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Tata Communications discovers digital transformation disparity in new study

Decision makers are optimistic about the impact of AI, IoT, predictive analytics and blockchain on business and society – but cost and security concerns and lack of skills are barriers to adoption

‘The Cycle of Progress’, a study by Tata Communications, a leading global digital infrastructure provider, reveals that leaders have vastly different takes on their organisation’s digital transformation compared with the managers who are implementing the new technologies. According to the survey, decision makers in Europe and North America are more optimistic about the potential of digital solutions in boosting their competitiveness compared with their peers in Asia and the Middle East. Yet, the perceived high cost of innovation, lack of skills and the threat of cyber-attacks are proving major barriers for digital transformation globally.

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The bi-annual study aims to assess the power and potential of digital infrastructure in the global digital economy by tracking decision makers’ views around emerging technologies.

Leaders believe their business is further along in the digital transformation journey than it really is

Board members and C-level respondents have drastically different views from the rest of their organisation in regard to the maturity of the implementation of new technologies. The study found that 41% of board members and 33% of C-level executives believe that they are leading their industry in adopting new technologies, in comparison to just 18% of directors and 14% of department heads.

‘The Cycle of Progress’ sounds a warning call for businesses, with a clear ‘perception versus reality’ gap emerging between different levels in organisations, as innovation gathers momentum,” said Srinivasan CR, Chief Digital Officer, Tata Communications. “This disparity highlights that directors and business unit heads must get better at informing the CEO of any challenges they are facing when rolling out new technologies such as IoT and AI. CEOs should ask their teams more probing questions and not get carried away by the digital transformation hype. This reality check will help businesses make the most of the latest technology innovations to deliver new customer experiences and reimagine how they operate.”

Businesses don’t believe the scaremongers – they are positive about the potential of technology innovation

Regardless of where their business is on its digital transformation journey, decision makers are firmly focused on the positive impact of technology. According to ‘The Cycle of Progress’, they see a ‘significant’ positive impact from IoT (48%), predictive analytics (43%) and AI (43%). The study also suggests that business leaders in the West tend to have a less optimistic view on AI than their Eastern counterparts. For example, decision makers in Germany and the UK see AI as having little or negative impact (29% in both countries), whereas Indian decision makers see it as having a significant or slight positive impact (95%).

Despite scaremongering by some that humans and robots can’t co-exist, our study clearly demonstrates that business leaders are focused on the positive impact of technology innovation,” continued Srinivasan CR. “And, while the AI hype machine may be rumbling into overdrive, it seems that currently businesses rate both IoT and predictive analytics as bigger drivers of digital transformation than the emerging uses of AI we hear so much about.

Technology brings new prosperity – but also problems

‘The Cycle of Progress’ suggests that some technologies are fast becoming ubiquitous in large and small organisations alike. IoT (53%), predictive analytics (51%), AI (46%) and blockchain (44%) are the most widely adopted in the respondents’ organisations, with Sales and Marketing and Customer Service functions further ahead in using these technologies than Finance, HR and Legal departments.

The study also shows that decision makers in Asia and Middle East have seen greater benefits than those in Europe and North America after deploying these technologies. For example, 41% of decision makers in Singapore have seen new sources of revenue from deploying IoT, compared with just 24% of those in Germany and 19% in the UK. Similarly, 40% of decision makers in UAE and Saudi Arabia say that the adoption of blockchain has made their business more secure, compared with just 16% in the UK.

The problems arising from deploying new technologies are universal. For example, 38% of respondents in North America and 36% of those in India say that they have experienced security issues after AI adoption. Regardless of these issues, respondents globally recognise that AI (72%), predictive analytics (73%), blockchain (65%), IoT (75%) and can all have a positive societal impact that goes beyond their own business.

Security and privacy concerns prevail

Despite the benefits of digital technologies, anxiety surrounding spiralling costs (43%) security (40%) and privacy (37%) are the key adoption barriers for business decision makers, according to ‘The Cycle of Progress’. Further to this, business leaders don’t feel prepared for the impact of digital innovations, with the lack of appropriate skills cited as a concern by 30% of all respondents and a similar proportion (28%) highlighting that there is a lack of understanding among employees about new technologies being implemented.

“Businesses’ technology requirements are growing in complexity in today’s digital economy: they need not only new platforms and systems on which to build new innovative services seamlessly and securely, but also an organisation-wide shift in mindset. In this landscape, there needs be a culture of constant learning and agility to accelerate digital transformation across the business,” concluded Srinivasan CR.

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