Report: AI leads digital transformation, but companies are not ready

For many businesses, successful digital transformation remains elusive - a cause not helped by today's ever-increasing number of channels and a more demanding, less loyal customer base. In fact, the success rates of digital transformation programs have been notoriously low with 37% of digital transformation projects failing, according to a recent study by VML Enterprise Solutions. Leading the force to review digital transformation plans is AI, however it is not without its challenges. 

According to the report, 60% of survey respondents cited AI as being a key area of focus for digital transformation projects. This is especially since the new technology opens up unmissable opportunities for making digital change bigger and better. In fact, 78% of transformers believe that their businesses' ability to effectively run and deliver digital transformation projects will improve with AI.

Additionally, over three-quarters (77%) of transformers say that the emergence of AI has forced them to revisit and review their transformation strategies too. 

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Meanwhile, 79% agree that generative AI is having a significant impact on how they transform, as it shakes up their processes people and technology. Notably, the pace of AI-driven change is proving a major friction point for many businesses where 64% have said that the speed of AI evolution is making it difficult to make long-term transformation decisions. 

Moreover, there are a number of different areas of digital transformation that are being stress-tested by the emergence of AI and its capabilities, said the report. This is reflected in data systems and technology infrastructure where 61% of those surveyed said their current infrastructure are not adequate to accommodate their AI ambitions. 

Budgets too are under pressure with 73% saying that they have had to review their digital transformation budgets to accommodate AI initiatives. In addition, 66% of employees have said that their ability to harness the transformative powers of AI are being held back by employees who are struggling to adapt to AI-driven processes.

On the other hand, 60% of employees admit they lack the internal expertise to properly implement AI within their transformations. 

Key actions to overcome barriers

To overcome these challenges, transformers must first reassess their transformation strategies through an AI lens and create an AI-focused review of current transformation roadmap. Current infrastructures must also be upgraded for AI readiness, said the report adding that the technical foundation must be assessed and enhanced before launching AI projects. It should also focus on data processing and storage capabilities.

In addition, companies need to create AI-specific budget allocations and establish dedicated funding streams for AI initiatives while protecting core transformation budgets.

Building flexible AI implementation plans and developing phased approaches that balance innovation with practical adoption rates is also a key action, stated the report.

Most businesses can’t do digital transformation alone and rely on third parties with specialist expertise. With 81% of all businesses using external partners for their transformation projects, AI expertise has since become the most important skill too. 

According to a LinkedIn report earlier in March this year, AI literacy is the fastest-growing skill among professionals, with hiring for AI-related roles surging 240% over the past eight years. However, soft skills like strategic thinking, adaptability and conflict resolution are emerging as equally critical in an evolving job market.

In fact, LinkedIn predicts that 70% of job skills will change by 2030, driven by the rapid adoption of AI across industries, a shifting political and economic climate, increased return-to-office mandates and growing demand for cross-functional and problem-solving skills. 

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