Digital transformation: Are you truly modernising or just upgrading?

In today’s rapidly evolving tech landscape, simply upgrading outdated systems is no longer sufficient—what organisations need is true digital transformation. According to Gartner’s 2025 CIO Survey, only 48% of digital initiatives actually meet or exceed business outcome targets. The difference? The most successful enterprises don’t just modernise but become co-owners of digital transformation with business peers to add strategic value into every investment. The CIOs who adopt this path are twice as likely to achieve their intended outcomes, according to Gartner.

Upgrading Vs digital transformation, is it the same?

As CIOs and CDOs embark on modernising their IT platforms, it’s vital to recognise the risk of conflating simple upgrades - shiny versions of the same old processes with genuine transformation that redefines business models, embeds analytics, and delivers measurable impact.

In today’s digital-first landscape, IT leaders face a critical distinction: upgrading legacy systems is not synonymous to true digital transformation. Even as CIOs increasingly allocate budget to digital initiatives, are they actually consumed for a complete digital turnaround. Forrester says a striking 72% of IT budgets continue to be allocated for ongoing IT issues, leaving only 28% for innovation, hinting that many projects still amount to maintenance, not transformation. Meanwhile, BCG’s analysis reveals that only 35% of digital transformation efforts worldwide meet their intended value targets; yet those organizations that follow comprehensive best practices unlock three times the success rate, underscoring the gap between routine upgrades and meaningful change.

How to distinguish?

Signs that an enterprise is merely upgrading rather than truly modernising can be observed clearly when comparing digital transformation to routine technology upgrades.

For e.g., Ashok Jade, Global CIO, Kirloskar Brothers says, “In manufacturing, installing new CNC machines constitutes an upgrade. However, connecting these CNC machines to various sensors and systems, collecting data, and correlating this data to provide real-time visibility and predictability about machine maintenance, ultimately reducing downtime and maintenance costs, is digital transformation.” 

This, Jade continues, leads to significant improvements such as, “A 30% increase in overall equipment effectiveness (OEE), a 30% reduction in machine downtime, and a 25% boost in production efficiency. Predictive maintenance replacing emergency repairs is another hallmark of digital transformation.”

Similarly, moving or upgrading CRM to the cloud is just an upgrade. But when CRM implementation tracks the customer journey and facilitates repeat purchases or additional services on top of product purchases, thereby increasing revenue, it signifies digital transformation. The workforce experience also evolves: shop-floor workers equipped with AR for guided maintenance or engineers collaborating through digital twins indicate more than mere IT modernisation. “In essence, if technology initiatives are tied to new ways of producing, delivering, and delighting customers, it’s digital transformation. Otherwise, it’s simply modernisation,” says Jade.

Upgrades + BPR + Business KPI quantification = Digital transformation

Upgrades should be backed up well by business process reengineering feels Prosenjit Sengupta, Group Chief Digital and Information Officer (CDIO), ITC. He gives an example, “a bank launches a mobile banking app, in the name of digital transformation but doesn't change the business process of manual verification of documents or adoption of e-signatures, have just upgraded but not truly digitised.”

He further also stresses on the importance of Key Performance Indicators (KPIs). Digital transformation in the real sense will reflect on the KPI improvement, “The CIOs should be able to quantify and project how the digital transformation exercise will convert into value and thus an enterprise not making any changes in the Business KPIs alongwith the digital transformation project is still in an upgrade mode. For e.g. a company upgraded its ERP to a cloud based ERP but doesn't register any improvement in top line, bottom line, quality metrics or customer experiences,” says Sengupta.

‘Intent is the Key’

What is the motivation and intent behind a particular upgrade is the key, emphasises Vrijesh Nagathan, Chief Information & Digital Tech Officer, Marico, “At times not enough attention is given to the rationale behind doing an upgrade, you must be clear about the motivation behind doing it. Are you getting into a safer architecture than before, is it more cost saving or increasing visibility for you; Is it increasing your ability to be more flexible?. What are the motivating factors and how you plan and foolproof it, will ensure success. If you take your eyes off it and then be a passive operator, then obviously you'll go wrong.”

For example, Nagathan says the company has recently adopted a low-code, no-code platform to ease software deployments, “We have recently invested in a low-code, no-code platform. Earlier, introducing any software change in a monolithic architecture would have required going through the entire Software Development Life Cycle (SDLC). With low-code, no-code, the same change can now be deployed in hours, if not minutes. This shows how the motivation for change varies in each case,” says Nagathan.

Subsequent to successful demarcation of upgrade and digital transformation, what are the signs it held true to its salt. Following are some KPIs, Ashok Jade suggests, CIOs can monitor:

- Machine uptime %, production volume — OEE (Overall Equipment Effectiveness), predictive downtime reduction %, digital twin adoption, % automated vs. manual processes

- Defect rate %, rework hours — AI/vision-based quality detection accuracy %, right-first-time %, customer complaint reduction due to predictive quality

- Sales growth %, lead conversion — % digital revenue, % leads from digital channels, AI-driven cross-sell/upsell success rate, customer engagement score

- Cost reduction, budget adherence — % of financial processes digitized (RPA/AI), cycle time for closing books, audits, compliances.