and EVP of NTT DATA, Inc. More than a third of all respondents consequently rate the option of engaging external consultants at an early stage and thus closing the existing skills gap as the second most important organizational measure in the successful implementation of their transformation project (34 percent). “Building skills” comes in first place with 46.2 percent.
Key findings of the “Transformation Study 2024” in times of upheaval.
More data protection and cloud applications
The integration of modern technologies such as AI is the primary reason for their IT transformation for around a quarter of those surveyed. However, if the group of people surveyed is restricted to representatives of top management, it becomes clear that “data protection” is rated as even more important than “AI”. 44 percent of board members and managing directors said that data protection was a particularly important driver of the transformation for them.
Transformation NOW! Back to the future: THE event for the SAP community on September 18 + 19, 2024 in Bonn
The trend to move applications to cloud platforms continues unabated: around 56 percent of companies say they are using more cloud services as part of the transformation. In all countries, greater flexibility and faster adaptation options are the main reasons for using the cloud (39 percent).
Patric Dahse, CEO of Natuvion Group, emphasizes the importance of data quality for transformation projects: “Good data has always been the basis and fuel for innovative processes, and in the age of AI its importance continues to grow. Only those who keep their data of appropriate quality, harmonized and centrally available will be able to make optimal use of the blessings of technical developments in the future.”
Despite all the difficulties and hurdles described, according to the authors of the study, most digital transformation projects can be managed well if those responsible are aware of the potential challenges, take the appropriate measures, plan well and prepare for them. The study is intended to help with exactly that: learning from others in order to then do things better. The next transformation study will be published in 2025.
Full study
Here is the Transformation Study 2024 from NTT DATA Business Solutions and Natuvion.
The study also shows which goals top international decision-makers wanted to achieve with their IT and SAP transformation projects last year – and which goals they achieved. It explains which challenges arose during the transformation – and what the companies would do differently today; what budget amounts were used – and how great the temporal variance was in the transformations.
These points from the “Transformation Study 2024” are also important:
- Everything is not so urgent? Is it possible with a small budget? How and why companies underestimate their IT transformation.
- Is everything now AI-driven? What role does artificial intelligence play in IT transformations?
- Greenfield, Brownfield, Selective Data Transition: Which migration methods work best worldwide.
- Not just an IT project: Which skills should not be missing from any transformation. Off to the cloud: Which advantages companies rely on – and which they don’t.
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