• 38 per cent rank lack of stakeholder support among their greatest challenges
• Four in five business leaders will prioritise investment in people to deliver digital strategy
• This is ahead of investment in new technology, at 71 per cent
• 70 per cent of organisations will invest in the cloud next year, but only 20 per cent are investing in data integration

London 12 Feb 2019 – Research commissioned by KCOM, the IT services provider, has revealed that despite considerable enthusiasm to innovate, organisations are being thwarted by tight resources and strong internal resistance.

The findings show that a lack of senior stakeholder support is the greatest inhibitor of change, followed closely by budget and a lack of specialist skills. Each appeared in the top three challenges, highlighted by 38 per cent, 35 per cent and 34 per cent of respondents respectively. However, organisations are also limiting themselves by turning away the specialist skills and experience that could help them advance, through overly predictive procurement processes.

The survey captured the opinions of 250 business leaders and C-level decision makers – including CEOs and CTOs – in government, financial services, retail, healthcare, and transport and logistics.

The year of the cloud

Eager to be more competitive, organisations are making big investments in innovation projects. Almost half (43 per cent) consider driving digital transformation to improve competitive advantage to be their top priority in the next year. A further 32 per cent are allocating at least 20 per cent of their IT budget to new projects.

When it comes to innovation, organisations are overwhelmingly looking to the cloud. Almost three quarters of businesses plan to invest in cloud migration (70 per cent) and the implementation of cloud native applications (68 per cent) in the next twelve months. This is followed by efforts to increase data security, with 65 per cent intending to invest in improving identity management services.

By contrast, only 20 per cent will invest in integrating data across systems to improve business flow and customer view.

Both public and private sector organisations are also taking an increasingly people-centric approach to digital transformation. In the next year, 80 per cent said they would incentivise staff retention through training, accreditation and career development to deliver on their innovation strategy. This is compared to 71 per cent who said they would do so by investing in new technologies.

Limiting the possible

However, the survey also found that organisations are constrained in what they can achieve. A range of organisational factors are preventing them from identifying the problems they face as well as the solutions they need.

For instance, companies have to contend with the high chance of failure when innovating. Willingness to fail is essential to the success of new projects. Fortunately, the majority either embrace failure if it is recognised early enough to limit costs (46 per cent) or see it as a natural part of innovation (10 per cent).

However, the definition of ‘failure’ depends on the industry. Over two in five (44 per cent) of those in health and social care view late delivery as failure, whereas only a fifth (20 per cent) of those in financial services feel the same way. More than 72 per cent of the total respondents define a project that comes in over budget as a failure. This is compared to nearly half (45 per cent) who define it as a failure to achieve the original designated outcome.

While the definition of failure may differ across industries, it’s comforting to see that whatever the failure, companies are willing to embrace it. Only 28 per cent regard failure as frowned upon or career-limiting and, for these organisations, this attitude is highly likely to stifle innovation. Yet for the majority, failure is embraced as step towards innovation.

Stephen Long OBE MD at KCOM Enterprise, said: “It is positive to see that organisations are embracing cloud technology as the path to innovation, and they recognise some of the challenges holding them back. However, too many are stopped from giving their all to innovation projects by fear of failure.

Innovation, by its very nature, involves pushing the boundaries of what is known and understood. Organisations must accept that failure plays an important role in doing this. Only by obeying Samuel Beckett’s dictum to ‘Try again. Fail again. Fail better’ can companies truly unlock the value of the cloud and new ways of working.

Fortune favours the bold, so companies need to prepare to fail, and build in a fast failure stage into all their innovation projects.”

To read the full report, Clearing the path for innovation, click here

Additional coverage

Digitalisation World: Innovation constrained by lack of support, budget and skills

Workplace Insight: Organisational innovation being stymied by lack of senior support

CRN: Cloud migration a ‘key priority’ for most businesses – research

Computer Weekly: Digital project failure still off the menu

Fresh Business Thinking: Innovation constrained by lack of support, budget and skills

Information Age: The innovation tightrope hindered by lack of support, budget and skills

Microscope: Fear of failure a digital transformation barrier

Data IQ: Innovation held back by lack of support, budget and skills  

Enterprise CIO: How enterprise innovation is being stifled by lack of skills, support – and a fear of failure

Intelligent CIO: KCOM reveals innovation prevented by lack of support, budget and skills