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DIGITAL ENTERPRISE MATURITY 3.0 - Boosting Business Resilience through Technology

With digital transformation becoming ‘table stakes’, enterprises need to not only fast-track foundational maturity alongside testing out emerging technologies, but also continually measure, assess, and improve upon their current digital transformation decisions. This presents digital solution providers the opportunity to become preferred partners for enterprises by bringing in the right balance between scaling existing digital projects for cross-functional impact and innovating rapidly with the next set of emerging technologies. In this context, NASSCOM and Avasant bring the “Digital Enterprise Maturity 3.0 - Boosting Business Resilience through Technology” report which is an in-depth analysis of practices by 550 global end-user enterprises, across 11 major sectors and 4 major geographic regions, positioned at varying levels of digital maturity.

The study is based on the findings of the “Digital Enterprise Survey” conducted in May’2022, capturing the end-user’s perspective on digital transformation in their respective organizations. The findings from the survey were aggregated and analyzed to construct “The Digital Enterprise Maturity Index” – a multivariate assessment framework that defines key attributes of highly mature digital enterprises to enable calibration of enterprise, sector, regional, and overall global digital maturity, year-on-year.

Compared with the pre-pandemic trends reported in the first Digital Enterprise report in early 2020, a faster “shift-up” along the maturity curve is being seen in the current edition of the report, with a robust outlook for the ongoing financial year, FY2023. Moreover, while unravelling the nuances of the key attributes of a mature digital enterprise, the study also corroborates the fact that digital maturity is a journey with moving goalposts and the Digital Enterprise Maturity Index will strive to track these trends year-on-year.

 

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Key Findings

State of Technology Adoption

  • 67% enterprises spend 4%+ of revenue on IT; ~33% earmark >30% of IT budgets for digital spend
  • 97% enterprises increased spending on foundational digital technologies – Cybersecurity, Cloud, and Big Data Analytics in that order - in FY2022; Cybersecurity remains top priority
  • ~65% enterprises digitalized >40% of their business workflows for IT and sales & marketing functions
  • Across sectors - digital maturity correlates strongly with maturity of ESG practices
  • More than 2X rise in enterprises that offered flexible work models to 40%+ of their workforce seen between FY2020 and FY2022
  • Globally, the imperative for digital transformation is shifting from a CX-only model to a CX+EX based model
NASSCOM-Avasant Digital Enterprise Maturity model

  • Three dimensions, namely Digital Strategy and Investments, Technology Adoption, and Digital Talent and 14 primary parameters form the Digital Enterprise Maturity Index
  • Five Maturity Categories: Beginner, Follower, Striver, Accelerator, and Transformer. Transformers are the most digitally mature organizations
  • Transformers have grown by 2X between FY2019 and FY2022
  • Key attributes of Transformers:
    • 60%+ are large; midsized ones evolving fast, particularly in APAC
    • 38% spent >4% of FY2022 revenue on digital
    • 90%+ expect to increase spend across major mainstream digital technologies; 33% expect to spend more in emerging technologies - 5G/6G/WiFi6, Verse of Things, Web 3.0, etc.
    • ~70% business workflows are on Cloud
    • 85%+ digitalized 40% or more of enterprise process workflows
    • 95% have >5% of their total workforce as “digital talent”
    • ~90% adopted well-defined global/regional ESG norm
Digital Enterprise Maturity- Sectoral trends

  • Top 3 sectors by digital enterprise maturity are Telecom, Media, and Entertainment (TME), Energy, Utilities, and Alternative resources and Retail & CPG, with TME leading in digital maturity.
    • 12% of enterprises in TME spent >50% of their IT budget on digital in FY2022, much higher than other sectors,
    • In Energy, Utilities, and Alternative resources, higher focus is on digital workforce as 22% of the digital spend is directed towards talent, and
    • In Retail & CPG, 50% enterprises are reskilling/upskilling their talent or acquihiring from startups to fulfill their digital talent requirements
  • 65%+ enterprises in TME, Retail & CPG and Healthcare and Life Sciences sectors exhibited high readiness for flexible work models, offering work-from-home/work-from-anywhere (WFH/WFA) models to 40%+ of their workforce in FY2023
FY2023 Enterprise Digital Spending Outlook

  • On average, enterprises planning to allocate 4-8% of revenues on technology in FY2023
  • >75% of enterprises will invest in Cybersecurity, Cloud/Edge Computing, and Big Data Analytics
  • ~55% of enterprises are willing to experiment/invest in emerging technologies, such as connectivity technologies (5G/6G and WiFi6), Verse of Things, Web 3.0 etc.
  • 1-in-3 enterprises plan to have >15% of digital talent in their total workforce
  • 70% of enterprises plan to adopt a flexible work model in FY2023 with >40% WFH/WFA workforce mix

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