There’s a business proverb used time and time again: “If you aren’t moving forwards, you’re moving backwards”.
Most business leaders understand this. Many of them accept it as a truth. This is especially true in a tech-powered landscape where it’s easy to fall behind if you aren’t taking steps to keep up to date. Digital transformation is moving at a faster pace than ever before, and remains on the agenda for those in C-suite positions
As a rule, understanding the need for change and transformation is not the problem. Often, the challenge is finding the funds to implement it. Indeed, cost is the biggest barrier to businesses hitting the “go” button on transformation.
Grayce’s research of 100+ UK C-suite pros in FTSE 350 companies found that the price of change is the biggest barrier to transformation, with a quarter of respondents citing cost as a blocker to change projects.
Those able to fund change are also under enormous pressure to get it right. The pace of digital evolution means that an abundance of services and products are now available, creating a selection headache for CPOs who are openly reporting struggles choosing the best-suited solutions. Only half of digital transformation projects met the expected goals or outcomes within a year-long period, according to most business leaders (88%).
With this in mind, perhaps the proverb business leaders should be considering now is: “If you buy what you don’t need, you steal from yourself”. Rising costs have made making the right decisions in digital transformation an essential part of the CPO role. So how can this be done?
Why is the cost of change increasing?
First, it’s important to understand why the cost of transformation is rising for businesses.
Digitisation isn’t a blanket process with a one-size-fits-all solution. Companies tend to require many different products and services in order to truly digitise operations and implement effective transformation across the front and back end.
However, as businesses attempt to achieve more and complete complex projects at a faster pace, there is often a necessity for the tech stack to be increased: This comes at a price.
Subscription services, too, are on the up – as prices rise in accordance with demand. The global subscription economy market size is heading for $1.5 trillion in 2025, up from $650 billion in 2020. Over the past decade, many software vendors have moved to pay-monthly, SaaS models as their core business strategy, recognising the business opportunity and stability these pay-monthly models present. This does, however, usually increase the expense overall for businesses embracing these technologies – with monthly outgoings rising as a result.
In addition to the increasing cost of the tech itself, training and upskilling costs are also on the rise. The more complex your tech stack, the more people you will need to train to use it. Also, complexity means longer lead times, alongside ongoing training to ensure that the essential knowledge is retained within your organisation. New software innovations are entering the market at a rapid rate. This means that organisations constantly need to upskill their teams in order to understand how to utilise and implement new innovations.
How CPOs can reduce costs and risks
The combination of spiralling prices and outside influences means that CPOs have to be more strategic than ever in their approach to obtaining new tech. This means focusing on what you need now, and what can come later.
Without a strategic approach to implementing new software and tools, there will likely be few tangible benefits. Planning new tech around current challenges and future business priorities can ensure appropriate investment. It’s vital that technology aligns with strategy and priorities, rather than the other way around.
Getting the right team in place for transformation
No true digital transformation is achievable without the right team in place.
When change is afoot, it’s imperative to engage the wider business early. This ensures an understanding of why the new technology is being implemented, how it works and what to do to ensure its effectiveness. Thinking about doing this in-house, you may choose to invest time, energy and resource into your existing team. This requires consideration of workloads and responsibilities, however. Alternately, you may choose to recruit new staff who already have the knowledge required. However, many firms are finding that it is difficult and expensive to acquire fresh talent in 2025. Alongside these rising costs, the Office for Budget Responsibility (OBR) has estimated that 2% will be added to UK employers’ payroll costs due to fiscal changes coming this April.
Risk associated with permanent headcount, alongside time and resource costs associated with this option, have led to many businesses tapping into contractors and consultants on a shorter-term basis to support with implementing change. But this strategy comes with its own risks. Not only is this expertise temporary, but it also puts businesses at risk of damaging knowledge leakage. Indeed, Grayce research found that over a third of C-Suite are concerned about loss of IP when using short-term contractors.
A possible solution to this is to use longer-term contractors and consultants to support change from project phase into business-as-usual, ensuring a gentler transition. Working with an expert change consultancy can lessen budget risks while still offering scalability and flexibility. Bringing in capable, ambitious, (and now importantly) AI-efficient talent can give companies the flexibility to scale teams in accordance with project requirements, and models like ours give organisations the option to transition analysts into full-time employees for longer-term support and IP retention.
Ensuring transparent communication to make transformation a success
Regular, transparent communication is part of what separates successful change projects from failures. Interaction around any new technology must be open, transparent and frequent so that teams can buy into these changes and understand their uses and benefits. After all, the change is likely to have the highest impact on these individuals, and they, therefore have the capacity to be the biggest advocates.
We have witnessed higher successes in organisations that allocate dedicated ‘change agents’ to communicate project updates. These agents support the project, and enable more effective communication around the transformation. This means they take the wider team along on the journey, ensuring they’re equipped with the information to understand the benefits of the change. Any new software, by its very nature, will result in an operational or cultural shift – and every company must make allowances for this. When people understand the direction of transformation, they are more likely to remain engaged and motivated.
Ultimately, the challenges around the costs of digital transformation are not going away. However, smart, strategic decisions around the most effective technology for business need, open communication, and balancing effective talent solutions are some factors that can present the best possible chance of keeping the cost of change at bay, whilst delivering lasting results.
