March 26, 2018
According to the 2018
CFO Insights on New Technologies
survey, the C-suite views an investment in digital transformation as crucial for a competitive advantage. Grant Thornton partnered with CFO Research and surveyed 304 CFOs and other senior financial leaders, from companies with revenues between $100 million and over $20 billion. Overall, more than three quarters of the executives surveyed agree that digital transformation is critical, 23% in the short-term and 56% in the long-term.
According to the research, more than two-thirds (69%) of the executive respondents plan to increase their investment in digital transformation in the coming year. Of these, four in ten respondents planned an increase of more than 10% in the next twelve months. Notably, while some organizations admitted playing catch-up with their competition, or matching their competition’s offerings, 41% of respondents indicated that their digital transformation investment efforts are directed at overtaking their competition through differentiation.
Furthermore, the research findings suggest that investment strategies for digital transformation so far have been influenced by the desire to improve operational performance and reduce costs, future investment strategies will zoom in on more strategic opportunities, such as improving customer experience, competitive differentiation, or new products/innovation.
In the short-term, the research uncovered that the future differentiation will certainly depend on creating an exceptional customer experience. The findings of the 2018 CFO Insights on New Technologies revealed a significant difference in executives’ top 10 investment priorities now versus in the future. When it comes to executives’ goals today, compared to those prioritized in the next two years, the top four goals shift (as shown in Figure 1 below). In the future, customer experience tops the ranking, and competitive differentiation enters the top four goals. This represents a shift in focus from internal, operational concerns to external brand perception and service and product offerings that at least match up to the competition.
Figure 1: Goals Determining Investment Strategy
Today
- Improved Operational Performance
- Reduced Costs
- Improved Customer Experience
- Better Performance Management
In Two Years
- Improved Customer Experience
- Improved Customer Experience
- Reduced Costs
- Improved Competitive Differentiation
In the next two years, growth will be dependent on customer experience. In addition, other goals related to competitive differentiation move up in the ranking, such as new product development and better innovation support, which, in two years’ time, both sneak up three positions from their current ranking.
These current and anticipated goals point to an existing tension in terms of the distribution of funds at the enterprise level. The tension exists between current needs for maintenance and system updates, in contrast to the desire to invest in new automation technologies.
The survey respondents agreed that their organizations’ top IT challenges were systems complexity, including systems integration across the enterprise, upkeep of legacy systems and IT talent. These foundational, urgent realities require significant investments, which possibly stall the pace of adoption of new technologies in other departments of the enterprise — e.g., the finance function — which could benefit from technology investments, but might be deprioritized in terms of budget, due to immediate technology needs.
Innovative technology will transform how we all do business. Please feel free to call us at 610.828.1900 if you have questions or concerns. You can contact David Gibbs, CPA, MBA, partner, at
[email protected]
or myself at
[email protected]
. We are always happy to help.
