Legacy systems a major barrier to digital transformation, says report

Legacy systems, lack of change management capabilities and relevant skills are among the key hurdles for digital transformation in 2019, a report released Tuesday said.

The 'Infosys Digital Radar 2019' research report also found that companies must operate key digital initiatives at scale and focus on a broad range of technologies to reach the most advanced stage of digital transformation.

According to the report, businesses can be grouped into three clusters based on their progress along the digital transformation -- 'visionaries', 'explorers' and 'watchers'.

Visionaries are those who understand the potential of digital to completely transform their business while explorers commit to digital programmes driven by the need to enhance customer experience.

Watchers are those who see digital through the prism of efficiency, the report released at the World Economic Forum (WEF) annual summit here said.

Asked about the biggest barriers to digital transformation in 2019, as many as 41 per cent respondents said it was "legacy systems".

"The percentage of respondents citing the 'inability to experiment quickly' was 22 per cent and 'insufficient budget' was 30 per cent. However, 'legacy systems' was at 41 percent - making it the single biggest barrier predicted for 2019.

"Lack of change management capabilities and relevant skills are also seen as key hurdles in 2019," the report said.

In November 2018, the Infosys Knowledge Institute conducted an online survey that gathered responses from more than 1,000 CXOs and other senior-level executives. They were from companies having revenues of over USD 1 billion.

The respondents, representing multiple industries, hailed from Australia, China, France, Germany, India, the UK and the US.

Further, the report said that to become more like visionaries, companies should develop and implement a comprehensive strategy for using automation and AI to bolster human capabilities, rather than focusing shortsightedly on cutting costs.

"They need to put in place a formal digital transformation strategy, and share that plan with employees, customers and partners alike," it added.