Businesses Face a Digital Ceiling in their Transformation Progress, Infosys Digital Radar Reveals

PR82623

DAVOS, Switzerland, January 22/PRNewswire=KYODO JBN/ --

- Infosys Digital Radar 2020 finds that few companies have progressed to the

most advanced stages of digital transformation this year

- Companies that centre their transformation initiatives around employees

achieve the highest levels of digital maturity

- Top performers also approach transformation as series of rapid-feedback

loops, rather than a long, linear process

    Businesses globally face a "digital ceiling" when it comes to digital

transformation, according to new research from Infosys Knowledge Institute

(IKI) [https://www.infosys.com/about/knowledge-institute.html], the thought

leadership and research arm of Infosys [http://www.infosys.com/] (NYSE: INFY),

a global leader in next-generation digital services and consulting. The study

reveals that businesses must change their mindsets to achieve sophisticated

levels of digital maturity.

    Infosys Digital Radar 2020 assessed the digital transformation efforts of

companies on a Digital Maturity Index and found year-over-year progress in

basic areas, such as digital initiatives to improve a company's efficiency.

However, most companies come up against a "digital ceiling" when trying to

achieve the most advanced levels of maturity.

    The report, which surveyed over 1,000 executives globally, ranked the most

digitally advanced companies as "Visionaries", followed by "Explorers" and then

"Watchers."

    Companies know how to achieve moderate transformation success, with an 18

per cent increase in companies progressing this year from the lowest tier of

Watchers to the middle Explorer tier. However, Explorers struggled to move into

the top Visionary cluster, with the top tier remaining the same, indicating a

"digital ceiling" to transformation efforts.

    The Visionary cluster remains unchanged despite companies reporting fewer

barriers to digital transformation than last year. Human, rather than

technological, barriers are now the most persistent, with the two of the top

hurdles being the lack of talent or skills (34 per cent) and a risk-averse

corporate culture (35 per cent).

    How to break through the digital ceiling?

    The research demonstrates that top performers break through the digital

ceiling because they think differently.

    Firstly, successful companies focus strongly on people, using digital

transformation to make improvements centred on customers and employees.

Most companies (68 per cent) across the spectrum stated operational efficiency

and increased productivity as a main transformation objective. But successful

companies in the Visionary cluster are particularly motivated to make

improvements for their employees. Nearly half of Visionaries describe

"empowering employees" as a major business objective for transformation,

compared with less than one third of Explorers and less than one fifth of

Watchers.

Likewise, Visionaries have an increased focus on customer centred initiatives,

being significantly more likely than other clusters to undertake transformation

to improve customer experiences and engagement and in order to respond more

quickly to customer needs.

    Secondly, successful companies have a different mindset when it comes to

transformation processes.

    Traditional linear transformations result in long transformation timelines,

meaning a company's improvements are out of date by the time the process is

complete. Instead, top performers demonstrate a cyclical mindset, implementing

recurring rapid feedback loops to accelerate transformation and keep updates

relevant. The Visionary cluster is far ahead of others in digital initiatives

tied to quick cycles: 75 per cent operate at scale in Agile and DevOps,

compared with an overall average of 34 per cent for the entire survey group.

    Businesses overestimate tech barriers and underestimate the importance of a

company's mindset

    The importance of culture and a cyclical transformation mindset to breaking

through the digital ceiling were underestimated by businesses last year.

    In the 2019 Digital Radar report, companies were asked to predict the

biggest barriers to their transformation progress for the following year. This

year's Infosys Digital Radar 2020 compares these predictions to the actual

challenges businesses faced in 2019.

    Businesses reported dramatic declines in the impact that technological

barriers have on their transformation progress, including:

- Inability to experiment quickly (down 49 per cent);

- Insufficient budget (down 40 per cent);

- Cybersecurity challenges (down 40 per cent).

    However, businesses made much less progress against cultural barriers,

including lack of change management capabilities (down 7 per cent) and lack of

talent (down 6 per cent).

    Progress across industries and geographies

- The technology and telecom industries continue to rank highest on the Digital

Maturity Index this year.

- Consumer packaged goods, logistics, and healthcare achieved strong

year-on-year improvements. The report's anecdotes from executive interviews

suggest that the adoption of telematics, the Internet of Things and smart

medical devices contributed to these increases. Likewise, the automotive

industry placed fourth by digital maturity and featured the second highest

percentage of Visionaries (30 per cent of those surveyed).

- The insurance industry lags significantly behind other sectors, featuring the

highest percentage of Watchers (17 per cent).

- The digital ceiling was most dramatic in China, where 23 per cent of

companies moved from Watcher to Explorer (which rose from 64 per cent to 87 per

cent), but the percentage in the Visionary category (8 per cent) remained the

same.

    Salil Parekh, CEO and MD at Infosys, commented: "We've seen enterprises

successfully employ emerging technologies to optimise productivity and

efficiency, but struggle at the next stage of digital maturity. Faster, better,

and cheaper technology alone will not provide the improvements enterprises

need. Our research has shown that companies which can keep pace with digital

transformation are those that design digital initiatives to improve customer

experiences and empower their employees, differentiating themselves and

propelling their business to the most advanced levels of progress."

    Jeff Kavanaugh, VP and Global Head at Infosys Knowledge Institute

[https://www.infosys.com/about/knowledge-institute.html], commented: "This

year's Digital Radar research revealed significant progress across

transformation initiatives – however, traditional programme models are not

keeping up with the rapid pace of market change and companies face a distinct

barrier in reaching top levels of digital maturity.

   "The most successful businesses in our survey have an employee focus and a

circular transformation mindset, which enable top performers to kick off a

virtuous cycle in the company. The result is a "living enterprise" that is

constantly sensing, improving, and attuned to its customers and employees. This

living enterprise is suited to serving a larger circle of stakeholders –

employees, customers, suppliers, local communities, and larger society – not

just shareholders."

    For a full copy of the Infosys Digital Radar 2020, please visit:

https://www.infosys.com/navigate-your-next/research/digital-radar-report.html

    Notes to Editors

    Survey Methodology

    From November 12 to 30, 2019, Infosys used a blind format to conduct an

online survey that attracted responses from more than 1,000 CXO and other

senior-level respondents from companies with revenue greater than US$1 Billion.

Respondents represented multiple industries and hailed from Australia, Canada,

China, France, Germany, India, New Zealand, U.K. and the U.S. To gain

additional qualitative insights, phone interviews were also conducted with a

few practitioners and subject matter experts.

    About Infosys

    Infosys is a global leader in next-generation digital services and

consulting. We enable clients in 46 countries to navigate their digital

transformation. With over three decades of experience in managing the systems

and workings of global enterprises, we expertly steer our clients through their

digital journey. We do it by enabling the enterprise with an AI-powered core

that helps prioritize the execution of change. We also empower the business

with agile digital at scale to deliver unprecedented levels of performance and

customer delight. Our always-on learning agenda drives their continuous

improvement through building and transferring digital skills, expertise, and

ideas from our innovation ecosystem.

    Visit www.infosys.com to see how Infosys (NYSE: INFY) can help your

enterprise navigate your next.

    Safe Harbor

    Certain statements mentioned in this presentation concerning our future

growth prospects are forward-looking statements regarding our future business

expectations intended to qualify for the 'safe harbor' under the Private

Securities Litigation Reform Act of 1995, which involve a number of risks and

uncertainties that could cause actual results to differ materially from those

in such forward-looking statements. The risks and uncertainties relating to

these statements include, but are not limited to, risks and uncertainties

regarding fluctuations in earnings, fluctuations in foreign exchange rates, our

ability to manage growth, intense competition in IT services including those

factors which may affect our cost advantage, wage increases in India, our

ability to attract and retain highly skilled professionals, time and cost

overruns on fixed-price, fixed-time frame contracts, client concentration,

restrictions on immigration, industry segment concentration, our ability to

manage our international operations, reduced demand for technology in our key

focus areas, disruptions in telecommunication networks or system failures, our

ability to successfully complete and integrate potential acquisitions,

liability for damages on our service contracts, the success of the companies in

which Infosys has made strategic investments, withdrawal or expiration of

governmental fiscal incentives, political instability and regional conflicts,

legal restrictions on raising capital or acquiring companies outside India, and

unauthorized use of our intellectual property and general economic conditions

affecting our industry. Additional risks that could affect our future operating

results are more fully described in our United States Securities and Exchange

Commission filings including our Annual Report on Form 20-F for the fiscal year

ended March 31, 2019. These filings are available at www.sec.gov

[http://www.sec.gov/]  Infosys may, from time to time, make additional written

and oral forward-looking statements, including statements contained in the

Company's filings with the Securities and Exchange Commission and our reports

to shareholders. The Company does not undertake to update any forward-looking

statements that may be made from time to time by or on behalf of the Company

unless it is required by law.

    Logo: https://mma.prnewswire.com/media/633365/Infosys_Logo.jpg

    Source: Infosys