90% of companies face significant obstacles with digital transformation

Nearly eight in 10 (79 percent) companies are in the process of digital transformation, but the vast majority, 90 percent, are facing significant obstacles to success.

digital transformation obstacles

The new AppDirect Digital Economy Report finds that the most common challenges include investing in technology that enables seamless commerce, faced by 55 percent of companies, and integrating with third-party applications and services, faced by 51 percent.

In order to overcome these challenges, companies are turning to digital platforms and ecosystems. In fact, the report finds that 86 percent of executives say platforms are the key differentiator for success, while 68 percent say that ecosystems are the only way to innovate quickly to meet customer demands. The report also reveals that companies with a digital leader are significantly more likely to be agile and be able to respond to market changes (77 percent, compared to 38 percent of those who do not have a digital leader).

“The digital economy is complex and the bar for success is high. Companies not only have to put digital at the center of every dimension of their organization, but every element must work together seamlessly,” said Dan Saks, President and Co-CEO of AppDirect. “This holistic approach, which we call Multi-Dimensional Commerce, is the clearest path to success, and our report reveals where companies struggle most and how they are overcoming these challenges.”

Attitudes toward digital transformation

  • Seven in 10 executives (69 percent) agree that only businesses that have digitally transformed will survive over the next five years, and 84 percent say that their customers are already demanding more digital products and services.
  • Seventy-nine percent of companies are in the process of digital transformation, and the majority of executives in the process of a digital transformation, 60 percent, report that their initiatives are at least halfway complete.
  • Seventy-seven percent of executives say that digital transformation is “very important” to their overall business strategy.

Digital transformation drivers

  • Growth is the number one driver of digital transformation, cited by 45 percent of executives who are in the process of or have plans for digital transformation, followed by staying competitive and operational efficiency, each cited by 38 percent of executives.
  • More than eight in 10 respondents (85 percent) report that their organizations support digital efforts.
  • In the C-suite, CTOs, CIOs, and CEOs are seen as the most supportive of digital transformation efforts.

Digital transformation challenges

  • The “build versus buy” decision is a top digital transformation challenge, faced by 34 percent of executives who are in the process of or have plans for digital transformation.
  • Company culture and the cost of upgrading legacy systems are also obstacles, cited by 32 percent and 31 percent of executives, respectively.
  • Forty-two percent of respondents say that scaling customer service is a challenge, while 39 percent say that building an ecosystem is an obstacle.