Infosys: Digital adoption is not enough to drive profits
New research from Infosys Knowledge Institute (IKI), the research arm of Infosys, has found that digital adoption alone is no longer enough to meet business objectives and drive profits.
Infosys Digital Radar 2022, which surveyed nearly 2,700 digital transformation leaders from the US, Europe, Asia and Australia, assessed the digital transformation efforts of companies on a Digital Maturity Index and found that companies have progressively adopted technology year-over-year.
The study reveals that companies must now use digital to differentiate beyond traditional IT metrics, reaffirming the importance of people-focused transformation and ESG in achieving business success.
Emerging technology adoption soared during the pandemic
The study found that emerging technologies are increasingly being adopted by companies. Respondents reported implementing artificial intelligence (AI) and blockchain (73% and 71%) more than mature and foundational cloud and legacy modernisation (69% and 68%).
More than 90% of companies indicated they had at least started to adopt the 19 digital initiatives surveyed. Adoption rates soared during the pandemic, and the study also indicated a point of diminishing returns for companies with high levels of adoption.
Technology adoption in the healthcare industry increased from 60% to 98% since 2019. The adoption rate for the manufacturing sector increased from 81% to 97%, and the rate for the financial services sector grew from 59% to 94% in the same period.
Salil Parekh, CEO, Infosys, commented: "Enterprises are at an inflection point post-pandemic. COVID-19's widespread disruption and the subsequent digital acceleration have permanently altered how the world views technology. While some enterprises have seen this as an opportunity to move beyond the questions of whether and how far to digitise, some still haven't realised the need to use these digital tools to engage their stakeholders more purposefully and respond to calls to serve people, planet, and community."
A focus on ESG means using technology more effectively
The study found that when companies have high levels of tech adoption and strong ESG commitment, four out of five times (81%), they also use technology most effectively.
While digital adoption and ESG orientation individually drive profits, they are more effective together. The research identified four approaches to amplify purpose and increase transformation effectiveness:
- Integrate experience into the operating model. Digital Radar 2022 found that people-focused experience goals such as improved customer engagement, building a data-driven culture and increasing employee engagement are distinguishing top performers than tech-driven efficiency.
- Elevate the human element across the life cycle. Companies can emphasise the human element by utilising Agile to coordinate small behavioural nudges and include a diverse ecosystem to better manage project delivery. Companies that rapidly implemented Agile, and in more than half (60%) their teams, were more likely to grow faster than peers (64% vs. 54% average).
- Build diverse, dedicated teams so that tech solutions meet the needs of all. Purpose-driven culture is created through teams that are intellectually diverse and have a shared, dedicated purpose. Digital Radar 2022 concluded companies with greater diversity use technology more effectively.
- Measure initiatives using ESG target. Human-centered approach to solutions and ESG are becoming more quantitative and metrics-driven. Companies today can chase loftier goals practically, armed with technologies to help them set and meet important climate and people goals.
Jeff Kavanaugh, VP and Global Head at Infosys Knowledge Institute, commented: "This year's Digital Radar research revealed a significant shift – no longer are enterprises sitting, waiting, and watching from the outside as others embrace digital. The most successful businesses are no longer early digital adopters, nor those that invested the most in AI, blockchain, and IoT. Those most successful firms now see value in the relationship between digital technologies and the people they serve. The companies best prepared to enter the post-pandemic era have already realised that technology itself isn't a differentiator, but a commitment to people and purpose."
