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The Will Needed to Digitally Transform Remains Weak in Most Organizations

Thursday Nov 29th 2018 by Mike Vizard

Digital business transformation heading into 2019 appears to be one of those activities that everyone talks about, but in practice, not nearly as many are making progress.

Digital business transformation heading into 2019 appears to be one of those activities that everyone talks about, but in practice, not nearly as many are doing as everyone might suppose. A global survey of 2,280 business executives conducted by PwC finds only 44 percent of respondents believe that that their company integrates digital strategy into corporate strategy, and just 43 percent of respondents say their leaders are digitally savvy enough to drive digital transformations.

In fact, the PwC survey makes it clear not everyone is on the same page when it comes to digital business transformation. Almost a quarter (23 percent) say digital is synonymous with IT. Another 29 percent say that digital refers to all investments being made to integrate technology into their business, while 21 percent say that digital goes beyond technology alone to reflect a mindset that reflects innovation and flat decision-making.

Unfortunately, a separate global survey of 1,000 IT professionals working at companies that generate more than $500 million in annual revenues conducted by AppDynamics, a unit of Cisco, suggests that IT professionals may be even less sanguine about digital business transformation. The survey finds only 22 percent of global technologists are very optimistic that their organization is ready to embrace rapid technological change that would be a crucial element of any digital business transformation strategy. In fact, the survey finds only 9 percent of respondents consider themselves to be “agents of transformation” capable of driving meaningful change within their organizations.

IT Professionals Have Mixed Feelings on Transformation and Their Careers

Not surprisingly, the survey also finds that only 26 percent of IT directors and managers feel their full potential is being achieved in their current role and over half of respondents (55 percent) say their organization does not encourage technology professionals to embrace the creative, future-looking side of technology. A full 86 percent of IT professionals think their organization has fallen behind the most forward/innovative IT team in their country in terms of skills, qualities and knowledge, and 45 percent see themselves lagging more than five years behind.

Additionally, 56 percent of technologists say there is a surplus of outdated technology within their IT department and 85 percent do not have access to the software and tools they need to turn data into real-time, context-specific insight. As a result, 49 percent do not have access to the data they need to achieve innovation goals.

Perhaps worst of all, 60 percent of technologists say too much of their time is spent keeping existing software and systems up and running, and 58 percent say their work in IT is so reactive that they forget what attracted them to technology in the first place.

Despite all those issues, however, IT professionals remain committed. A full 71 percent of respondents care deeply about how technology is changing the world, while 76 percent believe that emerging technologies will give them opportunities to develop their skills and their careers. A full 69 percent want their career to leave a lasting and positive legacy.

Digital Transformation: Personnel, Process and Technology

The primary challenge organizations face when it comes to digital business transformation is orchestrating all the changes to personnel, processes and technologies involved, says Gregg Ostrowski, a regional CTO for AppDynamics.

“It’s a major cultural shift,” says Ostrowski.

One of the best ways to get started making that transition is by embracing modern DevOps processes, adds Ostrowski. Once the cadence at which applications are being delivered and updated starts to exponentially increase, it then becomes more feasible for the rest of the organization to transform, says Ostrowski. In fact, the specific business impact of those first few applications may not be as important as simply getting the business to better appreciate just how agile IT departments can be.

Of course, not every digital business transformation needs to be driven by a custom application. The digital business transformation decision many organizations are wrestling with now is to what degree to rely on custom versus packaged applications to achieve that goal. SAP, for example, is now delivering updates to applications delivered as a cloud service every quarter. For example, the latest release of SAP S/4HANA Cloud takes advantage of machine learning algorithms for everything from an integrated warehouse and transportation management applications to tools for tracking budget consumption and purchase order accruals.

Specifically, the SAP ERP suite of applications delivered as a cloud service are better able to employ algorithms to embed predictive analytics capabilities across the entire application portfolio, says Sven Denecken, senior vice president and head of product management and co-innovation for SAP Cloud ERP.

“Machine learning makes it possible to optimize the use of resources,” says Denecken.

The issue many internal IT organizations will need to come to terms with is to what degree they can employ machine learning algorithms within the context of a custom application intended to drive digital business transformation versus relying on a vendor such as SAP to provide similar capabilities within a packaged application that can be invoked as a cloud service.

As it turns out, organizations are also wrestling with to what degree those transformations will be driven by professional developers versus so-called citizen integrators. Dell Boomi, a provider of a cloud service for integrating data and applications that is delivered as a cloud service, is making the case for employing a set of low-code tools coupled to a next-generation integration platform-as-a-service (iPaaS) to enable end users to drive digital business transformation using tools that will be increasingly augmented by machine learning algorithms.

In effect, the IT environment will become hybrid not just in terms of technology platforms, but also the types of people employing it to achieve various goals, says Steve Wood, chief product officer for Dell Boomi.

“We need to think of digital transformation as an ongoing continuum,” says Wood.

Obviously, organizations of all sizes will be moving down that continuum at different rates of speed. The rate of speed for each of those organizations is likely to be determined, however, much more by the culture of the organization than any specific class of technologies. In general, most organizations intuitively understand that they need to transform. Every day, the leaders of those organizations hear about how one industry stalwart or another is being disrupted by new emerging rivals. But turning that general feeling of uneasiness into an actual business plan that can be realistically implemented requires a framework to provide the level of structure needed to spur innovation. Otherwise, rather than feeling empowered to drive change, most employees will naturally continue to wait for permission to innovate long past the time when such innovations could have really mattered.

 

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