Nuzoo blog: IT struggling to show return on DX investments

Despite all the talk of digital transformation being accelerated during the Covid-19 pandemic, new research shows that there is still a disconnect between the IT department and business decision makers. In fact, IT is struggling to demonstrate the ROI of their investments to the rest of the organisation.

A survey by technology consultancy Dae.mn shows that while the speed of digital transformation (DX) has accelerated over the last year, decision makers outside of IT departments fail to recognise the extent of change. Of the respondents that believe they have fully implemented their digital transformation strategy (35 percent), only 20 percent are decision makers outside the IT Department and 80 percent are IT decision makers. 

Moreover, ITDMs are struggling to demonstrate the impact of DX despite it being a priority. Of the respondents, 92 percent consider “proving business value of IT services” a high or top priority.

Calum Fitzgerald, co-founder of Dae.mn says demonstrating ROI has never been more important, but is clearly proving difficult. This is because there is too much of a rush to show ROI by companies, with research showing more than 75 percent of digital marketers are attempting to show ROI within the first month of implementation.

“There is too much pressure to prove the impossible,” he says. “The excitement surrounding DX initially is often dampened by the fact that organisations sometimes lack the skills internally to manage a project. Consequentially, they may have unrealistic expectations of DX initiatives and do not always fully understanding the business problem before jumping into a solution. Retraining and developing skills within employees has been proven to be more difficult than expected.”

Calum believes that IT departments and the rest of the business often have different objectives relating to digital transformation too.

“Communication is at the heart of this issue. Before undertaking a DX initiative, IT decision makers need to align with the rest of the business on objectives, timings, implementation plans, and importantly, how ROI will be measured.”

So is there an opportunity for channel partners to help convince business decision makers as to the potential impact of their IT investment?

“Before moving forward with technology, leaders need to invest in developing their employees’ skills first or look to outsource. They cannot rush process of implementing DX and need to realistic expectations of the time it will take test the application of the technology. Looking for expertise elsewhere can speed up that process,” says Calum.

“Once companies identify their main priorities to focus on for DX they need to develop the right metrics to track success. Knowing what to track will help provide the right data needed. Maintaining an open channel of communication with the rest of the business on any metrics will help make sure everyone is on the same page.”

Calum says that ultimately the solution lies in making sure that the objectives are agreed upon in the preliminary stages of any digital transformation project, and that they are measurable. Additionally, allowing leadership across the entire organisation to maintain visibility over digital transformation and communicating with them in terms that they will understand is crucial in mollifying any concerns that they may over budgets, implementation, or general disruption.

“Carefully selecting the right partner and technologies will help aide in the success of DX. Selecting the cheapest technology to show higher ROI can sometimes have the opposite effect.”