Infosys Digital Radar 2022 Finds Technology Adoption Alone No Longer the Key to Unlocking Success and Profits
Report finds companies can gain $357 billion in annual profits globally through people-focused transformation efforts and a commitment to ESG
Digital adoption alone is no longer enough to meet business objectives and drive profits, according to new research from Infosys Knowledge Institute (IKI), the thought leadership and research arm of Infosys (NSE, BSE,NYSE: INFY). 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. While businesses once faced a ‘digital ceiling’, unable to reach the most advanced levels of tech adoption, these adoption thresholds have become the minimum standard.
Infosys Digital Radar 2022 assessed the digital transformation efforts of companies on a Digital Maturity Index and found that companies have progressively adopted technology year-over-year. The report, which surveyed nearly 2,700 digital transformation leaders from the U.S., Europe, Asia and Australia, ranked the most digitally advanced companies as ‘Visionaries’, followed by ‘Explorers’ and then ‘Watchers’. From 2018 to 2020, a meaningful portion of businesses lagged far behind, watching the technology journeys of others before starting their own. This year’s findings, however, show that all respondents have graduated from the ‘Watchers’ category and are now all either ‘Visionaries’ or ‘Explorers’. Infosys has found that each industry has reached an age of digital maturity never seen before. The percentage of companies achieving moderate transformation success, the ‘Explorer’ tier, rose minimally. However, the ‘Visionary’ cluster grew from 22% in 2020 to 30% in 2021, the largest year-over-year increase for this cohort in the survey’s history, indicating that companies have broken through the ‘digital ceiling’ and being a top adopter is no longer an operational or financial differentiator.
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Companies across all industries have rushed to broadly implement technology
Companies are significantly increasing adoption of emerging technologies. More respondents reported implementing artificial intelligence (AI) and blockchain (73% and 71%, respectively) than mature and foundational cloud and legacy modernization (69% and 68%, respectively), suggesting that once emerging technologies (like AI) now show real promise, and enterprises are moving quickly and aggressively to implement them than in earlier times.
More than 90% of companies indicated they had at least started to adopt the 19 digital initiatives surveyed. Technology adoption in the healthcare industry, for example, 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.
As adoption rates soared during the pandemic, the study also indicated a point of diminishing returns for companies with high levels of adoption. Companies with above-average adoption rates, in fact, generated slightly less profit growth than those with lower adoption, while those with average rates generated the most. The study data suggests that mere adoption is not enough, what matters most is the effectiveness with which companies use their technology.
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Previous surveys found adopting Agile, cloud, and other technologies led to better operational and financial benefits, but that was no longer the case in 2021, as more companies approached digital maturity. Further, the survey found companies are more effective when they use digital to positively impact stakeholders, including through environmental and social responsibility and initiatives like career paths for women and minorities, data privacy, and AI ethics.
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 digitize, some still haven’t realized the need to use these digital tools to engage their stakeholders more purposefully and respond to calls to serve people, planet, and community.”
