UK organisations increase digital transformation investment as delivery challenges persist

Spending on digital transformation projects has increased year-on-year for 85% of medium- to large-sized UK organisations, according to a recent study. The majority of these organisations allocate between £10–25 million annually to digital transformation initiatives. However, many projects encounter challenges during the implementation phase, which can slow progress.

The survey, conducted by digital agency Reading Room, involved 150 senior UK digital transformation leaders. It found that a third of respondents identified the implementation and integration phase as the primary point where projects stall. Strategy and planning were cited next at 17%, followed by difficulties during budget approval at 15%.

In addition, more than half (54%) of organisations reported that most of their digital transformation projects exceed their planned schedules. Among those experiencing delays, 56% said overruns typically last between three to six months, while 10% reported delays of up to a year.

Compliance and security considerations were identified as the most significant factors affecting digital delivery, followed by challenges related to data quality and legacy technology. The findings indicate that implementation challenges are more prominent than constraints around investment intent or strategic direction, a pattern also reflected in National Audit Office (NAO) reports on government digital projects.

Overall, the research suggests a consistent set of implementation-related challenges across sectors, organisation types, and revenue levels. A key factor highlighted is that the complexity of large-scale transformation can be underestimated. Successful digital transformation typically requires alignment across platforms, data, and programme delivery, as well as organisational and cultural readiness.

The survey also notes that transformation initiatives are often led by internal advocates who prioritise change. However, achieving broad organisational alignment among all stakeholders involved in day-to-day operations remains a significant factor in successful implementation.

Additionally, organisations reported managing multiple priorities simultaneously, with 29% of respondents indicating they are running between six and ten digital transformation projects at the same time. For half of these organisations, this level of concurrent activity is associated with slower project progress.

While demand for digital transformation continues to grow, many organisations are balancing multiple initiatives at once. The research indicates that projects with clearly defined business cases, agreed outcomes, and structured phases tend to progress more smoothly, particularly when focus is maintained on a smaller number of business-critical priorities rather than a large number of overlapping initiatives.