Dive Brief:
- Enterprises are struggling to turn digital transformation investments into results as IT stack complexity grows, according to a WalkMe report. WalkMe, a digital adoption platform provider acquired by SAP last year, surveyed nearly 4,000 enterprise leaders and employees around the world and incorporated usage data from its platform.
- The average large enterprise lost $104 million in 2024 due to underutilized technology, disjointed strategy and low adoption. Enterprises surveyed said nearly half of IT investments failed to deliver ROI.
- Around 43% of enterprise tech stacks are more complex than they were three years ago, and enterprise portfolios are expected to grow by 26% this year. On average, enterprises use 625 applications, 28% of which are AI tools.
Dive Insight:
Enterprises aren’t afraid to pour resources into potentially transformative technology projects even if they have yet to work out all the kinks.
Global tech spending is expected to grow 5.6% this year, nearing the $5 trillion mark, according to Forrester predictions. The advent of generative AI is often credited with renewing the need for and focus on modernization initiatives and wide-scale digital transformation.
CIOs found the path to AI readiness, however, was rougher than initially planned. Nearly 75% of business leaders believe poor prioritization and resource allocation contributed to the disconnect, citing investments in generative AI at the expense of data and analytics initiatives, according to a SoftServe report published this month.
Digital transformation investments “rarely produce their desired results,” WalkMe said in the report.
“Many grapple with ‘transformation debt,’” the report continued. “This term refers to the growing divide between innovation and tangible value, driven by challenges such as slow adoption of new applications, disjointed digital transformation strategies and underutilized technologies.”
Adopting digital adoption best practices, such as training employees to use new technologies and assessing user engagement, could help businesses make progress. Enterprises that implement one best practice nearly triple their digital transformation ROI compared with organizations that don’t, the WalkMe report found.
The push to introduce generative AI-related best practices has been palpable. The National Institute of Standards and Technology issued a voluntary risk management framework last year, MIT launched an AI risk database last August and other organizations have offered guidance to support holistic adoption approaches.
Moving forward on initiatives without the right foundation can prove costly. More than 90% of leaders expressed concern about generative AI pilots proceeding without addressing problems uncovered by previous initiatives, an Informatica report found.
