Legacy systems the biggest barrier for digital transformation: Infosys survey

Legacy systems are the single-largest obstacle facing enterprises in their digital transformation initiatives for 2019, according to global research conducted by homegrown IT giant Infosys,

As the Infosys Digital Radar 2019 report released earlier this week, 30% of the respondents to a survey identified insufficient budgets as a barrier while 22% cited the  ‘inability to experiment quickly’ as problematic.

Lack of change  management capabilities and relevant skills were also seen as hurdles.

Infosys drew its findings from a survey of 1,000 global chief experience officers and other senior-level respondents from companies with revenues of more than $1 billion.

The report also stated that running multiple digital initiatives at scale is what sets visionary businesses apart,.

It said that businesses can be grouped into three clusters based on their progress along the digital transformation journey, with visionaries the most advanced, followed by explorers and then watchers.

The categories are defined as visionaries who understand the potential of digital to completely transform their business, explorers who commit to digital programmes driven by the need to enhance customer experience and watchers who see digital through the prism of efficiency. 

Infosys identified 22 key digital initiatives and surveyed where companies stood on implementing each one. 

Companies were then assigned a Digital Maturity Index score from 0 to 100 according to their progress on pursuing and implementing these 22 key initiatives.

These 22 digital initiatives were also categorised under four big buckets: foundation initiatives - implemented to modernise legacy systems; mainstay initiatives focussed on core digital transformation elements such as automation and AI; customer initiatives focussed on improving the customer experience; and forefront initiatives focussed on harnessing cutting-edge technologies, such as augmented and virtual reality, drones and blockchain. 

The research revealed that as companies advance in their journey, they begin to operate more digital initiatives at scale, with visionaries averaging 12 at scale, and having completed pilots on seven additional initiatives. 

Explorers average six digital initiatives at scale and have completed pilot projects for seven more. Watchers typically operate at scale on only one or two digital initiatives, with another one or two initiatives in the pilot testing phase.

The survey revealed significant differences in digital maturity by industry. The highest maturity levels were found in technology, manufacturing, telco and financial services sectors.

In contrast, industries such as consumer goods, logistics and healthcare ranked near the bottom regarding their digital transformation progress. 

Compared to other industries, retail is in the middle of the pack, with many legacy retailers not having made much headway. The automotive sector lags other sectors in terms of its digital maturity. While autonomous and connected vehicles grab headlines, much work is needed to modernize legacy systems and integrate the automotive ecosystem, the report added.