2021 Technology Digital Transformation Survey - BDO USA
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2021 Technology Digital Transformation Survey
Contents
03 Introduction
04 Tech Fast-Tracks Digital Transformation
06 Prioritizing the Customer Experience
in a Changing Environment
08 Optimizing Product & Process for Enhanced Reliability
10 Innovating With Trust… or Bust
12 Conclusion
2021 TECHNOLOGY DIGITAL TRANSFORMATION SURVEY 2
Introduction
After the events of last year, nearly every company had to become a tech company to survive. The pressure is still on.
Critical industries and processes are counting on tech companies not only for resilience but for growth.
The pandemic opened the world’s eyes to new possibilities that lie ahead—but also outlined the risks of failing
to innovate.
With digital demand increasing across every sector, the technology industry is accelerating its own digital
transformation plans too. BDO’s 2021 Technology Digital Transformation Survey found that:
92% of technology companies have a digital transformation strategy underway.
Building the business of the future will take a dual approach, but center on the singular disruptive driver: demand.
Demand has both surged and fundamentally changed. Convenience is not as important as reliability. New business
models mean new opportunities.
In the short-term, tech companies will fine-tune operations and critical processes—such as supply chain and
security measures—to ensure that they perform under increased demand and ongoing pressure. At the same time,
tech companies will invest in what’s next by introducing new products and upgrading the customer experience.
By focusing on meeting demand and bolstering trust, tech companies can both power and influence the future
of business.
The stakes for successful digital transformation execution are high across every sector. Business resilience
relies on technology, and the ability to adapt requires innovation and insight. The technology industry’s
influence on the future of business and our economy has never been greater, but to capitalize on this new
demand, it’s critical that tech companies invest in key areas like experience, reliability and trust to ensure
they can deliver.
AFTAB JAMIL
National Co-leader of BDO’s Technology Practice
*A detailed description of the study methodology is included in the Methodology Overview.
2021 TECHNOLOGY DIGITAL TRANSFORMATION SURVEY 3
Tech Fast-Tracks Digital Transformation
Digital innovation is at the core of most technology companies’ DNA, but the shift in demand in 2020 accelerated short- and long-term priorities and brought new priorities
to the forefront. Plans created pre-pandemic no longer reflect the market needs, and as a result, many tech companies went back to the drawing board.
HOW 2020 HAS IMPACTED DIGITAL TRANSFORMATION
67% 57% 41% 40%
Revising long-term strategic vision Adding new digital projects Accelerating some or all existing plans Putting some or all existing plans
on the back burner
80%
plan to increase spending on digital investments in
the next 12 months
1 in 4 by 10%
or more
2021 TECHNOLOGY DIGITAL TRANSFORMATION SURVEY 4
SPENDING AND STRATEGIC INVESTMENTS ARE EVIDENTLY PAYING OFF
89%
of technology leaders have seen their existing digital
transformation initiatives as successful to date
73%
expect revenue to increase as a result
of digital investments
70%
expect profitability to increase
as well—with 33% predicting
increases of 10% or more
BDO INSIGHT
Accelerating the pace of digital transformation means nothing if solid plans are not in place. Considering not only the investment in digital capabilities, but looking beyond
to adoption by employees and customers, assimilation into company culture and integration into processes is crucial to ensuring a successful implementation. Are senior
leaders on board? Are employees aware of how these changes will impact them? Are you able to communicate how digital will add long-term value for the company
and customers? Just as the digital transformation process must be ongoing in order to remain apace of changes to the landscape, the onboarding and education process
should continue alongside it to be a concurrent priority.
2021 TECHNOLOGY DIGITAL TRANSFORMATION SURVEY 5
Prioritizing the Customer Experience in a Changing Environment
Customer needs are changing and consistently expanding—high levels of speed, reliability and consistency are expected, and patience for outages is at an all-time low. In order
to meet—and hopefully exceed—these expectations, tech leaders are prioritizing upgrading the customer experience to retain current customers and edge out the ever-growing
competition for new ones. In many cases, this means adding or expanding services, including cloud computing, collaboration tools, contactless options and more.
59%
will introduce a new
digital revenue stream
in the next 12 months
#1 cited digital priority
= Improving customer
experience
55%
will expand into new markets
or customer segments in the
next 12 months
2021 TECHNOLOGY DIGITAL TRANSFORMATION SURVEY 6
HIGH RISK, HIGH REWARD
1 in 5 87% Only 6%
respondents say say that digitization of of respondents say
poor customer customer service and that outstanding
experience is their customer experience customer service
biggest digital will have some or was their company’s
threat this year significant impact primary competitive
on their business in differentiator
the next year
BDO INSIGHT
The customer experience is continuously evolving as needs and expectations
change over time. Technology organizations are in a unique position
given that the industry is generally at the forefront of innovation, leaving
customers with less patience for outdated products and interfaces. With this
in mind, tech leaders must continue to transform and modernize how they
interact with customers alongside their upgraded products and services.
Customer experience is about more than products—it is about people.
Designing solutions with the user in mind, then investing in training and
guiding employees to provide excellent service whether upon delivery
or when troubleshooting, is critical. Any friction in the customer journey
or experience creates an opportunity for a competitor to capitalize.
2021 TECHNOLOGY DIGITAL TRANSFORMATION SURVEY 7
Optimizing Product & Process for Enhanced Reliability
Digital transformation isn’t just about investing in new solutions—it is also about surveying the current state of affairs at an organization and evaluating how operations
and processes can be improved. As demand for technology products and services increases, so in turn does the pressure to deliver. In order to make sure they are up to the task,
technology companies are turning an eye inward and reviewing potential weak spots in their operations. Inefficiency or ineffectiveness means lost opportunity and revenue
and must be addressed in the year ahead.
39% 17% Upgrading is key for long-term digital success—an organization won’t be able to innovate
and scale on legacy technology if it doesn’t meet the business’s current or future needs.
36% of respondents identified interoperability with legacy technology & processes
as the reason digital initiatives underperform
say most 2021 R&D say most R&D
investments are aimed at investments are aimed at
improving or enhancing improving or enhancing
existing products internal processes
More than 1 in 5 respondents say that optimizing business processes
and driving operational efficiencies across the supply chain was their
#1 most important digital priority, second only to CX
2021 TECHNOLOGY DIGITAL TRANSFORMATION SURVEY 8
SPOTLIGHT ON SUPPLY CHAIN
BDO INSIGHT
After a year where weaknesses became painfully
clear, upgrading the supply chain for increased agility Supply chains have been under scrutiny recently, after shutdowns, shortages and surges left many
is in the spotlight. organizations finding their current strategy wanting. As companies look to de-risk and optimize value
in their supply chain, access, reliability and even redundancy and back-up options will be in focus.
Technology enhancements to the supply chain—from IoT to data analytics—can help tech companies
51% have greater visibility into their current and future needs, allowing for better and faster decision
of tech companies making when it’s time to pivot. This can be a key competitive advantage whether customers are in
say stakeholders have more times of relative calm or crisis.
trust in supply chain than
the year prior
31%
of tech companies
say they have less trust
Digitizing the supply chain is on the agenda:
50% planning to adopt
43% already adopted
2021 TECHNOLOGY DIGITAL TRANSFORMATION SURVEY 9
Innovating With Trust… or Bust
Security and privacy have been top of mind for technology organizations in recent years as they work to ensure that customer and proprietary information is both safe and
properly used. Amid disruptions brought on by COVID-19, trust has become both more important and more challenging to achieve. From the shift to remote work, to the surge
in digital transactions and information sharing in the cloud, tech companies are on alert.
TRUST TRACKS UPWARD, BUT THREATS LINGER
#1 Cyberattacks or privacy breaches are the #1 digital threat LEVEL OF TRUST IN MORE LESS SAME
Cybersecurity 57% 24% 19%
33% say cybersecurity and compliance is the biggest challenge Data Privacy 61% 27% 12%
33% they faced in the last 12 months
of respondents say that cybersecurity and data privacy risks
37% was their top IT resilience challenge
STRONG SECURITY MEASURES REMAIN IN PLACE
83% 78% 77% 66%
use security analytics use data encryption use managed security services use continuous threat monitoring
2021 TECHNOLOGY DIGITAL TRANSFORMATION SURVEY 10BDO INSIGHT
Data privacy and cybersecurity have always been both an area of opportunity
and risk for technology companies. With new regulations in the data privacy Privacy and trust are critically linked. Building a world class technology
space still expected, security tools and privacy protocols will be necessary to company with a best-in-class customer experience means building
ensure compliance and get ahead of bad actors looking to harvest information— privacy and protection into the product or solution. With many tech
especially in light of the SolarWinds hack early last year. While it’s not possible companies now leading the conversation on the push for more guardrails
to predict every threat, building a culture of resilience requires being agile and and guidance around privacy, it’s also more critical to reputation than ever
responsive to emerging risks. By investing in security and privacy, tech leaders that they hold themselves to these same high standards.
will ensure that they retain the hard-earned and easily lost trust of customers,
as well as the assurance that their own operations are secure. DOUG HART
National Co-Leader of BDO’s
Technology Practice
2021 TECHNOLOGY DIGITAL TRANSFORMATION SURVEY 11Conclusion
Technology companies are well-positioned when it comes to digital transformation.
While organizations and leaders within the space look to undergo their own
transformations, they are also in turn upgrading operations in a way that impacts
the digital journeys and opportunities of their customers. As demand continues,
so will scrutiny, and leaders must be prepared to ensure their plans and protocols
can meet the moment.
Technology leaders should focus on building the right technology infrastructure to
meet increased customer needs, improving reliability and consistency and upgrading
security, all to power their businesses forward for better growth.
Though digital transformation is a complex undertaking, the return on investment
is clearer than ever before. A rising tide lifts all ships. Tech is the tide, our economy
the ships.
To benchmark your digital maturity and transformation
readiness against your peers, explore our 2021
Technology Digital Transformation Survey
Benchmarking Report ⊲
For a personalized evaluation of
your organization’s maturity level
and opportunities, sign up to receive
our Digital Performance Indicator.
SIGN UP NOW
Source for this and all subsequent graphs: Data analyzed from S&P Global’s Capital IQ database. Retail - Online: 9.6%
2021 TECHNOLOGY DIGITAL TRANSFORMATION SURVEY 12About BDO’s 2021 Technology Digital Transformation Survey
The 2021 Technology Digital Transformation Survey was conducted by Rabin Research Company, an independent marketing research firm, in January 2021.
The survey included 100 C-level executives at technology companies with annual revenues between $100 million and $3 billion.
WHO WE SURVEYED
17% 5% 32% 10%
$2 billion to $100 million to Chief Technology CEO
$3 billion $250 million Officer or Chief
Innovation Officer
18% 7%
$1 billion to just CFO
under $2 billion
ANNUAL EXECUTIVE
REVENUES TITLES
14%
COO
30%
$251 million to
$500 million
9%
CMO
14% 16% 24% 4%
Chief Information Officer Line of Business Executive
$751 million to just $501 million to
or Chief Information
under $1 billion $750 million
Security Officer
2021 TECHNOLOGY DIGITAL TRANSFORMATION SURVEY 13Contacts
AFTAB JAMIL MAURICE LIDDELL
Assurance Partner and Global Technology Practice Leader Principal and BDO Digital Technology Leader
ajamil@bdo.com mliddell@bdo.com
DOUG HART HANK GALLIGAN
Assurance Partner and National Technology Practice Co-Leader Assurance Partner
dhart@bdo.com hgalligan@bdo.com
MARK ANDERSEN KRIS KAUFMANN
Assurance Partner Assurance Partner
mandersen@bdo.com kkaufmann@bdo.com
OCTAVIO DOSSI NETO BRYAN LORELLO
Assurance Partner Assurance Partner
odossineto@bdo.com blorello@bdo.com
DEMETRIOS FRANGISKATOS DAVID YASUKOCHI
Assurance Regional Managing Partner Tax Partner
dfrangiskatos@bdo.com dyasukochi@bdo.com
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