90% of companies undergoing digital transformation facing 'significant obstacles'

Customers want more digital products and services, but businesses struggle with culture change and legacy system costs, according to an AppDirect survey.

7 ways to accelerate digital transformation success CIOs and CEOs are increasingly leading digital transformation efforts, according to an Altimeter report.

Nearly 80% of companies are in the process of digital transformation—but of those, 90% are facing significant obstacles to success, according to a Monday survey from AppDirect.

The top digital transformation challenge cited by 34% of the 481 executives surveyed is the build versus buy debate—whether to use internal resources to create a tech solution, or to work with a third-party vendor to acquire it, the report found.

SEE: IT leader's guide to achieving digital transformation (Tech Pro Research)

Other top challenges cited by executives are company culture (32%)—specifically those that move too slowly or are too risk averse—along with the cost of upgrading legacy systems (31%) and lack of budget (31%), the survey found. A lack of understanding and knowledge (24%), lack of expertise or technology talent (23%), and a lack of digital transformation vision (20%) also have led companies to struggle.

Growth is the no. 1 driver of digital transformation, according to 45% of respondents who are in the process of or have plans for digital transformation, the survey found. Staying competitive (38%), operational efficiency (38%), and the increase in revenue (32%) are other top drivers of transformation projects.

Most organizations (85%) support digital transformation efforts, respondents said, with CTOs, CIOs, and CEOs being the most supportive members of the C-suite. This is in large part because the majority of executives see these efforts as paramount to future success: 69% of those surveyed agreed that only businesses that have digitally transformed will survive over the next five years, according to the survey. Another 84% said that their customers are already demanding more digital products and services.

For more tips on how to accelerate digital transformation at your company, check out this TechRepublic article.

The big takeaways for tech leaders:

  • 90% of companies undergoing digital transformation are facing significant obstacles to success. — AppDirect, 2019
  • Top challenges to digital transformation success are build versus buy decisions, company culture, and the cost of upgrading legacy systems. — AppDirect, 2019

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Image: iStockphoto/BrianAJackson

By Alison DeNisco Rayome

Alison DeNisco Rayome is a Senior Editor for TechRepublic. She covers CXO, cybersecurity, and the convergence of tech and the workplace.