Digital Transformation Not Very Transformational, Three In Four Organizations Find

Photo: Joe McKendrick

This and more revelations came from e recent survey of 450 executives released by Couchbase, with 73 percent feeling that the results they have witnessed from digital transformation efforts have falled short of being truly "transformational" or "revolutionary." This is down from 90 percent two years ago, but still represents the majority. In addition, more than eight in ten, 81 percent, have had a digital transformation project fail, suffer a significant delay, or be scaled back in the last 12 months. At least 42 percent said they were behind schedule, or at risk of falling behind, on their most significant digital transformation project.

Pushing the panic button as a result of digitally transform-or-die thinking may also be resulting in reckless decisions as well, the survey's authors caution.  Forty-six percent fear becoming less relevant in the market if they do not innovate, while 42 percent say they will lose IT staff to more innovative competitors. "Seventy-one percent agree that businesses are fixated on the promise of digital transformation, to the extent that IT teams risk working on projects that may not actually deliver tangible benefits."

It's not all gloom, however.  The top benefit respondents reported seeing was more efficient working processes (reported by 58 percent), followed by improved customer experience (50 percent) and increased worker productivity (50 percent). Companies recognize that user experience and customer experience (UX and CX) are the keys to success in today's digital economy, and have applied their efforts there with some success. Seventy-three percent of organizations have made “significant” or better improvements to UX in their organization through digital innovation. Twenty-two percent say they have transformed or completely “revolutionized” UX -- a marked increase over Couchbase’s 2017 survey (15 percent).

Digital transformation may be slow on delivery, but executives see it as the only way forward, especially if nimble disruptors are nipping at their posteriors. Think of the way FinTechs are giving traditional banks and financial organizations a run for their money. Financial services are not the exception, either. Ninety-one percent of respondents said that disruption in their industry has accelerated over the last 12 months, 40 percent “rapidly.” And organizations plan to spend $30 million on digital transformation projects in the next 12 months, compared to $27 million in the previous 12.

So what's gumming up the digital transformation works? The Couchbase survey authors point to the need for top-to-bottom cultural change to embrace digital change.  While IT leaders and teams are incredibly smart, they should only be one part of the process -- something to which many organizations are just starting to adjust. The majority of organizations (52 percent) still have digital transformation strategy set by the IT team, the survey shows.  In addition, "the primary drivers for transformation are almost all reactive" – responding to competitors’ advances, pressure from customers for new services and responding to changes in legislation were each reported by 23 percent of respondents. Original ideas from within the business only drive eight percent of organizations’ transformations.

There are technology obstacles as well, of course. "Organizations are still experiencing issues meeting their digital ambitions. Eighty-six percent said factors including reliance on a legacy technology, complexity of implementing technologies, and lack of resources and skills had prevented them from pursuing a new digital service or other transformation project that their organization wanted," the survey report's authors point out.

 

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It's deafening -- the message of "digitally transform or die" has been pounding, like over-amped speakers in a disco, from all corners of the business world. The investment dollars flood in, and digitally inclined technologies are purchased and installed with the hope of overnight miracles. A recent survey finds organizations are spending even more than before on digital transformation efforts, to the tune of $27 million on average over the past 12 months, and up from $24 million last year. That figure is expected to grow to $30 million next year.  But the gains have been relatively meager.

Photo: Joe McKendrick

This and more revelations came from e recent survey of 450 executives released by Couchbase, with 73 percent feeling that the results they have witnessed from digital transformation efforts have falled short of being truly "transformational" or "revolutionary." This is down from 90 percent two years ago, but still represents the majority. In addition, more than eight in ten, 81 percent, have had a digital transformation project fail, suffer a significant delay, or be scaled back in the last 12 months. At least 42 percent said they were behind schedule, or at risk of falling behind, on their most significant digital transformation project.

Pushing the panic button as a result of digitally transform-or-die thinking may also be resulting in reckless decisions as well, the survey's authors caution.  Forty-six percent fear becoming less relevant in the market if they do not innovate, while 42 percent say they will lose IT staff to more innovative competitors. "Seventy-one percent agree that businesses are fixated on the promise of digital transformation, to the extent that IT teams risk working on projects that may not actually deliver tangible benefits."

It's not all gloom, however.  The top benefit respondents reported seeing was more efficient working processes (reported by 58 percent), followed by improved customer experience (50 percent) and increased worker productivity (50 percent). Companies recognize that user experience and customer experience (UX and CX) are the keys to success in today's digital economy, and have applied their efforts there with some success. Seventy-three percent of organizations have made “significant” or better improvements to UX in their organization through digital innovation. Twenty-two percent say they have transformed or completely “revolutionized” UX -- a marked increase over Couchbase’s 2017 survey (15 percent).

Digital transformation may be slow on delivery, but executives see it as the only way forward, especially if nimble disruptors are nipping at their posteriors. Think of the way FinTechs are giving traditional banks and financial organizations a run for their money. Financial services are not the exception, either. Ninety-one percent of respondents said that disruption in their industry has accelerated over the last 12 months, 40 percent “rapidly.” And organizations plan to spend $30 million on digital transformation projects in the next 12 months, compared to $27 million in the previous 12.

So what's gumming up the digital transformation works? The Couchbase survey authors point to the need for top-to-bottom cultural change to embrace digital change.  While IT leaders and teams are incredibly smart, they should only be one part of the process -- something to which many organizations are just starting to adjust. The majority of organizations (52 percent) still have digital transformation strategy set by the IT team, the survey shows.  In addition, "the primary drivers for transformation are almost all reactive" – responding to competitors’ advances, pressure from customers for new services and responding to changes in legislation were each reported by 23 percent of respondents. Original ideas from within the business only drive eight percent of organizations’ transformations.

There are technology obstacles as well, of course. "Organizations are still experiencing issues meeting their digital ambitions. Eighty-six percent said factors including reliance on a legacy technology, complexity of implementing technologies, and lack of resources and skills had prevented them from pursuing a new digital service or other transformation project that their organization wanted," the survey report's authors point out.

 

I am an author, independent researcher and speaker exploring innovation, information technology trends and markets. I am also a co-author of the SOA Manifesto, which out...