Digital transformation: How to avoid the pitfalls
Most digital transformation projects end in failure, so how can you help steer customers in the right direction?
The concept of digital transformation continued to be at the top of the list of industry talking points in 2017.
Vendors, analysts and channel firms all weighed in on the advantages that digitisation can deliver - reduced operating costs, increased productivity, improved customer service and ensured adherence to regulation are all cited as benefits of replacing legacy systems and manual processes with a new digital environment.
The truth is though, that behind the hype and the headlines, many organisations are struggling with their transformation. As many as 75% of CIOs and their enterprises will fail to meet all of their digital objectives by 2019, according to analyst firm IDC, "dragged down by conflicting digital transformation imperatives, ineffective technology innovation, cloud infrastructure transition, and underfunded end-of-life core systems."
IDC lists the five most common factors hindering organisations' digital transformation projects as tactical digital plans, siloed organisational structures, outdated Key Performance Indicators (KPIs), silos of innovation, and limited technical expertise.
"Those organizations attempting to thrive in the digital economy need to look at these five challenges, assess their capabilities and build specific plans to meet and overcome the challenges, Joe Pucciarelli, group vice president and IT executive advisor, IDC, tells Channel Pro.
He adds that many companies are making "selective progress" on individual digital programmes or initiatives, but most are challenged to make progress on a systemic digital strategy - digitally transforming the organisation broadly rather than on an ad hoc, piecemeal basis.
Identifying your KPIs
This is highlighted by recent research from IT provider Ensono and the Cloud Industry Forum, which discovered a mismatch between organisations' KPIs and their drivers for transformation.
While 70% of businesses are focused on cost savings in their digital transformation plans, only 51% of these measured cost savings as a KPI. Equally, customer satisfaction was also the most measured KPI (52%), but was a driver for only 40% of digital transformation projects.
"Either the strategy is not tied down and organisations are 'doing' digital transformation for the sake of it, or the strategy is not being communicated adequately," says Simon Ratcliffe, principal consultant at Ensono. "Whatever the root cause, for digital transformation strategies to succeed, the IT department, the business and the board need to have a clear and shared vision, and that vision needs to focus on people first, with the right technology facilitating."
Elsewhere, a new survey from cloud service provider Interoute points another problem holding back digital transformation - a lack of consensus from in the boardroom.
Mark Lewis, EVP products and development at Interoute, says without a clear route forward agreed by the C-Suite, many IT professionals will find it difficult to progress critical digital transformation projects, risking UK businesses being left behind.
"It is vital to get buy-in at the highest levels of any organisation to make the changes necessary that will allow businesses to progress and keep pace with the digital economy," says Lewis.
The research also shows a higher cost associated with digital transformation skills, with 61% of UK firms expecting to pay at least 20% more for these, compared with skills required for other IT projects.
The channel's role
Justin Harling, managing director of Cisco's UK partner of the year, CAE UK, believes the channel has a responsibility to avoid succumbing to the hype, and instead explain a way through it.
"There is a significant gap between the talk of digital disruption and a more measured approach to digital transformation. This can seriously affect the setting of digital goals and potentially result in unrealistic expectations from the outset," Harling tells Channel Pro.
The exec says time and effort need to be put into aligning IT departments and digital functions with the rest of the business: "Otherwise you run the risk of consistently getting a "no" from IT, a "yes" from digital, and a potential positive outcome strangled in the middle."
He adds that building a digital transformation strategy on an infrastructure platform that's not up to date is a plan destined to fail.
"Transformation is a gradual process that must have the strongest possible foundations in areas such as connectivity and security," says Harling. "Having this conversation early allows for much better planning and will deliver consistent outcomes. Digital transformation cannot be built on sand."
However, Harling argues that if a reseller has strong business knowledge and is considered part of the decision-making process, they are in "a fantastic position for a long-term relationship."
Bringing the whole organisation with you
Lal Hussain, director of IT applications at Insight UK agrees the challenge for the channel is getting beyond the hype. "Too many 'digital' projects are deemed to be a gimmick rather than generating a genuine business benefit," he tells Channel Pro.
Hussain adds that people are the most complex and critical part of any digital transformation: "Because people personify the culture, failure to fully engage in a program of change management will result in unnecessary resistance, not to mention, avoidable drag on timelines and a high potential of failure. To counteract this, you need to bring the whole organisation with you, not just those directly involved in the digital transformation project."
Hussain advises channel firms should learn from the journeys of others. "Take advantage of networks, engage partners or hire talent so you can benefit from their experience and upskill the existing team," adds Hussain.
There exists a significant opportunity for the channel to help their customers navigate their way around the pitfalls associated with undertaking a major digital transformation project.
"We advise organisations to invest time focusing on their internal systems, processes, and culture to 'get digital done", says IDC's Pucciarelli. "And, at the same time, create a measurement framework, built upon new KPIs, to consistently assess their digital transformation performance and investments along the way."
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