The future of digital transformation

The future of digital transformation

What does the future of digital transformation mean for CIOs and CTOs trying to find the balance between efficiency and growth?

Digital transformation in 2025 marks a pivotal moment where technology redefines how businesses operate and deliver value. For CIOs and CTOs, it’s no longer just about adopting digital tools—it’s about leveraging them to balance efficiency and growth. As emerging technologies like generative AI begin to change industries, and as sustainability and regulation become more intertwined with technology strategies, organisations must navigate this balance to thrive in an increasingly digital-first world.

C-suite insights: Meet the contributors

Thank you to the following technology executives in the HotTopics community for providing their insights into the future of digital transformation in 2025:

• Frankie Shuai, CISO APAC, DWS Group
• Miloš Topić, Vice President for Information Technology and Chief Digital Officer, Grand Valley State University
• Dr. Vivian Lyon, CIO/CISO, Plaza Dynamics
• Richard Corbridge, Chief Digital & Information Officer, SEGRO
• Eleni Kelly, CIO, Pluxee
• Phil Scully, VP of Digital & EMEA Technology, RS Group
• Miryem Salah, Head of Digital Data and Transformation, Vodafone

Future of digital transformation: Overview

• Key trends shaping digital transformation in 2025
• The role of CIOs and CTOs
• Challenges on the horizon
• Actionable insights for 2025: Key takeaways

Key trends shaping digital transformation in 2025

Agentic AI and machine learning

At the 2025 World Economic Forum in Davos, the spotlight was on agentic AI—AI-driven agents capable of performing complex tasks autonomously.

These tools are already making waves across industries, enabling businesses to reimagine traditional business models and internal processes. One technology leader revealed in a Business Insider interview that the adoption of AI agents had prompted his firm to rethink its entire commercial strategy. The potential of agentic AI goes beyond operational efficiency; it is set to redefine the workforce and the way businesses approach problem-solving.

The risks associated with agentic AI have the potential to overshadow its many benefits and capabilities, however. Frankie Shuai, CISO APAC at DWS Group, commented: “There is a commonly used Chinese word “危机” where the first part “危” means risk and the second part “机” means opportunity. When adopting emerging technologies like AI or IoT, jointly evaluating risk and opportunity is essential to ensure effective implementation.”

For Miloš Topić, the Chief Digital Officer at Grand Valley State, jointly evaluating the risks and opportunities of emerging technologies like AI starts with the why: “Why are we doing this? What’s the desired state and objective? Then, and only then do we engage in evaluations and selections of tools and technologies.” Miryem Salah, Head of Digital, Data and Transformation at Vodafone, has a more structured approach to evaluating these risks; providing employees with access to these tools is essential for staying competitive. Instead of taking the reactive approach, her organisation has implemented a "structured risk-opportunity assessment framework". In this process, the CISO is responsible for evaluating security implications, while the CIO focuses on assessing operational value. Both teams work together to score each technology against established risk thresholds and strategic alignment metrics.

A whitepaper by the World Economic Forum, in collaboration with Capgemini, highlights these risks further, emphasising that while AI agents hold great promise, they also come with significant challenges. These include technical limitations, ethical dilemmas and heightened security risks, which become even more pronounced as AI systems operate with greater autonomy and without human oversight. Such vulnerabilities could result in data breaches, malware attacks and other operational threats. To fully unlock agentic AI’s potential while addressing these risks, organisations need to prioritise AI literacy by experimenting with multiple agents and implementing well-planned, proactive strategies for risk mitigation.

Advancing sustainability through digital transformation

According to the WEF Global Lighthouse Network report, digital transformation is proving instrumental in advancing decarbonisation and circularity goals. Innovative business models and value chain partnerships are enabling organisations to address sustainability challenges while driving business benefits. The report highlighted:

25-50 percent reductions in inventory levels;
15-30 percent improvements in on-time delivery;
30 percent average reductions in material waste;
25 percent reductions in energy and water consumption.

These advances not only support environmental goals but also enhance supply chain resilience and resource efficiency, addressing concerns over local resource availability and rising costs.  On the other hand, it is also important for leaders to acknowledge the flip side of this progress—what happens when sustainability hinders digital transformation? 

For instance, increased energy consumption from data centres, the challenge of managing electronic waste, and ensuring data privacy and security are just a few of the complications that can arise. Add to that scalability issues, particularly for organisations in developing regions, where the infrastructure to support sustainability and digital innovation may lag behind other markets.

Considering the recent news of newly inaugurated President Trump once again pulling the US out of the Paris Accords, it also calls to attention the importance of having a leader who believes in, and actively promotes, their sustainability efforts.

The last time Trump withdrew from the agreement, global energy-related CO2 emissions went on to increase by 1.7 percent. This set off a somewhat unprecedented chain reaction, becoming an “open invitation for other nations to scale back their own climate commitments.” Within organisations, a similar dynamic can unfold. If sustainability is perceived as a roadblock to digital transformation, there is an increased risk of teams scaling back on these initiatives.

Evolving employee and customer expectations

Evolving employee and customer expectations are driving transformations in workplace culture and operations. For instance, HR leaders are increasingly leveraging AI to streamline talent management and improve employee relations. Research from the Harvard Business Review reveals that nearly 70 percent of organisations are already utilising AI in HR functions. These tools are changing how companies attract, manage and retain talent in the digital age. 

There is no denying that leveraging AI can streamline a wide range of tasks within the organisation, helping staff to automate or expedite repetitive or mundane tasks. In other areas, however, such as building employee relationships or fostering a more positive work culture, a more human touch is required, something that AI cannot replicate anytime soon.

Other areas of concern include the handling of private data and algorithmic bias. In a recent Food for Thought discussion on AI use cases, several technology leaders acknowledged the potential for bias, stemming from improperly input or managed data. Keeping up with evolving employee and customer expectations calls for a shift in the way operations are run within an organisation—but it also requires setting clear boundaries for tools like AI models, using predefined filters and thoroughly validating assumptions. This essentially means assessing the data, rules and logic that AI systems rely on to ensure they align with real-world contexts and do not reinforce errors or biases.

Dr. Vivian Lyon, CIO/CISO at the IT supports and services organisation Plaza Dynamics, argued that as digital initiatives scale, it is more important than ever to hire the right talent to support growth: “A comprehensive and robust onboarding process paired with hiring the right talent including strong leadership ensures that new employees understand the business values, expectations and processes right from the start.”

The role of CIOs and CTOs

Tech enablers to business strategists

“The best transformation strategy is co-authored by the entire business but often with the CIO holding the pen,” says Richard Corbridge, Chief Digital & Information Officer at SEGRO.

In his view, the CIO’s role within the organisation acts as either the “catalyst or foundation for change” when seeking to become more efficient, accurate and productive. Both Corbridge and Lyon argue that for transformation to be effective, it must be a collaborative effort that aligns with business goals rather than just a technology-driven initiative. “CIOs and CSOs must work closely and collaboratively with boards and executive leadership.”

CIOs and CTOs of the future must balance deep technical expertise with strategic business acumen. As highlighted in a recent Deloitte survey, successful CIOs are those who can act as both technical gurus and change agents. They must:

Mitigate risks while embracing strategic risk-taking;
Enhance operational efficiency while fostering transformation and innovation;
Control costs while delivering top-line business value;
Execute current priorities while influencing future strategies.

John Marcante, CIO-in-residence at Deloitte’s US CIO Program, underscored the significance of this dual role, emphasising the growing connection between technology and corporate strategy, noting that CIOs are essential executive team members who drive growth while maintaining efficient, secure, and agile operations.

The role of the CIO is evolving, and the whole IT function is starting to realise that transformation is “just part of the job” according to Eleni Kelly, CIO at Pluxee. “Transformation used to be with IT, then it’s gone to different departments. Now we see it coming back to IT because the CIO role is now more about strategy, innovation and ultimately, transformation.”

Building agile, scalable infrastructure

Agility and scalability are critical for digital transformation success. In an exclusive Leaders Profile interview, Lauren Tennant, CEO and Founder of Horizon Seven, spoke of her own technology procurement journey, applying agile principles to technology purchases for her organisation. “For me it’s all about integration, capabilities for organisations. How do we apply agile thinking and refreshed thinking to service integration and management-type principles?” Lauren’s view is that agile-based processes foster collaboration while co-creating solutions, and additionally, quickly realise value.

In another Studio roundtable debate, Linda Rogers - former CIO at Life Healthcare Group - urged technology leaders to take the “IT voice” and translate it, converting it into something the business side can digest. “It’s not technology programs infrastructure, it's a business programme with technology being the lead for it.” A way to start transforming and building your infrastructure effectively is to “start with a few low-hanging fruits instead of transforming the whole business at once” according to Detlef Nauk, Head of AI & Data Science Research at BT. Taking small steps to digitally transform your organisation, paired with an agile mindset, is key.

Ensuring cybersecurity and data integrity

As digital transformation accelerates, the threat landscape continues to evolve. Collaboration between CIOs and CISOs is essential to balance innovation with robust security measures. In addition to this, data quality and governance are integral to transformation efforts, as a result, ensuring data accuracy and integrity not only drives better business outcomes but also meets regulatory requirements and safeguards sensitive information at the same time. CIOs, alongside CDOs, play a critical role in maintaining high data quality standards, enabling trust and informed decision-making.

When asked what role CISOs and CIOs play in shaping their organisation’s digital strategy, Shuai explained: “CISOs and CIOs [are] playing the pivot-enabling roles to facilitate every line of business in the company to unlock the potential value of emerging technology like cloud and AI in the safe & sound manner.” Salah, argued that in order to become effective leaders they must do the following: "Bridge technical implementation with strategic vision, championing innovation while simultaneously serving as guardians of data integrity, regulatory compliance and cyber resilience."

Shifting the focus to cybersecurity and risk measures, Lyon argued: “Some risks to evaluate include data privacy and security, as AI and IoT involve massive data collection, increasing exposure to cyber threats, and regulatory and compliance issues.” Topić explained that risk governance practices and the evolving needs of digital transformation go hand in hand, “while not always the most exciting of work, they are important in managing organisational risk, individual privacy and collective responsibility for the entire community.”

In every successful digital transformation, there is a solid foundation of cybersecurity in place—more specifically, a proactive security approach is embedded from the start, not as an afterthought. Kelly reaffirmed this idea: "We always have secure by design. Security is never just a result; it is considered from the very beginning when we think about any digital transformation initiatives.”

Phil Scully, VP of Digital & EMEA Technology at RS Group, expands upon the dual role of the CIO and CISO in digital transformation. “Shaping the technology and platform enablers as a CIO and the security and compliance capability and operations as a CISO.” The CIO is responsible for ensuring stable, scalable and secure technology operations, while controlling the cost of ownership and project delivery. Meanwhile, the CISO focuses on training, awareness, threat management and maintaining secure operations.

Challenges on the horizon

Balancing innovation with cost management

“It’s always very difficult to convince CFOs that you need to have an innovation fund.” Kelly argued that in every organisation, there are often budget constraints on digital transformation, with CIOs having to justify having an innovation fund. In her view, the approach to innovation should involve starting small and proving their value through implementation, which requires a culture that encourages everyone to think about improvements.

“Compliance has to be one of the pillars of innovation, there is no point in delivering a wonderful new and innovative solution if compliance then prevents it from scaling.” Corbridge suggests that technology leaders integrate compliance into their innovation strategies, seeing it as a guiding force rather than a roadblock. 

So how do technology leaders ensure that compliance efforts do not stifle innovation during digital transformation? Salah believes that compliance and innovation can work together harmoniously without being in conflict. Instead of adding security and regulatory requirements after digital projects are developed, they should be integrated from the design phase, This allows teams to innovate within a compliant framework, reducing the need for costly adjustments later. "We've established a cross-functional governance committee where compliance officers work alongside innovation leads to develop flexible control frameworks that protect core requirements while creating designated "sandbox" environments where teams can experiment with emerging technologies under appropriate risk parameters."

Aligning cost control with strategic initiatives is the first step to balancing innovation within your organisation. Effective cost control tends to begin with a rough understanding of where your organisation’s priorities and strategic objectives lie. In an HBR article analysing cost-cutting within organisations, experts argued: “Costs should no longer be locked inside organisational silos that get protected and thus are disconnected from growth. Budgets must be discussed in depth with the leadership team and prioritised to focus on what truly supports your strategic goals and the capabilities that will help you achieve them.”

Strategic partnerships and outsourcing specific functions within an organisation can significantly reduce costs. One effective approach is to engage "quality outsourcers." For instance, Latin America has become a prime location for hiring tech talent due to its typically lower cost of living. Hiring talent from this region can lead to a 30 to 50 percent reduction in hiring costs. Tapping into a diverse talent pool, with a range of highly desired skillsets, is one of many ways to balance innovation with cost management in your organisation.

Talent shortages in emerging technology fields

“The reality is that a staggering 70 percent of digital transformation initiatives fail, and one of the main culprits is a lack of skilled talent. While technology evolves at lightning speed, the workforce struggles to keep up, leaving businesses stuck in limbo.” There is often a “mismatch” between the demand for skilled technology talent and the supply of those with the right expertise to further drive digital transformation within the organisation.

PwC's 25th Annual Global CEO Survey revealed that “54 percent of CEOs identified the lack of digital talent as a significant barrier to achieving transformation goals”. What does this mean? Well, organisations need to start being more proactive in bridging the talent gap if they want to progress on their digital transformation journey—a few of the ways they can do that is by investing in continuous learning and fostering a culture of innovation by engaging top talent early on by partnering with universities so they can get their pick of the pool of technology professionals.

Regulatory compliance with rapidly evolving technology 

“There should be a mindset shift that regulation is not a hurdle, but the commitment we make to the regulators, customers and shareholders to run our business in a safe, sound and compliant manner.” Shuai argued that CIOs and CISOs should work together to distinguish regulatory expectations while also putting themselves in the customer’s shoes to determine “What can be done” and “wow, can it be done”, but not simply “something cannot be done.”

All digitally-transforming organisations and leaders are aware that regulatory compliance in IT is a set of guidelines they must follow, focusing on infrastructure, safeguarding data and securing the environment. IT compliance also focuses on enhancing cybersecurity and specifically safeguarding data, reliability of operations and educating users on the latest trends.

Violating these compliance standards puts organisations at risk, with a high chance of undergoing a data breach. How can leaders prevent this? By being proactive. Lyon argued: “Establishing and adopting a proactive and structured governance framework, such as the updated NIST CSF 2.0, can lay the foundation that enables organisations to make the right decisions… while embedding cybersecurity into their overarching digital transformation strategies.” She stresses that effective risk governance requires foresight, adaptability and stakeholder engagement to ensure security remains a fundamental pillar of digital transformation.

Scully points to evolving market regulations as a significant hurdle in scaling digital initiatives, particularly around certifications, data housing and safe harbour compliance. “There are a lot of regulatory changes coming into various regions and there is a need to comply with these changes either discreetly or as a part of a project.” The CIO and CISO must work in tandem to navigate these shifts, making sure that compliance is integrated into the digital transformation strategies rather than seen as an obstacle.

Corbridge’s biggest regulatory challenges revolved around data sharing and differing interpretations. He highlighted that in government roles, data sharing in different parts of the civil service is viewed as highly restricted. He suggested: “If departments and citizens can understand the benefit, direction, risk and outcome then often a solution can be found.” 

On the other side of the debate, Topić argued: “CIOs and CISOs need to have ongoing conversations centered around strategy, direction and organisational mission prior to any regulations being a consideration. Once we are all on the same page, we will work together to resolve any issues.”

Actionable insights for 2025: Key takeaways

Agentic AI is reshaping business strategies, offering automation and efficiency, but also bringing security and ethical challenges that require proactive governance.
Digital transformation supports decarbonisation and efficiency, but leaders must address energy consumption, electronic waste and regulatory shifts to maintain progress.
CIOs and CTOs are shifting from technology enablers to business strategists, balancing cost control, innovation and risk while driving enterprise-wide transformation.
Embedding security from the outset of digital initiatives ensures compliance, protects data integrity and mitigates evolving cyber threats.
Aligning budgets with strategic goals and leveraging global talent pools help optimise resources for innovation.
Rather than a barrier, compliance should be seen as a framework for responsible innovation, ensuring security and customer trust.
Establishing structured governance models helps organisations navigate digital transformation while maintaining regulatory and operational resilience.