Deloitte: UK falling behind rest of the world on realising value from new technology
UK business leaders understand the value of implementing new technology, but they don’t know how to measure it, according to new research from Deloitte.
In a new report, Measuring Value from Digital Transformation, 1,600 global business and technology leaders across six different industries were surveyed about their technology investment strategies. It found that three-quarters of UK respondents (74% vs 68% globally) believe that digital transformation - the adoption and implementation of new technologies - is the single most important investment they can make for their organisation.
Data analytics (90%), cloud data centres (73%), and artificial intelligence (AI) and machine learning (68%) are the technologies which generate the most value back to an organisation.
However, the research also revealed that UK organisations are finding it harder to generate value and return on investment from their technology investments compared to global peers. Across the 12 different technologies examined, there is on average an eight percentage-point gap in value created by UK organisations using technologies compared to the global average.
Mark Lillie, global technology strategy & transformation leader at Deloitte, commented: “Technology leaders are under pressure to deliver value and growth for their business. However, implementing and creating value from new technologies, whether that’s a cloud system or a generative AI tool, can face many potential pitfalls. While it is acknowledged that these digital capabilities are vital for an organisation’s long-term strategy, competitiveness and commercial success, their perceived complexity and costliness means that these projects often fall at the first hurdle.”
Despite having high ambitions, 30% of UK respondents said that their organisation lacked a digital transformation strategy “to a large extent”. Dependency on legacy systems (37%), difficulty securing funding (33%), insufficient data (31%) and inadequate cross-departmental communication or silos (31%) are perceived to be key barriers to creating value from digital transformation projects. Across every category, the barriers were more pronounced for UK respondents compared to the global average.
Mr Lillie added: “Many UK organisations are now bearing the burden of not updating their tech, with those relying on legacy systems and code struggling to connect old technology with new. At the same time, technology leaders are struggling to secure the funding and investment they need from executives and boards to enact the changes they need to make.
“Any technology investment needs to look at productivity not just as a cost-cutting measure but also as a way to unlock long-term growth opportunities. Through clear communication of easy-to-understand KPIs, business leaders will be better-equipped to make informed and impactful investment decisions and, crucially, maximise growth and productivity value.”
Deloitte’s report also revealed some of the key challenges facing leaders trying to monetise the digital technology that they have implemented. Nearly four-in-ten respondents (38%) cited disruption of the traditional business model as the biggest challenge to monetisation. This was followed by the inability to benchmark against peers to know how much to invest (29%) and protecting intellectual property and regulatory barriers (both 27%).
When it comes to value assessment, UK organisations tend to think more short-term than their global counterparts. More than three-quarters of UK respondents assess the value gained from digital transformation within just a year (77%), twelve percentage points higher than the global average (65%). At the same time, 19% of UK respondents assess the value gained within two to three years, compared to 31% globally.