COVID-19 pandemic drives digital transformation: Study

Organizations are shifting their digital transformation programs into high gear and are on the path to accomplish in a few months what would normally have taken them years, according to Dell Technologies’ Digital Transformation Index (DT Index). The study indicates organizations are accelerating transformational technology programs during the global COVID-19 pandemic.

In one of the first global studies to measure business behavior as a result of the pandemic, Dell’s 2020 Index found that eight in 10 organizations have fast-tracked some digital transformation programs this year and 79% are re-inventing their business model.

The DT Index is a global benchmark indicating organizations’ status of digital transformation and their performance across the globe. The survey included 4,300 business leaders (C-suite to Director) from mid-size to enterprise companies across 18 countries.

A new digital transformation curve

Since the first DT Index in 2016 and the next in 2018, this year’s results track the first rise in the number of Digital Leaders (the most digitally mature organization) to 6%. Digital Adopters (the second most digitally mature group) has grown from 23% in 2018 to 39% in 2020 ? a 16-percentage point increase.

The DT Index also records a modest drop since 2018 in the number of Digital Laggards (the least digitally mature group) by 6-percentage points and a steep fall in the second to last group, Digital Followers, by 17-percentage points. These organizations are moving up, into the Digital Adopter and Digital Evaluator groups, which have expanded in tandem.

“We’ve been given a glimpse of the future, and the organizations that are accelerating their digital transformation now will be poised for success in the Data Era that is unfolding before our eyes”, says Michael Dell, Chairman and CEO, Dell Technologies.   

Barriers to transformation

The pandemic may have catalyzed digital transformation across the globe, but continuous transformation is challenging: 94% of are facing entrenched barriers to transformation. According to the 2020 DT Index, the following are the top-3 barriers to digital transformation success:

  1. Data privacy and cybersecurity concerns (up from 5th place in 2016)
  2. Lack of budget and resources (#1 in 2016, #2 in 2018)
  3. Unable to extract insights from data and/or information overload (a jump of eight places since 2016)

Responding in an uncertain world 

Prior to the pandemic, business investments were strongly focused on foundational technologies, rather than emerging technologies. The vast majority, 89%, recognize that as a result of disruption this year, they need a more agile/scalable IT infrastructure to allow of contingencies. The DT Index shows the top technology investments for the next one to three years:

  1. Cybersecurity
  2. Data management tools
  3. 5G infrastructure 
  4. Privacy software
  5. Multi-Cloud environment

And recognizing the importance of emerging technologies, 82% of respondents envision increased usage of Augmented Reality to learn how to do or fix things in an instant; 85% foresee organizations using Artificial Intelligence and data models to predict potential disruptions, and 78% predict distributed ledgers – such as Blockchain – will make the gig economy fairer (by cutting out the intermediary). Despite these findings, only 16% are planning to invest in Virtual/Augmented Reality, just 32% intend to invest in Artificial Intelligence and a mere 15% plan to invest distributed ledgers in the next one to three years.

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