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What are the goals, drivers, and obstacles to digital innovation?

In the first of our blog series on digital innovation, we reveal the results of a PAC survey of executives from large European companies

November 25 2022Karsten Leclerque

What are the goals of innovation?

What makes decision-makers invest in transformation and innovation, even in uncertain times? The pandemic showed the growing importance of digitization: companies with highly digitized business models could better adapt to the crisis, whereas more traditional organizations were compelled to transform themselves quickly in a difficult economic environment. Today, more than ever, organizations are aware that they must become more resilient, agile, responsible, sustainable, customer- and employee-centric, and efficient. 

What are the drivers of innovation?


Most survey participants consider digital innovation as a way to improve existing processes or products, the interaction with the ecosystem, or their business operations.

Improving customer experience

When it comes to digital strategies, customer experience (CX) remains a major goal for organizations. Given a steadily growing number of contact points, some of which are beyond their influence, organizations need the ability to sustain a consistent CX across all touchpoints to meet their customers’ expectations. And CX is no longer the sole domain of B2C; in B2B markets, it is gaining importance. Similarly, in the public sector, the development of digital services is very much 'customer‘ experience-driven.

While customer insights have always been important, new approaches focus on qualitative alongside quantitative aspects. Insights into current and forecasted customer preferences and their use of products and services, brand perception, and satisfaction with customer service, for instance, are required. 

Making better use of data

Businessman holding tablet with virtual icons hovering over screen.

Unlocking the value of data has been a central goal for organizations’ digital strategies. Not surprisingly, valid and trusted data is at the heart of any digital transformation. It forms an essential basis for many innovation areas, be it the Internet of Things (IoT), artificial intelligence (AI), or sustainability.

Increasing resilience

Resilience has been a significant objective for organizations since the pandemic; broken supply chains and energy crises have shown the vulnerability arising from unpredictability. Given the drastic and unexpected challenges, organizations' top priorities are more transparent and resilient supply chains and increased agility and flexibility. Because of highly uncertain future developments, they remain important targets for strategic initiatives.

The need to protect the digital supply chain, products, data, and working streams against internal and external attacks has become a matter of course for most companies. Our study reflected the high importance of cybersecurity-related goals. Even if cybersecurity is usually considered as less differentiating compared to, for example, customer experience, it is seen as a 'must-have‘ investment.

Digital projects are also strongly focused on efficiency goals related to internal processes. Increased automation not only helps increase efficiency and reduce failure rates; it fights the omnipresent skills shortage.

Some highlights from the PAC study


The percentage of survey participants who said that moving projects from an experimental or proof of concept stage into production is an issue.1


The percentage of survey participants who said that more efficient use of data is a central goal of their digital innovation strategy. 1


The percentage of those surveyed who have concerns with performance, availability (or both) when deploying new technologies. 1

  • 1 

    A survey conducted in August and September 2022 among large European companies with over 5,000 employees from various industry sectors, with headquarters in the DACH region. Interviewed roles were members of the general management board, IT decision makers, Chief Digital or Innovation Officers, line-of-business managers, or similar positions.

Environmental, Social, and Governance (ESG)

Diagram Digitale Innvation

Under economic, societal, and regulatory pressures, corporate social responsibility and ecological sustainability are organizations‘ must-have investment areas.  But while relatively few say these topics are not targets at all, it seems that investments are not yet associated with 'innovation” to the extent one would expect.

This lack of association with investment and innovation is surprising. New technologies support sustainability-related issues in many ways and often go hand in hand with innovation targets, like supply chain transparency, efficiency, or better use of data. However, ESG was not among the most-mentioned areas where digital innovation plays a central role.

Who drives innovation?

In line with the mentioned major goals of digital strategies, the importance of innovation is considered much higher in areas like customer service and support. Also, for goals like reduced failures, better quality products and services, more transparent and resilient supply chains, and increased efficiency, digital innovation plays a significant role in services or finished products, production and operations processes, supply chain management, and logistics.

The IT department was mentioned frequently as an important driver of innovation. But even if the IT department is undoubtedly an enabler of most digitization projects, and indeed often a driver, one should consider that almost half of the experts surveyed are IT decision-makers and might not be entirely objective in this matter.

In contrast to customer-centric investments, improved employee experience was not among the most targeted goals of innovation, which is surprising given the omnipresent skill shortage. However, in almost 75% of the organizations surveyed, digital innovation in areas like the workplace, collaboration, or training is a central or important goal.

What hampers digital innovation?

Deployment of new technologies Diagram

Generally, the potential of further digitization is hardly questioned. When asked about hampering factors for digital innovation, only a minority of the participants complained of a missing digital business model or the lack of a convincing business case. And a lack of management support, organizational obstacles, or unrealistic stakeholder expectations – although certainly seen as a problem by some participants – were not among the most-mentioned concerns or challenges. Also, those questioned seemed confident that costs and the potentially increased complexity of digital initiatives can be managed.

But various factors hamper the broader adoption of new technologies and digital strategies:

Wrapping up

'Never change a running system‘ still seems to be common wisdom. When deploying new technologies, almost 90% of the participants have major or minor concerns about performance or availability (or both).

Regarding comprehensive transformation, security and compliance issues have always been among the biggest sticking points; 46% consider them a major concern. And when commencing innovation projects, going live at scale is seen as a considerable challenge. Nearly 90% of the decision-makers surveyed complained that moving projects out of the experimental or proof of concept stage and into production is an issue and almost 50% a major issue.

An omnipresent skills shortage in IT areas like cloud, AI, or data science - and related business lines - has recently been among the most complained about issue, and the most important limiting factor regarding wider innovation and transformation approaches.

Last, the difficult economic environment and uncertainty over future developments are clearly considered a challenge. While the Covid-19 pandemic has accelerated digital transformation, the current highly uncertain negative economic outlook might lead to generally more cautious investment behaviors, which will impact digital strategies.

About the author
Karsten Leclerque

Karsten Leclerque

Head of Infrastructure & Cloud Services Practice , PAC

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