Global digital transformation investments are forecasted to reach $1.8 trillion in 2022, and financial businesses are experiencing rising pressure to digitally transform and prepare for the future.
At the same time, companies are facing rising demands to tackle new business needs, improve efficiency, and sustainability, meet ESG and financial requirements and enable secure data generation to improve the overall customer experience. In a significant evolving environment, embracing innovation is critical. At a recent finance summit, Jason Cao, the CEO of Huawei Global Digital Finance, shared his thoughts on how stakeholders can create a smarter and greener finance industry. Cao explains that technology continues to accelerate further developments in the finance industry, particularly with connectivity and intelligence. New super apps are transforming customer engagement in finance. Financial companies are beginning a new phase, a time with new services and products consistently evolving, presenting many opportunities and many challenges.
While there is clear evidence of the benefits of digitally transforming a business, there are significant barriers to adopting new technology, particularly concerning the inability to determine and measure the ROI of new systems. Research by IFS suggests that around 30% of global decision-makers believe the main barrier to adopting new technology is the inability to accurately measure value from investment within the digital transformation journey. Investment is considered one of the main barriers to digital transformation. Businesses require further clarity and confidence about what particular solutions will deliver.
The research by IFS claims that nearly 80% of business leaders believe new software solutions have the capabilities to measure critical KPIs. The report also suggests that other barriers include a lack of clarity regarding the resources and skills required, and nearly 20% believe a poor business case can result in an expensive adoption process.
Only a proportion of businesses interviewed confirm they have completed their digital transformation journeys. From a digital transformation perspective, nearly 40% see sustainable energy as having the largest impact on their business. There is rising demand for emerging, innovative products within the energy and green sectors. Data analytics is regarded as the most critical solution, followed by virtual assistants and the Internet of Things (IoT).
Carol Johnston, the VP of Energy, Utilities and Resources at IFS, explains that the recent study suggests energy businesses are limited from progressing with digital transformation plans by lacking the ability to define and measure how they will gain a return on investment from new solutions. Energy industry companies are typically cautious of potential risks and often deal with regulators, and other relevant stakeholders to demand clear proof of a return on their investment. The inability to put an actual number on these solutions and highlight what they will get in return for their spending impacts overall progression.
These are barriers that more sophisticated software solutions are capable of tackling. Due to the economic and social challenges faced in the industry, it isn’t possible to continue business as usual, and fortunately, many companies recognise that change is a necessity.
