Cos To Spend $100 Mn On Average In Digital Initiatives
Large enterprises - mostly those with over $500 million in annual revenues — will be spending on an average of $100 million of their income into digital technology initiatives in the next one year, says a recent report. However, only a handful of them have embarked on the journey. This would mean that the next one year is likely to witness a spate of well-funded crash programs in various digital platforms across enterprises.
These are the findings of a recent survey by Tata Consultancy Services (TCS) conducted on 820 executives from companies across the globe. Among those surveyed, 70 percent viewed digital initiatives as a key factor in their company’s success in the next five years. However, only eight percent said they had a digital strategy today while nearly a third said they will completely digital in the next 4-5 years.
Despite mixed opinion, enterprises across industries and regions are making huge investments in digital initiatives to the tune of $113 million on average this year, says the report. While Telecom companies are investing the maximum, around $189 million this year, they are closely followed by enterprises in the banking, insurance and financial services sector, that are spending $142 million on an average.
Era of digital re-imagination
Defining the transition as “digital re-imagination,” the report notes by 2017, digital leaders will spend the most of their digital budgets on big data analytics, followed by mobile, social media, cloud computing and artificial intelligence and robotics.
“The trait that the digital leaders have in common is that they are developing capabilities in all of these areas. Working with just one or two of these five forces isn’t enough,” said Dr. Satya Ramaswamy, VP and global head of TCS Digital Enterprise and also the co-author of the report.
Ramaswamy believes as companies across the world are waking up to new economic realities they need the ability to deeply understand customer preferences and market trends, along with the capacity to innovate, adapt and reinvent the business on a frequent basis.
He also said while going digital sounds great, organizations should be ready at a deeper level than simply taking in new technologies. The definition of “digital enterprise” is all over the map — from being active in social media to competing on analytics to running everything in the cloud.
Also, the ROI is often ambiguous. Compensation and incentive systems may run contrary to the aims of digital say in the case of sales teams that are already caught up in incentive plans, which may not have a place for lower-margin digital approaches. Executives may think running “on the cloud” means business as usual, with just an off-site server running applications.
Digital is a forward thinking step
In all its capacity, technology is but a tool, says the report noting that it takes forward-thinking, inspired, entrepreneurially minded management and leadership to move in a positive direction. According to the TCS’ survey notes small fraction of companies that are already making headway in digital, are doing so because they focus their efforts on improving a specific process, opportunity, or part of the business.
“The biggest mistake companies are making in digital adoption is attempting “to spread their efforts more thinly between many business objectives,” says the study.
It further says that digital crash programs can deliver results for businesses and offer clarity. Buying into millions’ of dollars worth of “digital” solutions just for the sake of going digital won’t get companies anything but will lead to frustrated employees and customers, says the TCS report.
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