Ageing technology is holding European businesses back from realizing the true benefits of digital transformation, according to a new study conducted by leading independent research firm Pierre Audoin Consultants (PAC) and published today by Fujitsu.
- In 57 percent of businesses surveyed, technology is struggling to keep up with the demands of digitalization
- The next three years will see a doubling of cloud implementations while robotic process automation and multiple Oracle and SAP applications will be actively deployed in 2017
- Few businesses have yet to take advantage of fully integrated productivity and collaboration tools
The survey ¹
, commissioned by Fujitsu to identify trends in business application services across several European countries, focused on key technology challenges that businesses are facing as they undertake digital transformations: future trends and strategies in terms of investing in SAP and Oracle software, how to transform legacy technology infrastructure and how to optimize productivity.
The high level of unpreparedness identified is underlined by the fact that while digital transformation presents many opportunities for businesses, it has not yet become the highest priority on the business agenda.
Fujitsu and PAC found that just over 10 percent of enterprises regard themselves as leaders in digital transformation and only 17 percent consider digital to be a matter of life and death for their businesses. A further 42 percent believe that although it will have an impact, other challenges such as economic concerns are taking precedence.
Ravi Krishnamoorthi, SVP & Head of Business Consulting, Digital & Application Services at Fujitsu EMEIA, comments: “It is surprising to see how few businesses are currently fully reaping the benefits of digital transformation, but encouraging to learn that the next 12 to 36 months are going to see a great deal of progress. We expect enterprises increasingly to move workloads and applications to the cloud and to take significant steps to improve not only their business agility but also the effectiveness of their IT budgets.
In the meantime, many organizations will try to struggle on by running critical processes on software developed decades ago, which is starting to crack up under the pressure.”
Nick Mayes, Research Director at PAC, adds: “The challenge facing most large organizations is that they were not designed for the digital ag
e. Many have made great strides, but they continue to face competition from new market entrants that are digital natives. To compete effectively, enterprises are overhauling their technology infrastructure, from the back end to enterprise applications and productivity tools, but they are faced with overwhelming choice and a great deal of confusing change among vendors’ portfolios. And it’s not just about deploying the right infrastructure to meet a business’ digital needs; many enterprises are starting to find that unless employees are on board, even the best-thought-out strategies will fail.”
Technology and cultural issues top the list of factors holding digital transformation back – primarily enterprises’ aging technology and infrastructure, the difficulty of integrating digital into legacy systems and the challenges associated with driving cultural change within their own IT organizations. According to respondents, legacy applications in particular are considered to be a burden, with the negative effect they have on a business’ agility the leading concern, followed by their drain on the technology budget that could be put to better use supporting innovation.
However, the survey did confirm significant change to come over the next three years. Currently, only 20 percent of respondents have migrated more than half their applications to cloud-based delivery; however, this number is likely to more than double in the next 36 months. Active implementation of robotic process automation is likely to increase in 2017, deployed to heighten the reliability, speed and focus of external and internal processes.
My point of view: Let’s us not forget that one can speak about Europe. There are immense differences between the regions. For me the cultural issue and the aging workforce is the most blocking factor for transformation.