Robert Kneschke - stock.adobe.co
Anyone daring to utter the words “digital transformation” in close proximity to people in the IT industry is likely to rapidly find him or herself gaining a very clear understanding of what the phrase “bees around honey” means. It’s the hottest trend in IT right now. Anyone who’s anyone is digitally transforming. Or at least talking about it.
And no wonder, when IDC forecasts that worldwide spending on technologies and services that enable digital transformation will hit just under $2tn by 2022. IDC research director Shawn Fitzgerald says 30% of G2000 companies will have allocated capital budget to the equivalent of 10% of revenue to their digital strategies.
“This shift toward capital funding is an important one as business executives come to recognise digital transformation as a long-term investment,” he states. “This commitment to funding DX [digital transformation] will continue to drive spending well into the next decade.”
But that doesn’t mean it’s all smooth sailing. For example, in July, Ger Perdisatt, director for the enterprise commercial group at Microsoft Ireland, revealed that while many enterprises felt under pressure to embark on digital transformation projects, they were unsure how to go about it and why they had to do it.
For vendors and partners, that has to be a real concern. It’s a bit difficult to convince someone to do something if they don’t know how or why they need to do it.
It probably doesn’t help if, in Perdisatt’s words, the conversation between Microsoft and customers is having to shift from one based on technology to one on “how to change their culture and operating processes because, ultimately, we know the technology works but, actually, it is the organisation’s ability to assimilate that change that is a bigger determinant of whether any of these digital transformations work”. That’s not a unique perspective to the software giant, of course.
Disruptive and confusing
But it shows just how disruptive and confusing the digital transformation story could be for customers. After years of settled conversations about technology, they are now expected to engage with suppliers at a different level – and one where, to all intents and purposes, there is no end in sight because so often digital transformation is described as an ongoing process.
Which raises a number of questions. For instance, if digital transformation is so compelling, why is the message failing to get through to so many customers on why they need to do it? And what can vendors and partners do to convince customers of the merits of digital transformation and to help them make the necessary changes to reap its benefits?
Peter Ballard, founder and executive director at Foolproof, says one of the problems is that, for too long, customers have been taking biased advice from companies driven by an underlying need to sell technology.
“This makes for results in technology being treated as a silver bullet which solves all the problems inherent within a product, service or organisation. This means the focus is disposed towards the features and functionalities of any given platform or business, with little or no consideration for what the user actually wants or needs from the experiences they have,” says Ballard.
There is a shared interest for vendors in selling platforms and technological stacks or frameworks, or big pieces of integration work to support digital transformation projects driven by IT, he says.
“Often, these vendors can be in cahoots together, racking up extortionate costs with little hope for return. Meaning it all comes down to investment and technology, not the people or user,” adds Ballard. “He points out that while the $2tn figure forecast by IDC sounds impressive, we also need to bear in mind how those projects are delivered needs to improve drastically, given that four out of five projects have failed to realise value.
Let’s talk business
There’s an irony in the fact that after years of extolling the benefits of technology, often with only a cursory nod to the business, some parts of the IT industry are now saying to customers, “what we need to talk about is the business”.
This may explain why so many are uncertain about what they’re trying to achieve. Underlining this confusion, Roger Coles, Europe, Middle East and Africa (EMEA) director of alliances and channels at SnapLogic, quotes company research that 40% of businesses are either behind schedule with their digital transformation projects or haven’t started them, and a further 69% of those who have undertaken a digital transformation initiative have had to re-evaluate their strategy.
Why is that? “A typical reason for these figures is that organisations aren’t clear on what they want to achieve from their digital transformation projects – there is a lack of clarity from the start which can lead to confusion and employees working at cross purposes,” he says.
“Our research found that 58% of businesses admitted to confusion across the organisation around what they’re trying to achieve with digital transformation, underscoring the need for strategy development and clear communication across teams.”
Alanzo Blackstock, director of the partner organisation at VMware UK & Ireland, says among the concerns the vendor hears from partners in terms of the challenges businesses have in adopting digital technology are “lack of strategy, too many other business priorities, security concerns or lack of technical skills”.
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He acknowledges that it is “a challenging path for organisations, critical as it may be, and is likely one of the reasons why not all customers are transforming at the same pace”.
John Kim, director of storage marketing at Mellanox Technologies, offers a succinct reason for why many organisations are unsure of the benefits, arguing that it’s because there is “no clear definition of what it is”.
“It’s like saying ‘cloud’ or ‘security’ or ‘web strategy’. Those are all positive terms, and nobody is against cloud or against having more security, but each of those terms – including digital transformation – means different things to different people,” says Kim.
He adds that what digital transformation means to someone is dependent on what you’ve already achieved, claiming that in the 1970s, for example, it would have meant getting a mainframe and then workstations or minicomputers, while in the 1980s it meant rolling out PCs on the desktop. Kim lists similar technology trends in the 1990s and 2000s.
It’s an interesting point, but it begs the question: if digital transformation has occurred in different guises through the decades, isn’t this just a marketing rebranding for the present era?
Culture change required
No wonder people are confused. As Perdisatt intimated, there’s also a cultural problem, an issue picked up on by Jon Payne, manager for sales engineering at InterSystems.
“Digital transformation is as much of a cultural challenge as it is a financial and technological one,” says Payne. “In fact, trying to convince a customer to change their ways can be even more challenging than persuading them to upgrade their legacy systems. For both aspects, it’s a slow process.”
Dave Tracey, EMEA channel manager at Cogeco Peer 1, says the extent of what it covers could be a problem. “The process of digital transformation is not a tick box exercise, and is certainly not a simple journey from A to B,” he acknowledges. “Every business, irrespective of size and industry, has different requirements and knowing where to begin can be a challenge for many organisations. It’s easy to lose sight of what digital transformation is.”
And he makes the point that the difficulty in being able to pin down when digital transformation ends could be another inhibitor for customers. While it might be better to approach digital transformation as “an ongoing digital revolution” rather than a singular large-scale project, Tracey admits: “Without a clear end point, it’s hard for businesses to gauge its level of success.”
Ian Stone, founder and CEO of Vuealta, argues that there’s too much technology and “businesses are struggling to see the wood for the trees”. He believes many recognise the need to embrace digital transformation, “but what technology do they actually need to apply it to? And how do you get all of these new technologies to work together? It’s a never-ending maze unless there’s someone there to support the journey”.
Ramyani Basu, digital partner at AT Kearney, suggests a number of reasons why businesses are reluctant to make the jump to digital transformation. “It is difficult to directly attribute quantifiable ROI from the investments needed to complete a digital transformation,” she notes.
There’s also “a misconception that a digital transformation is primarily in the remit of the CIO because it’s focused on technology, rather than something that encompasses the entire organisation. Finally, companies hesitate if they have previous experiences of digital initiatives failing to deliver expected returns, as they didn’t have a unified structure”.
A long journey
The reluctance of businesses to commit to a definitive digital transformation plan is something a number of industry insiders have picked up on. Andy Bell, chief technology officer at Edenhouse Solutions, points to the project’s length because it isn’t a destination that can be reached overnight
“There’s likely to be a long journey involved to get there – and for many organisations that wish to keep evolving, it will be ongoing. This means that a high level of project management will be required to ensure it achieves the goals originally set out,” he says.
Andy Bell, Edenhouse Solutions
In other words, the end is often not in sight and the work could take forever. Jonathan Bridges, chief innovation officer at Exponential-e, says one way to address this issue is to break processes down into transactional and transformational models.
The transactional model focuses on quick wins, where modernisation and efficiencies can be introduced fast to provide tangible benefits. The transformational model is longer-term, dealing with the overall technological make-up of their business and how new technologies can completely overhaul the way they operate.
"You need to be upfront about these two areas and present them as being two sides to the digital transformation coin,” he argues.
Vendors and partners need to start with modernising customer architectures and ‘old-school’ services at the core of their business as a first port of call in the digital transformation journey. “This is what will start to give flexibility and choice, by putting this foundation in place, usually through a move to SaaS [software as a service] and the cloud,” he says. After that, they can move onto the transformational side, looking at the internet of things (IoT), 5G, augmented reality, and so on, as longer-term goals.
And then there’s the fact that, as others have noted, it’s not just about the technology. Bell says the software and technology, if implemented correctly, will work. But the key “to driving value for the business is user adoption. Aside from technological changes, digital transformation requires an in-depth planning period where users of the technology are briefed, stakeholders’ needs are identified, expectations are managed and employees are engaged from day one”.
The role of partners
The good news is that whenever there is confusion and there is a need for better communication, education, engagement and strategic clarity, the value of the role that partners play becomes clearer to customers and vendors. According to SnapLogic’s Coles, partners have “an instrumental role to play when it comes to setting strategic direction and influencing users’ perceptions and experience of digital transformation”.
They can use expertise gained from working on digital transformation projects elsewhere to help customers define what they are trying to achieve and how to roll out programmes across the organisation.
“Experience and advice, based on best practices developed from working on multiple projects across many verticals, is key to aligning people, processes and technology around common business goals to accelerate digital transformation success,” says Coles.
Vuealta’s Stone says vendors and partners need to emphasise their role as consulting guides. “You have to not just be experts in the technology solutions you sell, but in the business challenges of the customers you’re selling to. You have to be able to articulate how technology can change people’s everyday working lives for the better and the positive impact that can ripple through the wider business as a result,” he says.
There is a growing requirement for partners and vendors to provide expert consultancy to advise businesses on how to make the most of their technology, in other words someone who can understand what business problems they need to solve and how that can be tackled with the right technology.
Bridges agrees that partners need to have a consultative period to analyse the landscape of the customer’s business and avoid jumping feet-first into any changes. “They need to get a sense of how the business operates first and then the process of selling customers on digital transformation and actually delivering on it becomes far easier,” he says.
They need to help define an action plan that can change dependent on each business and what they are looking to do. “Do they need a more customer-centric approach, or to grow revenue, or to engage their employees with a better toolset for their work?” he asks. “Once this is established, the same analysis needs to take place on the key drivers for this to happen from a technological perspective. How can the path to a more digitally enabled future be as cost-optimised as possible, rather than just a one-size-fits-all approach?”
Such an approach, he says, gives businesses “a true picture of what can be achieved through digital transformation”.
For many businesses, that’s probably all they’re looking for. But getting a true picture isn’t as easy as it sounds. Remember in the film of Peter Pan when he says, “I do believe in fairies, I do, I do” and Tinker Bell comes back to life? Well, if someone says the words “digital transformation” three times, something pretty strange can happen. No, their business won’t be dramatically digitally transformed, but they can find themselves suddenly surrounded by IT salespeople keen to sell them something.
The real magic comes when partners are able to give customers a clear idea of why they need to start the digital transformation process, what it requires and how they go about it. That’s not too much to ask, is it?