Digital Transformation Leapfrogs to Top of Enterprise Agenda As Pandemic Makes Tech a Lifeline for Workers and New Offerings

2021 will be a year of experimentation and adaptation for CIOs and their technology organizations, driven by the ongoing needs of the pandemic and a dramatic increase in enterprise focus on digital transformation, according to 2021 IT Key Issues Research from The Hackett Group, Inc. (NASDAQ: HCKT).

The full research, “2021 CIO Agenda: 10 Key Issues IT Needs to Act on Now,” is available on a complimentary basis, with registration, at this link: https://www.thehackettgroup.com/2021-it-key-issues-2012/. Key findings from the research include:

A Year of Experimentation and Adaptation, Guided by IT as a Strategic Partner – As a result of the pandemic, IT had to shift overnight from its historical role of being an administrator, gatekeeper and developer of technology. IT became the lifeline that kept workers productive and helped operations implement or expand digital service and product delivery. For 2021, technology organizations must improve their ability to act as a strategic partner to the business as they guide companies through a year of experimentation and adaptation, while they help the business prepare for post-pandemic environment. The focus will be on improving resiliency and enhancing stability while accelerating technology-enabled innovation. Some common IT focal points are: process automation to eliminate manual dependencies and bottlenecks; risk reduction through use of third-party ecosystem and backup sourcing; touchless customer contact points for ordering and delivery; and remote worker collaboration and creative tools (Page 5). All of these capabilities, implemented during a crisis, will be industrialized and made permanent in 2021 and beyond.

Digital Transformation a Key Enterprise Priority and an IT Challenge – Digital transformation leapfrogged to the top of the enterprise priority ranking in 2021. After going through an accelerated digital learning curve during the crisis, companies plan to capitalize on the lessons learned and will rely on technology organizations to guide them. The biggest ramp-up in 2021 will be an accelerated migration to cloud-based applications to increase resiliency and better enable remote work, with 25% growth expected. But because IT has long neglected digitization of its own processes, it is at risk of failing as a transformational partner. Eighty percent of technology organizations have invested less than two years in their function’s transformation, and 35% have less than a year of effort under their belts. IT must address its own digital modernization if it is to be successful in achieving enterprise objectives (Pages 8, 10, 11, 13).

Shift Towards Virtual Work – Pre-crisis, only 4% of G&A staff worked from home. Post-crisis, 25% are expected to, with another 33% working a hybrid schedule between home and office. Remote work is a game-changer for both technology organizations and the enterprise, enabling companies to hire talent virtually anywhere. But it brings with it issues relating to management, leadership, and how to best drive innovation (Page 3). 2021 will begin the optimization and refinement of the remote / hybrid work model across many organizations.

Aligning Skills and Talent with Changing Business Needs is Critical – The pandemic has dramatically changed the workforce model for technology organizations, with 59% of IT employees expected to work from home or in a hybrid home/office rotation once the crisis ends, an increase of nearly 4x compared to pre-pandemic. The study identified critical skills gaps in areas that include change leadership, strategic thinking and analysis, and customer-centric design which must be overcome, as they are fundamental enablers of IT’s ability to act as a strategic partner (Page 6, 7).

Bridging the IT Productivity and Efficiency Gap will be Challenging – The demands on technology organizations are expected to continue to rise, with workload increasing by 6.8% in 2021 as IT leaders anticipate negligible increases in operating budgets and staffing. This may hamper IT’s practical ability to deliver (Page 7).

Securing Data and Systems Remains the Top Priority – The vastly expanded remote workforce as a result of the pandemic has made security, always important, more critical than ever, and security remains the top IT priority for 2021. Technology organizations must bullet-harden the work-from-home environment and help educate workers to avoid risky behaviors (Page 4).

Continued Instability Expected – All this must happen in the context of continued business instability. A total of 41% of survey respondents expect business conditions will stabilize by Q2 2021, but 36% believe it will take longer. (Page 3).

The Hackett Group’s 2021 Key Issues research is based on results gathered from nearly 300 executives in finance, HR, IT, procurement, supply chain, and global business services at a global set of midsized and large enterprises.

About The Hackett Group

The Hackett Group (NASDAQ: HCKT) is an intellectual property-based strategic consultancy and leading enterprise benchmarking firm to global companies, offering digital transformation including implementation of leading enterprise cloud applications, workflow automation and analytics that enable digital world class performance.

Drawing from our unparalleled IP from nearly 20,000 benchmark studies with the world’s leading businesses – including 93% of the Dow Jones Industrials, 91% of the Fortune 100, 80% of the DAX 30 and 55% of the FTSE 100 – captured through our leading benchmarking platform, Quantum Leap^®, and our Digital Transformation Platform (DTP), we accelerate best practices implementations.

More information on The Hackett Group is available at: www.thehackettgroup.com, info@thehackettgroup.com, or by calling (770) 225-3600.

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