The majority of organisations are struggling with digitisation, according to the Measuring digital adoption: A path forward for CIOs report, which was based on a survey of 255 UK CIOs.
The study, commissioned by digital adoption platform provider Userlane and professional services provider PwC, found that the average large organisation completes five major software purchases and implementations every year, with an average cost of over £2.2m.
However, fewer than half of software purchases (45%) meet or exceed their expected return on investment (ROI). With more than half of these projects failing to deliver the right outcomes, the average firm is losing upwards of £6m annually.
Although almost two-thirds of CIOs (65%) are concerned that the state of the economy will affect their digital transformation plans, 62% plan to deepen their investment in technology over the next 12 months. Cost increases are anticipated across cloud-based software (61%), on-premise software (54%) and software training for employees (54%).
The CIOs who took part in the study estimated that employees use an average of just 40% of the available features of applications required for their job. Userlane and PwC warned that it was unsustainable for organisations to invest in enterprise software if employees are only using the most basic features it offers.
In the research report, Costas Michalia, group strategy director at digital strategy consultancy Fiora, described the challenge of having to manage “a never-ending list of interconnected decisions and challenges”.
When asked about digital transformation projects, he said: “Digital transformation or digital maturity is extremely hard and more often than not does not return the expected value in terms of business growth, efficiencies and fiscal return. It is well documented that in most cases the failure point is culture.”
Wolfgang Hufnagel, senior consultant, change management (people and organisation), at PwC, said: “CIOs today face the complicated task of fully understanding and optimising the return on investment on their company’s software purchases. A crucial piece of this puzzle is developing the capability to track and measure digital adoption among employees, identify areas for improvement, and tailor training and support programmes to better meet their needs.
“Having a user-centric, cross-application analytics tool completely transforms the way CIOs are able to make decisions today. It empowers executives to track progress in adoption over time and make more informed, data-driven decisions, faster. This will ultimately lead to IT driving critical business growth and a culture of innovation through smarter technology investments.”
Userlane CEO Hartmurt Hahn said: “The impact of new technology on people’s productivity has mostly been a black box. Even worse, people complain about friction as they have to deal with rapid change amid a constant flow of new technologies and processes. Understanding how people adopt and use new software will be crucial for CIOs and IT leaders in the years ahead.”