Study: Most Digital Projects Fall Short of ROI
LOS ANGELES — A white paper recently released by the Genpact Research Institute found that of $593 billion spent on digital projects $394 billion of it was invested in projects that fall short of expectations and returns on investment.
The paper, titled "Putting Digital to Work: The Lean Digital Way," emphasized that much of what companies invest in technology sustains "legacy" systems rather than new technology.
“While this is an approximation, it is close enough to give CEOs pause — and the figure doesn’t even include the opportunity cost of business benefits that will not accrue to enterprises because of those less-than-effective efforts. These are unacceptable numbers,” researchers said.
Genpact said that established companies experience a high proportion of digital transformation failures.
“In many cases, most of their efforts are directed towards the transformation of the front end of the user interfaces with clients,” the paper said.
“Agile and lean-startup practices have in common their ability to cope and even thrive in hyper-competitive, dynamic markets with a high-speed rate of technological change. Both have well served digitally native startups leaders, who can now run experiments – not just traditional pilots – much faster and more cost effectively.”