ISG Quantifies ROI of Digital Investments with New ISG Digital Value Assessment™ Service
Data show enterprises increasing revenue an average 5.6% and cutting operating expense an average 5.2% as a direct result of digital investments
STAMFORD, Connecticut, June 26, 2019 /PRNewswire/ -- Enterprises with digital transformation initiatives underway are reaping quantifiable benefits from their ongoing technology investments – growing revenues and cutting costs well in excess of 10 percent annually in some cases – according to new data released today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.
ISG's analysis, which reveals the financial and other business impacts of digital transformation, is generated by the ISG Digital Value Assessment™, a new service launched today that helps enterprise clients measure the return on their digital investments relative to other companies.
ISG's examination of more than 500 companies shows 97 percent are seeing revenue growth of 5.6 percent, on average, while 87 percent are cutting their operating expense an average of 5.2 percent as a direct result of their digital investments. The top quartile of organizations most effective at value realization are recognizing well over 10 percent annual revenue growth and well over 10 percent operating expense reduction from digital transformation.
The ISG Digital Value Assessment helps clients measure their specific digital value versus enterprise norms across three dimensions:
- Digital Capabilities at Enterprise Scale: Is the client adopting and scaling the right digital capabilities at the right pace?
- Investment: Is the client investing in digital at the right levels, and on the right capabilities?
- Digital Value: Is the client recognizing the expected value and returns from its digital investments?
The combined value of the three dimensions – based on ISG's custom analysis of more than 500 digital capabilities, investment measures and value metrics for each enterprise client – reveals the client's ISG Digital Progress Index™ score.
Through the application of proprietary algorithms and deep regression analytics across its vast pool of data, ISG now has the unique ability to predict the value potential from individual or groups of digital capabilities adopted by an enterprise at various levels of scale. ISG also can identify the groups of capabilities organizations should adopt, and the levels of investment required, to achieve specific value targets.
"Organizations are struggling to make critical business decisions due to a lack of comparative analytics and visibility into the effectiveness, pace of adoption and business impact of their digital transformation programs," said Shafqat Azim, partner, ISG Digital Strategy & Solutions. "More than 90 percent of Forbes 2000 CEOs have little or no confidence in their ability to measure digital investment results."
That lack of ability to measure digital ROI is the driving force behind the creation of the ISG Digital Value Assessment, Azim said. "We have created a multi-level, pragmatic and actionable model that helps enterprise clients measure and accelerate their digital business transformations and make informed investment decisions."
Based on ISG's analysis, Azim said enterprises seeing a higher-than-average annual increase in revenue from digital transformation "are regularly assessing the impact of automation on their employees, processing and analyzing IoT data streams, and co-creating digital products with customers and partners."
ISG's assessment of each client's comparative digital progress is aligned to the ISG Digital Cube™ a virtual, interactive model of the enterprise capabilities required for digital transformation. Announced last week, the ISG Digital Cube illustrates a framework of six enterprise capability domains needed for digital transformation: an optimized Digital Backbone; ability to adopt Emerging Technologies at Enterprise Scale; capabilities that enable Enterprise Agility; capabilities to leverage market innovation through Digital Ecosystems; capabilities to drive impactful Insights from robust analytics; and capabilities to enable Business Model Innovation.
ISG unveiled the ISG Digital Value Assessment service today at the ISG Digital Business Summit in London. For more information about the ISG Digital Value Assessment, visit this webpage.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 70 of the top 100 enterprises in the world, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry's most comprehensive marketplace data. For more information, visit www.isg-one.com.
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