State of App Strategy 2023: Digital Transformation Journey Is Finally Paying Off

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Lori MacVittie
Published February 21, 2023

For nearly five years the market has been hyping up the urgent need for digital transformation. For four years we’ve been tracking the progress of organizations’ digital transformation journey across the globe, in every industry, as they jumped on the train and undertook one of the most monumental technological efforts of the century.

Progress has been slow, but steady. As we explored the data for this year’s State of App Strategy report, we saw the natural ebb and flow of organizations from one phase of digital transformation to another, then back, then forward again.

SOAS 2023

This ebb and flow is natural, primarily because a significant portion of most businesses has never been digitized. Entire departments—business functions—have never moved from traditional manual, paper-based processes to automated, application-based services. So when organizations jump into phase two and begin stitching together digital services that represent business processes, they often run straight into a manual task that turns out to be in the critical path. A return to phase one, to digitize that function, is necessary.

This happens more than you might think, as legal, HR, finance, and a host of other traditional back-office functions become the focal point of a larger, cross-organizational effort to deliver a digital service. Our findings show that business functions and general operations are seeing more attention this year than ever. Not enough to overshadow IT in general, but enough to push customer-facing functions down to number three on the list of digital transformation journey priorities.

Now, you’d think over five years—especially with the frenetic pace set during the pandemic—that organizations would at least start seeing some kind of return on their investment and efforts.

You’d be right.

This year we asked what benefits, if any, organizations were seeing from their digital transformation journey. The results were not surprising based on historical data and shifts in priorities.

SOAS 2023

Over the past few years we’ve seen priorities placed in three areas: IT, business functions, and customer-facing activities.

Given that the relationship between automation, workflows, and efficiency is well-understood, it’s no surprise to see “efficiency” of both business and IT operations leading the benefits organizations are enjoying. Similarly, that employee productivity gains are in the top five benefits is a testament to the value of moving from manual methods and processes to digital services and automated workflows.

That organizations are seeing better alignment of IT with business outcomes is encouraging. The end state—if such a thing exists and is reachable—for every digital transformation journey is a digital business in which technology and business strategies are indistinguishable. Alignment is not only desirable, but necessary, for organizations to make the leap from a traditional business sporting a digital façade to a fully operational digital business.

Now, we still have over a month before the full results of our annual survey are available, so I don’t want to spoil too much, but there are some fascinating findings that point to:

Yes, I said networking. As in multi-cloud networking. Get out your packet filters, because the network is hot again.  

You really don’t want to miss it. So, stay tuned, and we’ll be back soon with more findings from the State of App Strategy.