There has been substantial upheaval to digital transformation plans, leading companies to waste nearly $5.5 million on failed projects – claimed Couchbase.
The current market crisis pushed enterprises to focus more on digital infrastructure, and this journey has contributed to a surge in innovative projects. Conversely, many technical blocks still get in the way of digital transformation initiatives – making businesses go through a significant loss.
Nearly 77% of organizations had to make “major” or “noticeable” modifications to their digital transformation plans. In many cases, they had to start again from scratch. However, the rate of innovation almost doubled since 2019 – rising from 85 to 14% YOY.
Likewise, enterprises were still able to develop the end-user experience while responding to the pandemic implicitly. Yet, the number of failed, scaled-back, or delayed projects is still high (79%). This indicates a major waste of resources – companies spent $5.5 million (on average) on failed projects over the year.
Even though COVID-19 caused a rapid reconsideration of digital transformation plans across industries, it did not end investments. Some of the principal findings from the study are –
- COVID-19 reaction supports the spending surge: An average digital transformation spend increased from $27 million per company in 2019 to $27.5 million in 2020. This aligned act amid the pandemic helped spending of enterprises in response to the uncertain market with – +3.8% in Germany to -0.7% in the UK, on an average of +2%.
- The end-user experience centers on the pandemic reaction: Nearly 55% of organizations made substantial or never-like improvements around the end-user experience in 2020, compared to 73% in 2019. However, about 17% of organizations created augmented end-user expertise because of the on-going global health emergency.
This pandemic was the most common influence either preventing companies from pursuing new digital transformation projects (3%), suffer delays, causing them to fail, or be scaled back (29%). Although there is a need to divert resources in response to the crisis, organizations are still pressing to go ahead with their digital transformation goals.
As mentioned by Ravi Mayuram, CTO and SVP of Engineering at Couchbase in the report – “Enterprises understand that the real test will be in how they adapt to life and business in 2021 and beyond…The underlying issues that were preventing modernization of an aging digital stack have been brought to the forefront by the pandemic, and there is now even greater impetus to accelerate digital transformation.”
Certainly, organizations that worked strategically to adapt and succeed amid the economic downturn should not see their gains wasted. Experts believe businesses need to make sure they have the resources ready to build upon their experiences to succeed with digital transformation plans.