Investment from Outside IT Is Key to Digital Transformation Success
May 15, 2017
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Digital transformation initiatives are more successful when they have buy-in from across the business, according to a new report titled Digital Transformation Trailblazing: A Data-Driven Approach conducted by IDG for Splunk.

Findings from the survey 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 and marketing.

“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.

Methodology: IDG surveyed more than 400 organizations in the US, UK and Germany. All of the respondents hold director-level or above IT or business titles, and their companies have revenues of $500 million or more (or at least 1,000 employees for public sector organizations).

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