Modus Create, a global provider of digital transformation and product development services, announced the findings of its original study entitled the “2022 State of Digital Transformation.” This survey includes responses from 1,006 business executives and managers at private, for-profit companies in the United States.
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“In an analog world, IT was a commodity to be outsourced for the cheapest cost available,” said Pat Sheridan, CEO of Modus Create. “In the digital economy, it is the core IP with which you differentiate and deliver value.” However, not every organization realizes this. These survey results reaffirm that many companies are underspending on digital transformation, have not established clear plans and goals, and don’t have the processes or resources in place to successfully implement cross-functional digital initiatives.
Key Findings:
Digital initiatives are critical to American organizations
69% of American organizations consider digital initiatives to be critical, and 62% plan to pursue a digital initiative in 2022.
Executives/managers at large and medium-sized companies (by revenue) are more apt to claim that digital initiatives are critical than small companies (82% of large and 74% of medium vs. 57% of small companies).
Investments in digital initiatives vary greatly by company size. 38% of large companies plan to spend over $1 million on digital initiatives in 2022, compared to 22% medium and 2% small companies.
Improving cybersecurity and IT modernization are leading digital initiatives
32% of American organizations plan to strengthen their cybersecurity in the next two years, making it the most popular digital initiative of 2022.
41% of large enterprises will invest in IT modernization projects such as resolving technical debt and cloud migration in the next two years.
Innovation is becoming more decentralized
Only 11% of companies plan to create an Innovation Hub or Lab in the next two years, making it the least popular digital initiative of 2022.
Many business executives are overconfident about their ability to implement digital initiatives.
Two in three executives/managers (66%) are confident their company can successfully complete their digital initiatives, despite the fact that fewer (56%) say their organization is currently equipped with the resources, team and budget to succeed in this area, and just 51% have a clear plan and goals for digital transformation in the next 1-2 years.
39% of executives in large enterprises weren’t aware of their digital spending for 2022, compared to 18% medium and 11% small companies.
Nearly half of executives/managers (47%) indicate their company is spending less than $1M on digital initiatives in 2022.
Agile is popular among large enterprises
57% of large organizations have adopted an Agile framework for implementing digital initiatives, which is much higher than the average Agile adoption rate in the survey (43%).
Trends by Industry
Media/Entertainment (66%), Finance/Accounting (59%), Research/Engineering (54%), Manufacturing (50%), and Healthcare (45%) have a high percentage of executives who believe that digital initiatives are either extremely or very critical to their organization’s health. Wholesale/Retail (35%), Real Estate (25%), and Construction (23%) rank at the bottom.
The finance industry has the highest percentage of companies planning to spend over $1 million in 2022 on digital initiatives (31%), followed by Research/Engineering (26%).
Increased cybersecurity awareness is fueled both by a spate of high-profile cyberattacks in 2021 and new legislation for data protection by governments around the world. The report states that cybersecurity initiatives will be a gateway to wider digital transformation projects and a more mature software development ecosystem.
“The last five years of digital transformation focused on enabling new channels. Now, these channels have created massive data pipes and intelligence,” said Sheridan. “That’s where AI, ML, and next-gen software will come in to make sense of data and enable teams to deliver value back into the hands of users.”
About Modus Create
Modus Create builds customer-centric products, processes, and platforms to help businesses succeed in the digital economy. Our global team of strategists, designers, and technologists have helped the world’s biggest brands deliver powerful digital experiences to their clients. We work in an iterative, outcome-driven way to support our clients with product strategy, customer experience, full stack Agile software development, and security.