Introduction: On the heels of a year defined by shifting priorities and in the face of looming economic uncertainty, the name of the game in 2023 is optimization.
Our annual Insight-commissioned Foundry survey revealed that organizations are recognizing immense opportunity to advance digital transformation in the name of innovation. This is being done through improving, expanding and building on the solutions they have in place.
In fact, the #1 technology initiative for the next 12 months is optimizing existing IT infrastructures through better monitoring and management, cited by half of all respondents.1 This is also the initiative expected to drive the most impact for innovation and revenue generation.2
Continue reading to discover top challenges on the digital transformation journey and how leaders intend to move forward with optimization in pursuit of business innovation.
About the survey
- Total respondents: 400
- Respondent profile: Senior decision-makers employed in IT, security and management
- Median company size: 6,250 employees
- Field dates: November 14, 2022 — December 1, 2022
- Geography: U.S.
What does it take to thrive?
The most pressing question for leaders right now is “What does it take to thrive?” In this unique era of transformation, technology as a business agenda is front and center. This means:
- Expectations have shifted to better accommodate the people behind the processes.
- Mobile, agile, data-driven solutions are the new gold standard.
- Organizations need transformation with minimal risk.
All of this is influencing how companies are deciding to move forward. The result is that optimization is taking priority, and it’s focused in three key technology areas: data and application initiatives, platform performance and security integrations.
All of this is influencing how companies are deciding to move forward. The result is that optimization is taking priority, and it’s focused in three key technology areas: data and application initiatives, platform performance and security integrations.
Data and application initiatives
- No. 1: Optimizing data and analytics capabilities (51%)
- No. 5: Integrating insights from edge devices into data analysis (36%)
Platform performance
- No. 2: increasing cloud adoption via multicloud and hybrid cloud strategy (49%)
- No. 3: Modernizing legacy infrastructure and networking technology (39%)
Security integrations
- No. 4: Mitigating risk with stronger cybersecurity programs (38%)3
The data shows: Transformation in these core areas will be the key to unlocking meaningful business innovation in the near future.
Optimizing data and applications
Data tops this year’s priority list, having become more crucial to business success and more challenging to handle. Key players know data should be delivering business value, but half say theirs isn’t delivering the value it could be,4 and 39% say challenges with governance is the main reason why.5
Challenges in the data sphere
- 72% report data volumes are growing faster than their ability to manage them.
- 62% agree departments are hesitant to break down silos and share data.
- 50% agree their data is not being utilized to its full potential.
Source: Foundry6
The top three barriers to achieving business value from data
- 39% — Data governance (e.g., managing data availability, integrity & security based on internal policies)
- 35% — Integrating data repositories across departments or functional areas
- 30% — Manual & time-consuming processes to import, clean & prep data
Source: Foundry7
Delivering results with data
More efficient, impactful data use is a primary priority for organizations as successful market leaders implement analytics, Artificial Intelligence (AI) and other advanced data use cases for improved operations and experiences.
Moving toward that goal will require implementing new governance strategies to optimize the data and infrastructures already in place.
Data-driven digital transformation objectives
- 64% — Improve data management (e.g., security, data quality, accessibility) with implementation of a governance program
- 45% — Reduce costs and/or improve efficiency through automation
- 40% — Improve employee productivity & morale
- 40% — Enhance customer experiences & relationships
- 39% — Leverage data to maintain or drive a competitive advantage
- 38% — Improve customer acquisition & retention
- 35% — Reduce time to market for new products & services
Source: Foundry8
Doing more with AI
AI is gaining traction as a means to drive value from business data — the majority of respondents report using AI for this reason:
- 85% indicate their organization is using AI to drive business insights and/or efficiencies.
- 36% have optimized their use of AI organization wide.
- 23% have adopted a strategy but have yet to mature processes.
Source: Foundry9
What about application modernization?
Applications are a crucial element in the digital transformation journey. Legacy apps lead to poor user experiences, performance issues, management challenges and more, making application modernization a must on the path to innovation.
- 87% agree their organization needs to modernize critical applications for success.10
- 60% report efficiency is the top objective of application modernization.11
- 53% cite creating a plan for application modernization rationalization as their primary application modernization challenges.12
Optimizing platform performance
Modern platforms follow data as a priority. Organizations are planning to increase cloud adoption (most notably in the form of multicloud) and to modernize legacy infrastructure. Based on our research, we believe this expansion and modernization is tied to the need for more advanced data and analytics capabilities.
Platform challenges
The most challenging aspect of digital transformation is technology (47%).13
The top technology challenges hindering digital transformation are:
- 39% — Complexity of IT infrastructure
- 33% — Integration of legacy systems with new applications14
Top cloud challenges
More than half (54%) of data at respondents’ organizations, on average, resides in a public or hybrid cloud.15 And as data volumes continue to grow, multicloud has become the status quo, with nearly all (91%) organizations relying on multiple public cloud providers.16
But despite embracing multicloud and hybrid cloud strategies, many organizations still struggle with issues like integration, security and performance.
Primary challenges with respect to public and/or hybrid cloud deployment
- 38% — Integrating cloud resources with on-premises systems
- 38% — Securing/protecting cloud data & resources
- 38% — Monitoring & managing cloud performance & reliability
Source: Foundry17
Primary challenges with multicloud strategy
- 63% — Cloud security challenges
- 52% — Finding the “best-fit” platform for each workload (based on pricing, performance and/or capabilities)
- 50% — Increased complexity
Source: Foundry18
Plans for moving forward with modern platforms
While the majority (78%) of organizations intend to leverage more than one cloud provider over the next 12 months, it seems many are considering moving certain workloads back on-premises in pursuit of further optimization:
- 78% of organizations plan to leverage multicloud providers in the next 12 months.
- 1 in 5 are repatriating cloud workloads to an on-premises model.19
Tackling technical debt
Definition: The measure of the cost of reworking a solution caused by choosing an easy, yet limited, solution
One of the most important findings of this year’s survey is that technical debt now ranks as the #3 challenge to digital transformation — up from #6 in just one year.20 These findings highlight the impact of relying on quick fixes or shortcuts in IT modernization.’
- 86% have been impacted by technical debt in the last 12 months.
Top challenges affected by technical debt include:
- 43% — Limited ability to innovate
- 41% — Difficult meetings SLAs
- 37% — Outages/downtime21
How will leaders facing technical debt get out of this position? While survey data does not explicitly indicate respondents’ plans for handling technical debt, it does show that roughly half of organizations surveyed intend to increase the use of third-party services within the next year, as well as delay some IT investments due to budget and strategy shifts.22
Optimizing security integrations
Cybersecurity is a constant undercurrent in IT conversations, so it’s no surprise that it, too, tops the list. The three big security goals for the year are threat detection, threat response and user awareness/training.23 For context, more than half of respondents reported a security breach in the last year, and nearly half of respondents reported taking a week or more to recover.24
Cybersecurity challenges
Has your organization been impacted by a cybersecurity breach in the last 12 months?
- 51% — Yes
- 47% — No
- 2% — Don’t know
Length of time to recover from most recent cybersecurity breach (among those who have experienced a breach)
- 20% — One day
- 31% — Multiple days
- 49% — One week or more
Source: Foundry25
Technology challenges with respect to cybersecurity
- 48% — Protection against malware
- 33% — Network security
- 31% — Application security/DevOps
Source: Foundry26
Business challenges with respect to cybersecurity
- 35% — Lack of visibility into the threat landscape
- 34% — Updating governance, processes & procedures
- 30% — Regulatory compliance auditing & reporting
Source: Foundry27
Securing the future
As organizations begin to grasp the critical nature of having security integrated throughout all aspects of the business, cybersecurity priorities for the next 12 months are primarily focused on detection, resolution, and prevention of breaches and incidents, though other focus areas include improved experiences and compliance.
Priorities for improving cybersecurity — Next 12 months
- 49% — Improving detection of emerging threats (e.g. ransomware)
- 48% — Improving threat response/remediation capabilities
- 42% — Improving user security awareness/training
- 36% — Improving customer experience
- 33% — Enabling secure WFH/remote work
- 33% — Meeting governance & compliance regulations
- 32% — Securing the supply chain
- 29% — Building trust in systems & processes
Source: Foundry28
Maximize opportunity and minimize risk on the path to innovation.
When it comes to innovation, IT skills and knowledge gaps are still the #1 obstacle (45%).29 And in a volatile market environment, gaps can’t be ignored. Perhaps that’s why more than half of respondents intend to increase their use of third-party services in the next year.
When you’re ready to accelerate your path to innovation, Insight can help.
Insight can help. We help clients seize opportunity and mitigate transformation risks, enabling them to adapt and compete. We do this by helping them build, adopt, connect, automate and secure modern platforms. This empowers innovation and supports modern applications and advanced data and AI capabilities.
Citation
1 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
2 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 24. Commissioned by Insight.
3 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 24. Commissioned by Insight.
4 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
5 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
6 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
7 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
8 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
9 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
10 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
11 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
12 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
13 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
14 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
15 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
16 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
17 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
18 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
19 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
20 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
21 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
22 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
23 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
24 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
25 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
26 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
27 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
28 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
29 MarketPulse Research by Foundry Research Services. (January 2023). The Path to Digital Transformation: Where Leaders Stand in 2023. Slide 23. Commissioned by Insight.
