Organizations are pouring huge investments into digital technologies to transform their businesses. However, the costs place a significant burden on companies, according to a Tuesday Deloitte report.

The report surveyed more than 1,200 global executives and business leaders to determine how digital disruption is affecting the enterprise. The majority (71%) of respondents said they plan on undergoing cost reduction initiatives over the next year. Some 68% cited expected total cost reductions of 10% or more, the report found.

SEE: Internet of Things: Progress, risks, and opportunities (free PDF) (TechRepublic)

When assessing the largest external risks to companies, digital disruption shot to the top, with 61% of respondents citing it as one of the biggest risks–up from just 6% in 2017, the report said. Some 62% of respondents said cybersecurity was an even greater risk globally.

“In today’s highly dynamic and competitive landscape, digital disruption is changing how companies view every aspect of their business, including cost management practices,” Omar Aguilar , principal and global strategic cost transformation

Leader at Deloitte Consulting LLP, said in a press release. “Deloitte’s study shows that businesses are now recognizing they must save-to-transform, using investments in digital infrastructure to drive dramatic improvements in future performance, efficiency and market position.”

These digital risks are inspiring companies to use cost reduction as a way to fund digital transformations, the report found. Artificial intelligence (AI) and machine learning applications are predicted to more than double, from 25% to 63% in the coming years. This growth will also be reflected in automation and business intelligence, the report said.

Cloud remains one of the most widely implemented digital tech tools on the market, the report found. Nearly half (49%) of respondents expect cloud to remain popular because it’s able to strengthen data security, reduce costs, and boost productivity, the report added.

To learn more about some of the top risks for businesses in 2019, check out this TechRepublic article.