90% of companies undergoing digital transformation facing 'significant obstacles'

Customers want more digital products and services, but businesses struggle with culture change and legacy system costs, according to an AppDirect survey.

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Nearly 80% of companies are in the process of digital transformation—but of those, 90% are facing significant obstacles to success, according to a Monday survey from AppDirect.

The top digital transformation challenge cited by 34% of the 481 executives surveyed is the build versus buy debate—whether to use internal resources to create a tech solution, or to work with a third-party vendor to acquire it, the report found.

Other top challenges cited by executives are company culture (32%)—specifically those that move too slowly or are too risk averse—along with the cost of upgrading legacy systems (31%) and lack of budget (31%), the survey found. A lack of understanding and knowledge (24%), lack of expertise or technology talent (23%), and a lack of digital transformation vision (20%) also have led companies to struggle.

Growth is the no. 1 driver of digital transformation, according to 45% of respondents who are in the process of or have plans for digital transformation, the survey found. Staying competitive (38%), operational efficiency (38%), and the increase in revenue (32%) are other top drivers of transformation projects.

Most organizations (85%) support digital transformation efforts, respondents said, with CTOs, CIOs, and CEOs being the most supportive members of the C-suite. This is in large part because the majority of executives see these efforts as paramount to future success: 69% of those surveyed agreed that only businesses that have digitally transformed will survive over the next five years, according to the survey. Another 84% said that their customers are already demanding more digital products and services.

Brittany LeMaro