Cloud technologies continue to get significant amounts of investment from organizations in India and Europe, followed by spends on the Internet of Things (IoT). 64% of organizations in India and Europe invested in cloud technologies in the last two years, followed by 51% in Internet of Things, according to Tech Horizon: Leadership perspectives on technology and transformation, a multi-country and multi-industry EY report. 43% of organizations in India and Europe stated that artificial intelligence will get almost as much investment as cloud over the next two years.

EY’s study states that in two years’ time, 82% of organizations in India and Europe will be making good progress in their digital transformations or will have fully embedded it across the business. Also, important to note that 21% of Indian and European firms will be at the most advanced stage of transformation.

Monesh Dange, Partner & National Leader – Advisory Markets, EY India, says, “With the COVID-19 pandemic, digital transformation programs become more important than ever. This is the ideal time for organizations to drive programs like digitizing customer interactions and supply chain, digitally enabling operating models & processes, and developing innovation capabilities, products and services. Such programs will not only help organizations overcome the crisis, but the ones that become digitally powered and connected during this crisis will be the winners coming out of it.”

The EY Tech Horizon report surveyed 500 large corporations and 70 startups in nine sectors during the year 2019: consumer products and retail; education; energy; financial services; health and life sciences; hospitality; industrial; technology, media and entertainment and telecoms; and transportation and logistics. The goal of the survey was to determine where organizations are on their transformation journey and how they use technology to enable it.

According to the survey, the leading organizations revealed they share common practices that help them respond to disruption to their advantage and achieve better financial performance. These are:

► Focusing on customers, first and foremost

► Accelerating artificial intelligence (AI) to drive growth

► Driving innovation through ecosystems and partnerships

► Nurturing talent with new incentives and strategies

Activating governance plans for emerging tech

Powering innovation by leveraging data and being agile (76% of organizations in India and Europe are leveraging data and analytics in order to speed up their ability to innovate while deploying agile methodologies).

In the survey, organizations identified as leaders are advanced on their journey toward transformation, are generating significant financial value from technology innovations and are making efforts to build a transformative culture. Those identified as lagging behind in transformation are not advanced on their digital journeys, are not bringing tech innovations to market and are not trying hard to build a transformative culture.

The report examined three financial metrics – revenue, gross profit and EBITDA – on a five-year CAGR basis and revealed that leaders are:

50% more likely than those not deemed as leaders to annually see EBITDA increase by more than 15%

45% more likely than those not deemed as leaders to unlock annual revenue growth of more than 10%

26% more likely than those not deemed as leaders to enjoy annual gross profit increase by more than 10%

Start-ups appear less advanced on transformation journey

When it comes to start-ups in India and Europe on their digital transformation journeys, start-ups appear less advanced than their corporate counterparts – with 75% only at the planning stages of their transformation. But it is essential to remember that these companies – less than 5 years’ old – are coming from a more sophisticated base and have less need to transform. The fact that 63% of start-ups expect to be making incremental changes to their business in two years’ time shows that transformation is encoded in their DNA.

Partnerships are key to innovation

While organizations in India and Europe understand that partnerships are a fundamental part of modern business, a core priority for the next 12 months is forging innovation partnerships. 78% of respondents have stated that they have won a significant customer contract through an innovation partnership.