Dive Brief:
- The top challenge for businesses with digital transformation goals in 2023 is picking where to direct spending on disruptive technologies, according to a BCG X report published Thursday.
- Three in five businesses plan to increase spending on digital transformation next year, according to the survey, which consulted 2,600 executives globally. Yet 4 in 5 say selecting the most appropriate disruptive technologies is a top challenge amid the push for modernization, alongside quickly achieving scale with new digital solutions and recruiting talent.
- Advanced AI, blockchain and the internet of things comprise the top three technology categories with the most power to transform business, according to the survey.
Dive Insight:
Executives are approaching 2023 with skepticism, as macroeconomic projections send mixed signals about the environment they'll have to confront in the coming months. But one priority is clear: investing in technology means the potential for flexibility and scale.
Picking 2023 spending priorities is difficult given the depth of the vendor field across each category, said Sesh Iyer, Regional Chair of BCG X, a new business unit within Boston Consulting Group.
"I think organizations struggle because there is so much to sort through, and they necessarily don't have the talent to do it," said Iyer.
A modern tech stack requires several layers of technology to operate seamlessly together. In the data and AI category alone, providers offer solutions across data infrastructure, data governance, AI and analytics, machine learning and more.
It's up to business leaders to be thoughtful about picking the right components, leading with business value and speed. "Those are two things that I would put front and center," Iyer said.
Choosing the right technology is only the start. Iyer proposes five key areas to assess while putting together technology strategies that can deliver value:
- Which technology to use
- How to reach deployment at scale
- Who will do the work
- What projects to prioritize
- When the initiative will yield a return on investment
In 2023, executives plan to direct $4.6 trillion into enterprise IT spending, a year-over-year increase of 5.1%, according to Gartner projections . Although some companies are raising concerns about the macroeconomic environment, and others paused hiring or laid off staff, the technology function remains critical to operations in most businesses.
To choose the most investment-worthy technologies, businesses can turn to cross-functional teams capable of grasping technology and business needs, according to Iyer.
"All of that needs to come together to make a decision in terms of what the right solution is," he said.
