Eighty percent of companies are shifting their digital transformation efforts into high gear to execute in a matter of weeks what would normally have taken them years, according to the latest Dell Technologies' Digital Transformation Index (DT Index).

Although 2020 has been a year of characterized by constant chaos, it has also provided some much needed clarity particularly for the vast majority (89%) of organizations that now recognize the need for more agile and scalable IT infrastructure as a means to harden their business against future shocks, the report found. According to the 2020 DT Index, the top five technology investments for the next one to three years are: security, data management tools, 5G infrastructure, privacy software, and multi-cloud environment. 

This DT Index is a biennial global benchmark that illustrates businesses’ status of digital transformation across the globe and how they are performing in this digital age. Dell claims the third installment of the report is “one of the first global studies to measure business behavior as a result of the pandemic.”

Dell partnered with independent research company Vanson Bourne to survey 4,300 business decision makers from mid- to large-enterprises. The survey was conducted in July and August across 12 industries in 18 countries to examine enterprise organizations IT strategy, workforce transformation initiatives, and perceived performance efforts.

If the coronavirus pandemic has taught organizations anything, it’s that they have no choice but to refocus business investments from foundational technologies, such as cybersecurity and data management tools, to emerging technologies, like containers, AI, and edge. And this is creating turbulence.

This is good news, said Jon Hyde, senior director of technology thought leadership and emerging technologies at Dell Technologies. However, "we also see that this concerted effort has taken its toll: 48% fear their teams are at risk of burn-out from trying to adapt their IT strategy in these abnormal times," he added. "We know that the pace of change is only accelerating and the demand to become more agile will increase."

The DT Index tracks businesses digital maturation and segments organizations into five groups: digital leaders, which are the most digitally mature organizations; digital adopters, the second most digitally mature group; digital evaluators, or the gradual rollout planners; digital followers, which have made tentative plans and few investments; and digital laggards, or the least digitally mature group.

This year marked the first rise in the number of digital leaders to 6%, up from 5% in 2016 and 2018. Meanwhile, digital adopters saw a 16% increase from 23% in 2018 to 39% in 2020. Findings from the survey also recorded a modest drop in the number of digital laggards (6%) since 2018 and a 17% decline in the number of digital followers. 

Pre-pandemic saw the pace of transformation lagging, the report states, making the imperative to transform in recent months even more challenging. As companies brace themselves for the change ahead, 33% of enterprises surveyed said they are worried their organizations may not survive the next couple of years.

Undertaking massive change of any kind isn’t easy, but in a year that has consistently delivered chaos, transformation has become all the more challenging and elusive. In fact, 94% enterprises surveyed said they are facing entrenched barriers to transformation. 

The top three barriers to digital transformation success include: data privacy and cybersecurity concerns, which moved up from fifth place in 2016; lack of budget and resources; and the inability to extract insights from data and/or information overload, which jumped eight places since 2016. 

According to the report, digital leaders and adopters are more likely to cite data privacy and security concerns as a major barrier to transformation, which the researchers said “suggests a level of awareness that others lack.” According to Hyde, "Digital transformation comes with new digital risks, which brings an increase in threats, vulnerabilities, and consequences at a scale, scope and speed we are only just beginning to understand," which is something that digital leaders and adopters recognize warrants proper consideration.

Interestingly, Hyde noted, financial constraints haven’t slowed the pace of digital transformation for digital leaders and adopters. As for the remainder of respondents, Hyde said that lack of money and resources can be a result of "treating the IT function as a cost center, as opposed to strategic driver for innovation." However, "it takes on new resonance when linked with the net-new barrier: 'lack of economic growth,'" he added.

Inability to extract insights from data and/or information overload climbed from 11th place in 2016 to second in 2018 and remains a significant barrier. In fact, 91% of businesses agree that extracting valuable insights from data will be more important for their business than ever before.

At a time where businesses are struggling to address the immediate challenges of remote work and constrained budgets by investing in digital transformation, the research findings suggest continual investment, amid the uncertainty, is necessary to shape the future that businesses want.