Transformation Funding is Broad Based
May 11, 2017
research shows that digital transformation initiatives are more
successful when they have buy-in from across the business, in a report
titled “Digital Transformation Trailblazing: A Data-Driven Approach.”
Findings from a survey of 400 senior IT executives across the U.S., U.K.
and Germany show that adoption of digital transformation initiatives is
widespread. When asked where they are in the journey, 55 percent believe
they are moving with the masses, while 36 percent believe they are ahead
of the curve. Respondents on average reported 29 percent of their IT
budget is dedicated to digital transformation projects, but the research
reveals these initiatives are more likely to succeed when funded from
outside IT. The organizations that are most mature when it comes to
digital-first strategies are more likely to indicate that funding comes
from departments such as product development, customer service, sales
“Having a digital transformation strategy and executing on it no longer
means you have an edge. If the majority of organizations are ‘moving
with the masses’ or believe they are ‘ahead of the curve’ then no one is
really standing out,” said Doug Merritt, president and CEO, Splunk.
“Organizations that rely on machine data to make better decisions gain a
strategic advantage over their competitors. It is not surprising that
those organizations with the most success are the ones collaborating –
and funding – cross-functionally. Data is a key driver in enabling that
collaboration and can help companies drive real-time business insights
to move faster to differentiate, innovate, raise revenues, reduce costs
and mitigate risks.”
Key findings from the report include:
• Funding for digital
transformation initiatives is on the rise: 67 percent of respondents
expect digital transformation budgets to increase, while only 8 percent
expect a decrease.
IT funding is only one of many sources for these initiatives: 69 percent
of respondents cite this as a key funding source. Outside the IT
department, product development is funding initiatives for a third (34
percent) of respondents, followed by customer service (30 percent),
sales (30 percent) and marketing (27 percent).
• Only 36 percent say
security is funding digital transformation, although this is the top
driver for these programs: 77 percent of respondents say security was a
critical or very important driver, with the top three rounded out by
improving customer acquisition and retention (72 percent) and reducing
costs through automation and improved efficiency (72 percent).
• Insight into
machine data is key to success: When asked about the ability to derive
real-time insights and business value from machine data to achieve their
digital business goals, more than two-thirds (68 percent) of respondents
say this is a critical or very important priority.