Learn why companies are focused on digital transformation strategy as key to future growth.

As the underpinning enabler of their digital transformation strategy, technology has been the big lever for most, if not all, companies. But with today’s unprecedented waves of technological innovation, companies are becoming increasingly pressured by competition on multiple fronts.

And the ultimate prize they are battling over is the customer. Empowered customers in today’s markets are setting the agenda for technology investment as executives adapt to meet ever-changing demands.

Competition and customers at the forefront of corporate digital transformation strategy; technology is both an enabler and a threat

Barriers to entry are changing across many industries. Companies need to understand the ecosystem of their industry landscape in order to determine their best route forward. They may need to partner with others in order to offset these threats.

Technology has lowered initial barriers to entry for many upstart businesses. However, after reaching a certain point of maturity — when brand, talent and geographical footprint become more significant drivers — there are barriers that still exist.

The EY Global Capital Confidence Barometer  found that respondents had many major digital transformation impacts on their companies or industries.

Investing tilts toward digital: increasing allocation to technology-driven transformation is the key to future growth

More than half of respondents are allocating between 25% and 50% of their investment capital to their digital future. Their focus is more on generating future growth opportunities than internal efficiencies. This trend cuts across sectors and geographies, with digital now part of the DNA for all companies.

In-house technology investment is now a lower priority

The unrelenting pace of innovation in technology is changing the buy vs build discussion. While a minority of companies plan to invest internally, the clear majority are looking outside their company for future opportunities.

Companies are also using a range of options to surface investment ideas. Direct acquisitions and joint ventures and alliances are still popular. But companies are increasingly using corporate venture funds and external funds to invest across a range of new technologies. This offers more optionality and provides a range of potential digital futures.