Large scale technology transformation: Emerging trends for 2024

The rapid pace of technological development, combined with the need for digital transformation, navigating governance, achieving return on investments and being mindful of ESG commitments is posing challenges for many organisations. Digital transformation is critical, and 74 percent of business leaders think it is the single most important investment now and in the future that organisations can make to drive enterprise value.¹ To stay ahead, it is essential to identify and understand key trends and challenges in order to harness them for business advantage.

Top trends impacting large-scale technology transformation

 

A significant trend for organisations who want to enhance their digital capability is diversifying into new markets, requiring the creation of new business models, such as for banking and insurance. Organisations must explore new and innovative avenues for growth as technology will fundamentally transform (or disrupt) future business models, existing products and services and internal operations.² Another major trend is leveraging global tech supply chains for new skills or cost-efficiency, which is becoming increasingly important for competitiveness. More than half of successful international organisations include outsourcers in their delivery model, and 72 per cent have embraced digital transformation as a strategic agenda and 55 per cent have a single instance enterprise platform such as ERP³ or SAP/4HANA. Additionally, there is increased focus on financial planning and the need to maximise operational efficiency, decrease labour costs and leverage the use of data and insights. Organisations also need to manage technical debt to keep up with the introduction of new technology. There are tools out there to help, but it can be difficult to know which one will deliver the high productivity needed.⁴ Organisations often struggle to make the necessary investments in their infrastructure, data, applications, cyber and workforce capabilities in a way that could adapt to that future, despite chief information officers spending 10 to 20 per cent of their budgets on resolving issues related to outdated systems.⁵

The trend for data migration and generative AI are emerging as the greatest areas of growth. A staggering 80 per cent of global business leaders say generative AI will increase efficiencies in their business.⁶

To make the move, organisations will need to overcome the challenges to deliver at scale

 

To fully take advantage of generative AI or any of these trends, business leaders need to first understand the challenges facing their organisations. There are external factors that are impacting large scale technology transformations. Organisations are experiencing record redundancies due to the current economic climate and increased use of AI.⁷ The increased use of AI is also shifting investments, with the largest firms spending a combined $32 billion in just 3 months in 2023, with cloud-related spending set to increase even more in 2024.⁸ In the UK, the number of technology companies that incorporated increased by 22 per cent in 2022 with many regions seeing even greater growth.⁹ All of this points to the need better informed decisions using data, multi-disciplinary teams, including cross collaboration with external organisations to re-imagine customer and employee experiences

These key challenges disrupting large-scale technology transformations can be seen as opportunities for growth and innovation. By addressing these challenges head-on, organisations can emerge stronger and more resilient than ever before. From our experience these are the six key challenges facing organisations attempting large scale technology transformations, and their implications:

1. Resistance to change: Resistance to change comes in two forms; Organisational resistance – caused by traditional thinking and conflict of interests between different functions and Human resistance – transformations are uncomfortable and create uncertainty sparking employee resistance.
2. Strategy misalignment: Large-scale technology transformation often leads to significant organisational change, but organisations often overlook the importance of aligning the delivery with their overall strategy. Instead, they tend to operate on silos, resulting in a misalignment with the organisation’s overall strategy.
3. Delivery – Programme control: In order to achieve successful delivery, it is crucial to establish the correct governance, structure, and programme management. This requires finding the appropriate balance between pace, tools, and methodology, particularly when delivering large-scale technology transformation.
4. Budget management and constraints: The cost implications of large-scale technology transformations are significant and are often underestimated, highlighting the need for more effective estimation and management.
5. Lack of data insights: An effective data analysis and insights function can enable organisations to pivot from reactive to proactive decision-making, allowing them to anticipate and respond to changes in the market. This can lead to benefits such as the ability to forecast future trends, simulate different scenarios, and re-strategise the overarching roadmap as new insights become available.
   
6. Resourcing and capability: Large-scale technology transformations are complex and volatile, requiring the right expertise to ensure success. Here needs to be collaboration to foster alignment between the strategy and business model. However, a talent gap can slow down the transformation process and in extreme cases cause it to fail.

Key principles to navigate challenges of large-scale technology transformation

 

These challenges can be addressed by applying our four guiding principles to be important when navigating large-scale technology transformations. The first principle in transformational delivery to achieve both the operational and technological business growth. Readiness for change should be regularly reviewed throughout the programme with the end goal in mind. The second principle is to set up for success by having early leadership engagement and support. Leaders need to champion the transformation. Put in place a transformation director who can bring the technology and business elements together to improve several integration, data and functional challenges and to increase the level of business engagement and enthusiasm on a multi-year programme. The third principle is to know your goal by having a clear understanding of where the transformation will take your organisation. The importance of having a transformation strategy cannot be overstated, yet 31 per cent of UK business and technology leaders say their organisations do not have a strategy in place.¹⁰ The fourth and final principle is to have a flexible resource request mechanism. It is important to ensure that skilled teams are available throughout the programme at different stages of the delivery. Establish teams can upskill and transfer knowledge, with the need to flex and agree upfront. The culture in programme teams should be incorporated into the business-as-usual teams, to ensure everyone is aligned to the transformation. These guiding principles form the basis for Deloitte’s approach to large-scale transformations with a continuous strategy and delivery model that scans the horizon, assesses and evaluates outcomes to ensure the transformation can be delivered.

Harness the power of Next Gen Delivery^®

 

Navigating these challenges requires strategic thinking to harness the business outcomes at pace while focusing on value.

Deloitte’s approach is a next generation delivery framework designed to create the conditions for success for the world’s largest complex programmes. Drawing on the outcome-focused team structure and systems used in Formula 1, the framework brings together strategy and business transformation.

The benefits ofour delivery approach for large-scale technology transformation is that it combines new thinking and technologies with best-in-class established programmatic disciplines to create a forward-looking, data-driven delivery capability. Intelligence-led decision making is at its heart, helping to significantly reduce risk and support the dynamics required to deliver at pace.

Deloitte Major Programmes and Cross Industry

 

In Cross-Industry, we are dedicated to leveraging our diverse experiences and collaborate with various industries, capabilities, and technologies to drive innovation and deliver evolving programmes that meet new challenges.

Key contacts

 

If you would like to understand more about the insights provided or how we could support you across your organisation, please contact the team below.

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References

 

¹ Measuring value from digital transformation – Metrics that matter, Deloitte, 2023.

² Core workout: From technical debt to technical wellness. Deloitte Insights, Tech Trends 2024.

³ Supply Chain and GBS: Leveraging hybrid delivery models. Deloitte Development LLC, 2022.

⁴ 20 Issues Tech Companies are Facing Now (And How To Address Them). Forbes, 2023.

⁵ Stefan Van Der Zijden, Howard Dodd, Anne Thomas, Tigran Egiazarov, “How to Priorit and Sell Technical Debt Remediation,” Gartner Research, September 27, 2023; Adam Tornhill, Business costs of technical debt, CodeScene, 2023.

⁶ Genie out of the bottle: Generative AI as growth catalyst. Deloitte Insights, Tech Trends 2024.

⁷ Tech companies that have made layoffs in 2024. Tech Co, 2024.

⁸ Tech giants pour billions into cloud capacity in AI push. Financial Times, 2023.

⁹ UK tech incorporations boomed last year – up 22%. RSM, 2023.

¹⁰ Optimism isn’t enough: UK struggles to realise value from digital transformation, Deloitte UK, 2023.