Businesses Face a Digital Ceiling in Their Transformation Progress, Infosys Digital Radar Reveals

Davos, Switzerland (ots/PRNewswire) - - Infosys Digital Radar 2020 finds that
few companies have progressed to the most advanced stages of digital
transformation this year

- Companies that centre their transformation initiatives around employeesachieve
the highest levels of digital maturity

- Top performers also approach transformation as series of rapid-feedback loops,
rather than a long, linear process

Businesses globally face a "digital ceiling" when it comes to digital
transformation, according to new research from Infosys Knowledge Institute (IKI)
(https://www.infosys.com/about/knowledge-institute.html), the thought leadership
and research arm of Infosys (http://www.infosys.com/) (NYSE: INFY), a global
leader in next-generation digital services and consulting. The study reveals
that businesses must change their mindsets to achieve sophisticated levels of
digital maturity.

Infosys Digital Radar 2020 assessed the digital transformation efforts of
companies on a Digital Maturity Index and found year-over-year progress in basic
areas, such as digital initiatives to improve a company's efficiency. However,
most companies come up against a "digital ceiling" when trying to achieve the
most advanced levels of maturity.

The report, which surveyed over 1,000 executives globally, ranked the most
digitally advanced companies as "Visionaries", followed by "Explorers" and then
"Watchers."

Companies know how to achieve moderate transformation success, with an 18 per
cent increase in companies progressing this year from the lowest tier of
Watchers to the middle Explorer tier. However, Explorers struggled to move into
the top Visionary cluster, with the top tier remaining the same, indicating a
"digital ceiling" to transformation efforts.

The Visionary cluster remains unchanged despite companies reporting fewer
barriers to digital transformation than last year. Human, rather than
technological, barriers are now the most persistent, with the two of the top
hurdles being the lack of talent or skills (34 per cent) and a risk-averse
corporate culture (35 per cent).

How to break through the digital ceiling?

The research demonstrates that top performers break through the digital ceiling
because they think differently.

Firstly, successful companies focus strongly on people, using digital
transformation to make improvements centred on customers and employees.

Most companies (68 per cent) across the spectrum stated operational efficiency
and increased productivity as a main transformation objective. But successful
companies in the Visionary cluster are particularly motivated to make
improvements for their employees. Nearly half of Visionaries describe
"empowering employees" as a major business objective for transformation,
compared with less than one third of Explorers and less than one fifth of
Watchers.

Likewise, Visionaries have an increased focus on customer centred initiatives,
being significantly more likely than other clusters to undertake transformation
to improve customer experiences and engagement and in order to respond more
quickly to customer needs.

Secondly, successful companies have a different mindset when it comes to
transformation processes.

Traditional linear transformations result in long transformation timelines,
meaning a company's improvements are out of date by the time the process is
complete. Instead, top performers demonstrate a cyclical mindset, implementing
recurring rapid feedback loops to accelerate transformation and keep updates
relevant. The Visionary cluster is far ahead of others in digital initiatives
tied to quick cycles: 75 per cent operate at scale in Agile and DevOps, compared
with an overall average of 34 per cent for the entire survey group.

Businesses overestimate tech barriers and underestimate the importance of a
company's mindset

The importance of culture and a cyclical transformation mindset to breaking
through the digital ceiling were underestimated by businesses last year.

In the 2019 Digital Radar report, companies were asked to predict the biggest
barriers to their transformation progress for the following year. This year's
Infosys Digital Radar 2020 compares these predictions to the actual challenges
businesses faced in 2019.

Businesses reported dramatic declines in the impact that technological barriers
have on their transformation progress, including:

- Inability to experiment quickly (down 49 per cent);
- Insufficient budget (down 40 per cent);
- Cybersecurity challenges (down 40 per cent).

However, businesses made much less progress against cultural barriers, including
lack of change management capabilities (down 7 per cent) and lack of talent
(down 6 per cent).

Progress across industries and geographies

- The technology and telecom industries continue to rank highest on
the Digital Maturity Index this year.
- Consumer packaged goods, logistics, and healthcare achieved strong
year-on-year improvements. The report's anecdotes from executive
interviews suggest that the adoption of telematics, the Internet of
Things and smart medical devices contributed to these increases.
Likewise, the automotive industry placed fourth by digital maturity
and featured the second highest percentage of Visionaries (30 per
cent of those surveyed).
- The insurance industry lags significantly behind other sectors,
featuring the highest percentage of Watchers (17 per cent).
- The digital ceiling was most dramatic in China, where 23 per cent
of companies moved from Watcher to Explorer (which rose from 64 per
cent to 87 per cent), but the percentage in the Visionary category
(8 per cent) remained the same.

Salil Parekh, CEO and MD at Infosys (http://www.infosys.com/), commented: "We've
seen enterprises successfully employ emerging technologies to optimise
productivity and efficiency, but struggle at the next stage of digital maturity.
Faster, better, and cheaper technology alone will not provide the improvements
enterprises need. Our research has shown that companies which can keep pace with
digital transformation are those that design digital initiatives to improve
customer experiences and empower their employees, differentiating themselves and
propelling their business to the most advanced levels of progress."

Jeff Kavanaugh, VP and Global Head at Infosys Knowledge Institute
(https://www.infosys.com/about/knowledge-institute/), commented: "This year's
Digital Radar research revealed significant progress across transformation
initiatives - however, traditional programme models are not keeping up with the
rapid pace of market change and companies face a distinct barrier in reaching
top levels of digital maturity.

"The most successful businesses in our survey have an employee focus and a
circular transformation mindset, which enable top performers to kick off a
virtuous cycle in the company. The result is a "living enterprise" that is
constantly sensing, improving, and attuned to its customers and employees. This
living enterprise is suited to serving a larger circle of stakeholders -
employees, customers, suppliers, local communities, and larger society - not
just shareholders."

For a full copy of the Infosys Digital Radar 2020, please visit:
https://www.infosys.com/navigate-your-next/research/digital-radar-report.html

Notes to Editors

Survey Methodology

From November 12 to 30, 2019, Infosys used a blind format to conduct an online
survey that attracted responses from more than 1,000 CXO and other senior-level
respondents from companies with revenue greater than US$1 Billion. Respondents
represented multiple industries and hailed from Australia, Canada, China,
France, Germany, India, New Zealand, U.K. and the U.S. To gain additional
qualitative insights, phone interviews were also conducted with a few
practitioners and subject matter experts.

About Infosys

Infosys is a global leader in next-generation digital services and consulting.
We enable clients in 46 countries to navigate their digital transformation. With
over three decades of experience in managing the systems and workings of global
enterprises, we expertly steer our clients through their digital journey. We do
it by enabling the enterprise with an AI-powered core that helps prioritize the
execution of change. We also empower the business with agile digital at scale to
deliver unprecedented levels of performance and customer delight. Our always-on
learning agenda drives their continuous improvement through building and
transferring digital skills, expertise, and ideas from our innovation ecosystem.

Visit www.infosys.com to see how Infosys (NYSE: INFY) can help your enterprise
navigate your next.

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