Modernize or Fall Behind: Key Insights from A Forrester Study

The digital landscape is evolving at a rapid pace, and businesses across industries are facing an urgent imperative: modernize or risk becoming obsolete. Yet, the complexities of digital transformation, paired with cultural challenges, are hindering progress for many organizations.?

This newsletter highlights the key findings from a Forrester Consulting study, which surveyed 546 IT and business decision-makers from industries including energy, utilities, financial services, retail, transportation, and logistics.?

These insights shed light on the challenges, and modernization approaches that can help organizations stay competitive and drive business impact.?

Why Digital Modernization Matters??

Industry leaders understand that the future is digital. Customers expect seamless experiences, while employees crave flexible work environments. Forrester's research shows that over 80% of businesses prioritize enhancing IT capabilities to improve customer experience (CX). Yet, many struggle to keep up with the rapid pace of technological and cultural change.?

Modern techniques like cloud-native technologies, automation, and predictive analytics are helping companies accelerate their innovation. However, a staggering 56% of decision-makers say their organizations have not built effective digital platforms for customer engagement.?

The below statistics highlight the pressing need for digital modernization across various sectors:?

• 45% of utility companies view digital transformation as their top priority over the next year.?

• 59% of environmental services firms struggle to develop new digital capabilities for existing offerings.?

• 47% of retailers face increased silos that hinder modernization.?

• 62% of logistics firms report significant challenges in building the necessary tools and skills for modernization.?

• 42% of financial institutions are eager to utilize emerging technologies for value creation.?

Source: Creating the Future of Digital Experiences with Strategic Modernization

Key Challenges Faced by Industry Leaders?

1. Cultural Inertia: The study reveals that while businesses are eager to adopt new technologies, cultural resistance within organizations remains a major challenge. Nearly half of respondents cited organizational silos and a lack of cross-functional collaboration as critical barriers to effective transformation. This not only limits agility but also slows down innovation and disrupts alignment with business goals.?

1. Lack of Focus on Employee Experience (EX): While customer experience (CX) is a focal point for most organizations, only 1 in 4 firms prioritize employee experience. This disconnect can impact productivity and the successful adoption of new tools and technologies. Organizations that create a positive and collaborative work environment, fostering transparency and trust between leadership and employees, see greater success in modernization efforts.?

1. Integration Challenges: Many companies still rely on outdated, siloed application environments, hindering integration efforts. More than a third of respondents still use traditional transactional models, which limit scalability and long-term agility. Additionally, less than 15% have moved a significant portion of their integration flows to cloud-based platforms, slowing down the ability to adapt quickly to market changes.?

Forrester’s Recommendations for Strategic Modernization??

For companies aiming to modernize and remain competitive, the path forward requires a focus on agility, cultural alignment, and a balance between technology and human experience.

Industry leaders must take decisive action to:

• Invest in AI, automation, and predictive analytics to boost operational efficiency and innovation.?

• Foster a company culture that embraces collaboration, flexibility, and continuous learning.?

• Prioritize both customer and employee experiences to drive sustainable growth.?

Take Action: Start today by evaluating your current digital strategies and identifying areas for improvement. The future of your business is at stake, and now is the time to lead the charge toward transformation.?

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