Digital transformation delays cost organisations over £3 million per project

As digital transformation remains top of the agenda for many businesses, research conducted for low-code application development platform, Toca, reveals the extent of the challenges faced by IT teams in delivering these projects. Looking at the top barriers to successful transformation, IT decision makers cited budget constraints, a lack of collaboration across the wider business, legacy systems, a shortage of developers and integration challenges as the top five. Consequently, 88% of IT decision makers are facing costly project delays – with the average digitalisation delay lasting five months at a cost of £20,200 a day, totalling £3,070,400. 

The survey of 200 IT decision makers reveals:

• 68% of organisations’ digital transformation projects are now expected to be delivered three times faster than five years ago. 

• However, 72% of IT leaders say the waiting lists for digital projects are getting longer. 

• As a result, 71% of IT leaders are struggling with the pressure of innovation. 

• Employee satisfaction, customer service and productivity are the top three areas being negatively affected by failure to match the speed of expected delivery for new applications or systems.

• 72% of IT leaders believe the days of large-scale projects are over, favouring smaller projects that deliver incremental business benefits faster. 

“Organisations are focusing attention on digital transformation projects to drive new business opportunities and to meet the growing expectation for seamless customer journeys, which have been heightened by newer, digital-first competitors entering the market,” comments Mat Rule, Founder and CEO of Toca. “This has placed IT teams under significant pressure, with issues like shorter timelines, tight budgets and legacy processes impacting the success of the projects. And with spiralling cost overruns and delays lasting months at a time, businesses are facing a growing issue as they try to deliver value with new applications and systems.”

Despite organisations making progress with digital transformation, almost all (94%) IT leaders confirm that “building apps, connecting systems and automating processes faster is business imperative.” To combat this, 89% of IT decision makers state they would prefer to leverage legacy systems to speed up digital projects, rather than rewrite and platform them. 

Yet the pressure to deliver is forcing organisations into sacrificing best practice for quick delivery.  In fact, 80% of IT leaders agree that the need for speed with digital projects is increasing technical debt at their organisation. This can impact other projects by creating a knock-on effect, with 76% of IT decision makers in agreement that technical debt holds them back from taking on new projects. 

This is hampering organisations’ ability to deploy digital technologies, with respondents reporting that on average they are only able to address one in four problems with digital transformation.  Over three quarters (79%) of IT decision makers confirm that processes aren’t automated because of time, cost, or complexity, despite the data revealing that automating manual tasks could save the average employee over five hours a week.  

“Digital transformation projects are proving challenging for businesses, as they tackle delays and cost overruns,” continues Mat Rule. “In order to drive quick digital wins and to solve more business problems,  organisations need to empower their development teams to be more productive and to overcome  the restraints of legacy technologies. To achieve this, businesses are increasingly looking at solutions like low-code development, which can enable IT teams to deliver flexible digital services in a matter of days, drastically reducing the cost and time of traditional development. Using low-code, businesses can build digital wrappers around their legacy systems and then integrate apps and portals to drive digital journeys.”