Respondents to the Baker McKenzie 2020/2021 Digital Transformation & Cloud Survey were more focused on realizing the commercial benefits of their digital transformation (DT) programs than a year ago, moving from agility as the leading benefit previously, to protection, cost savings and efficiencies (69%) this year.
The research revealed that despite the pandemic, DT efforts continue to mature and increasingly pay dividends for companies, with much of this activity tied back to data management.
Technology investment priorities
"In 2020, 58% of digital leaders said that COVID-19 had accelerated their plans for DT and cloud — with investments in cybersecurity, talent and customer insight. One year on, the latest data shows DT has evolved from an urgent effort to a permanent part of the enterprise — with organisations launching and scaling DT activities and tackling cybersecurity as a priority," said Adam Aft, global co-lead, technology transactions, Baker McKenzie.
The top three areas of digital investment by companies globally currently are related to storing, mining/monetising, and securing data – cloud computing (85%), artificial intelligence (AI) and machine learning (80%) and cybersecurity (71%).
AI has also risen to importance with 43% of respondents acknowledging it as core to their DT efforts, from only 14% in 2020.
However, there remain lingering concerns around data privacy and cybersecurity, with a focus on cloud contracts that allow organisations seeking to create value from cloud data to bake in appropriate protections upfront.
Build or buy
Organisations are reasonably evenly split on the buy or build question, with 28% opting for on-boarding off-the-shelf tech solutions, 29% building their own, and 43% adopting a mix of both.
Legal and regulatory pressure
The report noted that legal and regulatory frameworks governing the digital transformation space continue to evolve, but the pace of technological adaptation will only accelerate as organisations follow through on their plans to implement more sophisticated technology as part of their digital transformation journey (blockchain, predictive analytics, AI, etc.).
Organisations that have found the most success in navigating the overlap of emerging tech and evolving legal frameworks are those with strong collaboration between the commercial and legal teams across functions within the enterprise.
It has proved crucial to stay up to date with the latest legal and regulatory developments in a variety of jurisdictions.
According to Isabella Liu, Asia Pacific head of intellectual property and technology (Hong Kong): "The report finds organisations gearing up for continued evolution in their digitalization efforts. Future priorities reflect various aspects of enterprise strategy, from security and efficiency to new revenue streams and customer and employee experience. Future investment priorities centre on communication (5G), customer engagement (e-commerce) and remote work.
According to the report, while leaders understand that the next evolution of digital transformation is not without legal and commercial risk, progress will depend on how successfully organisations are able to balance value creation and risk mitigation, evolve governance to manage new technology, and address an evolving legal and regulatory landscape.