The Internet of Things, artificial intelligence and cloud solutions are the most popular new technologies that have attracted the most investment over the past two years. They gained supporters among 55%, 52% and 53% of companies surveyed by EY, respectively. These are also the technologies in which companies plan to invest the most over the next two years - according to the results of the EY Digital Investment Index 2020 study.

What companies plan to implement

IoT solutions are planned for implementation by 67% of those surveyed by EY, artificial intelligence technologies are in the plans of 64% of respondents, and cloud solutions – 61%. Solutions in the areas of Blockchain, cybersecurity, intelligent process automation and augmented reality enjoy decidedly less interest.

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What will companies invest in over the next 2 years? [STUDY] — illustration 1

Fig. 1. Which technology investments has your company focused on over the past two years, and which does it intend to invest in over the next two?[/caption]

- Digital transformation enables not only dynamic growth, but also increased resilience of enterprises to a range of risks. Companies learned this in recent quarters, when the pandemic, as it were, forced them to adapt new technologies. In this breakthrough period, the use of digital tools allowed many companies to operate during lockdown, and the latest technological solutions improved, among other things, data analysis, transfer and storage, making it possible to respond to dynamically changing challenges. Digital transformation leaders increased their resilience, and thus their market advantage over those who are still carrying out digital transformation on a small scale, or who decide only to implement individual technologies and solutions – says Michał Kopyt, EY Partner, Leader of the Technology Consulting Practice.

How to build resilience

So how are companies fighting for the resilience of their enterprises? Digital transformation leaders focus primarily on developing digital competencies through mergers, acquisitions or partnerships. This approach is presented by 64% of companies. More than half of transformation leaders intend to focus on obtaining quick returns from implemented solutions, 49% want to abandon initiatives that are not necessary, and 46% want to accelerate the development of new digital products and services, as well as business models.

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What will companies invest in over the next 2 years? [STUDY] — illustration 2

Companies' investment plans for the next two years

Fig. 2. Actions considered by companies with regard to enterprise resilience[/caption]

However, the results of the EY Digital Investment Index 2020 study show that although most companies understand the need for digital transformation, scaling digital initiatives still remains a challenge. 79% of those surveyed by EY declare that their digitalization efforts are "stalling" in the initial phase. This happens due to a lack of appropriate employee skills (65% of respondents point to this issue), insufficient budget and financing (59%), or a lack of an appropriate operating model (45%). One third, in turn, do not have access to data.

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What will companies invest in over the next 2 years? [STUDY] — illustration 3

Fig. 3. Why are digital initiatives in your company “stalling”?[/caption]

Importantly, 45% of companies do not have an appropriate operating model that assumes digitalization processes, and 38% face a lack of strategy in this area. In 36% of companies there is a lack of a culture of innovation and experimentation, and 34% face increasing pressure to cut costs. This may explain why fewer than 10% of EY study respondents (including digital transformation leaders) declare that they are unable to fully feel the effect of their efforts undertaken for enterprise digitalization.

- In an environment of budgets limited for various reasons, proving the value of all investments - including digital ones - is becoming increasingly important. Although more than three quarters of management say that digital initiatives were crucial to their organization's success over the past two years, establishing exact data showing the scale and measurable effects of that success is still ongoing. Fewer than one quarter of managers surveyed by EY admit that they actively measure the return on digital investments (RODI), while other KPIs concerning financial results or operational performance are widely used – adds Michał Kopyt, EY Partner, Leader of the Technology Consulting Practice.

Summary

The EY Digital Investment Index 2020 study shows that IoT, artificial intelligence and cloud will remain the main areas of technology investment in the coming years — implementation plans are declared by 67%, 64% and 61% of companies, respectively. Although most organizations understand the need for digitalization, as many as 79% admit that their initiatives are "stalling" at the start, mainly due to competency gaps (65%) and insufficient budget (59%). Experts emphasize that transformation leaders focus on partnerships and quick returns on investment, but fewer than one quarter of managers actively measure RODI.