Despite High Expectations for Digital Transformation Led by Cloud, Analytics, Robotic Process Automation, Cognitive & Mobile, IT & Other Business Services Areas See Low Capability to Execute

March 16, 2017
3 Min Read

New Key Issues Research from The Hackett Group Raises Questions About the Potential Success of Digital Transformation Efforts

MIAMI & LONDON, March 16, 2017 – A wide confidence gap exists between the high expectations for digital transformation’s business impact and the low perception of the business’s capability to execute digital transformation, according to newly-released Key Issues research from The Hackett Group, Inc. (NASDAQ: HCKT)

This confidence gap is even larger in IT than in most other areas covered in the study – finance, procurement, and HR. The low confidence has not slowed the momentum of growth in digital transformation, which is expected to grow dramatically in the next two to three years. But it does raise serious questions about how successful digital transformation efforts will be, and represents a call to action to IT to invest in the necessary tools and talent.

“IT isn’t alone in falling short when it comes to the ability to fully address digital transformation,” said The Hackett Group Chief Digital Officer & Cofounder Allan Frank. “The rest of the enterprise is also fairly unprepared. But IT’s situation is unique, as it should truly be providing a road map. Digital transformation requires a holistic view, and both vertical and horizontal integration. IT is in an excellent position to provide this view, and should be teaming with the other business services functions to elevate digital transformation capabilities.”

Digital transformation is defined as changing the way organization create value, innovate, deliver products and services, engage with stakeholders and execute work, through the pervasive use of technology, improving operational efficiency, agility and customer experiences.

While 80 percent of business leaders agree that digital transformation will fundamentally change their company’s operating model, less than 40 percent have a strategy or competencies needed to execute that transformation, The Hackett Group’s research found. All the business services functions in The Hackett Group’s 2017 Key Issues Study – IT, finance, procurement, and HR — said they expect to see digital transformation driving fundamental changes to operating models, industries, competitive landscapes and more. Yet only about a third of all study respondents said they believed their company has an enterprise-level digital transformation strategy, and only about 40 percent said their company has the necessary resources and competencies to execute digital transformation. IT showed one of the largest confidence gaps among the functions studied by The Hackett Group.

The study also examined current and future adoption rates in an array of transformative digital technology areas, including cloud-based applications and infrastructure, cognitive computing, robotic process automation, advanced analytics, and predictive cybersecurity. While planning and adoption rates in most of these areas was fairly low, it has doubled in the last year, and most companies were expecting to achieve limited or mainstream adoption in the next two to three years.

The Hackett Group’s research also found very high levels of exposure to a broad range of business risks and sharp projected increases in these same risks over the next two years. The top four areas of projected risk – cyber-security, intensified competition, disruptive innovation, and access to critical talent – are all related to structural transformation of the business, which in today’s world is inevitably digital in nature and driven by technology innovation. Cybersecurity surpassed competition to become the top risk for 2017.

“The confidence gap in digital transformation presents IT with both challenges and opportunities,” said Richard Pastore, senior director and IT research advisor. “IT must close the gap by transforming its own competencies and services, and positioning itself as a transformation guide and partner. Some of the most critical transformations that IT will be working on in 2017 include adopting rapid application development techniques and a variable-speed development model. IT will also be improving its customer-centric innovation capability, working backwards from end-customer needs to introduce innovative technology to the business. And IT plans to enable enterprise analytics by modernizing data platforms to manage ever-increasing data complexity.”

The Hackett Group’s 2017 IT Key Issues research, “Closing the Digital Transformation Confidence Gap in 2017,” is based on results gathered from executives from more than 180 large companies in the US and abroad, most with annual revenue of $1 billion or greater.


About The Hackett Group, Inc.

The Hackett Group (NASDAQ: HCKT) is an intellectual property-based strategic consultancy and leading enterprise benchmarking and best practices digital transformation firm to global companies, offering digital transformation including robotic process automation and enterprise cloud application implementation. Services include business transformation, enterprise analytics, working capital management and global business services. The Hackett Group also provides dedicated expertise in business strategy, operations, finance, human capital management, strategic sourcing, procurement and information technology, including its award-winning Oracle and SAP practices.

The Hackett Group has completed more than 17,850 benchmarking studies studies with major corporations and government agencies, including 93% of the Dow Jones Industrials, 90% of the Fortune 100, 80% of the DAX 30 and 57% of the FTSE 100. These studies drive its Best Practice Intelligence Center™ which includes the firm’s benchmarking metrics, best practices repository and best practice configuration guides and process flows, which enable The Hackett Group’s clients and partners to achieve world-class performance.