Skip to main content

Why Real Digital Transformation is Hard to Achieve

Becoming a Digital Business is very challenging because it demands new thinking, a willingness to evolve and bold ideas. As market leaders continue to embrace a digital transformation agenda, they're finding that the transition requires significant changes to organizational culture and internal systems.

A recent Gartner survey found that a relatively small number of organizations have been able to successfully scale their digital business initiatives beyond the experimentation and piloting stages.

"The reality is that digital business demands different skills, working practices, organizational models and even cultures," said Marcus Blosch, research vice president at Gartner. "To change an organization designed for a structured, process-oriented world to one that's designed for ecosystems, adaptation, learning and experimentation is hard."

Gartner has identified six barriers that CIOs must overcome to transform their organization into a truly digital business. Savvy CEOs and line of business (LoB) leaders will expect meaningful plans to fix these known obstacles to progress.

A Change-Resisting Culture

Digital innovation can be successful only in a culture of collaboration. People have to be able to work across boundaries and explore new ideas. In reality, most IT organizations are stuck in a culture of change-resistant silos and hierarchies.

CIOs aiming to establish a digital culture should start small: Define a digital mindset, assemble a digital innovation team, and shield it from the rest of the organization to let the new culture develop. Connections between the digital innovation and core teams can then be used to scale new ideas and spread the culture.

Limited Sharing and Collaboration

The lack of willingness to share and collaborate is a challenge not only at the ecosystem level but also inside the organization. Issues of ownership and control of processes, information and systems make people reluctant to share their knowledge.

Digital innovation with its collaborative cross-functional teams is often very different from what typical enterprise employees are used to with regards to functions and hierarchies -- resistance is inevitable.

The Business Isn't Ready

Many business leaders are caught up in the hype around digital business. But when the CIO or CDO wants to start the transformation process, it turns out that the business doesn't have the forward-thinking talent skills or resources that are needed to succeed.

"CIOs should address the digital readiness of the organization to get an understanding of both business and IT readiness," Mr. Blosch advised. "Then, focus on the early adopters with the willingness and openness to change and leverage digital. But keep in mind that digital may just not be relevant to certain parts of the organization."

The Ongoing Talent Gap

Most organizations follow a traditional pattern -- organized into functions such as IT, sales and supply chain and largely focused on operations. Change can be slow in this kind of legacy  business environment.

Digital business innovation requires an organization to adopt a different approach. People, processes and technology blend to create new business models and associated services.

Employees need new skills focused on innovation, change and creativity along with the new technologies themselves -- such as artificial intelligence (AI) and the Internet of Things (IoT).

Current Practices Don't Support the Talent

Having the right talent is essential, and having the right practices lets the talent work effectively. Highly structured and slow traditional processes don't work for digital business. There are no tried and tested models to implement, but every organization has to find the practices that are best suited to their needs.

"Some organizations may shift to a product management-based approach for digital innovations because it allows for multiple iterations. Operational innovations can follow the usual approaches until the digital business team is skilled and experienced enough to extend its reach and share the learned practices with the organization," Mr. Blosch explained.

Change Isn't Easy

It's often technically challenging and expensive to make digital business work. Developing platforms, changing the organizational structure, creating an ecosystem of partners -- all of this effort requires an investment in time, resources and money.

Over the long term, enterprises should build the organizational capabilities that make embracing change simpler and faster. To do that, they should develop a 'platform-based strategy' that supports continuous change and design principles and then innovate on top of that platform, allowing new services to draw from the platform and its core services.

Popular posts from this blog

How Edge Computing and AI Applications Drive IoT

The global pandemic has accelerated the adoption of emerging technologies, including edge computing and TinyML. As more CIOs and CTOs seek ways to capture and process data at the edge of their enterprise IT network, the demand has fueled investment for Internet of Things (IoT) applications. According to the latest worldwide market study by ABI Research, the global edge Artificial Intelligence (AI), Software-as-a-Service (SaaS), and turnkey service market will grow at a CAGR of 46 percent between 2020 and 2025 to reach $7.2 billion. This is 25 percent of the global edge AI market, which is estimated to be $28 billion by 2025. The market is comprised of edge AI chipsets, SaaS, and turnkey services, as well as professional services. As the benefits of edge AI becomes more obvious, enterprises are searching for edge AI solutions that offer low latency and are fully secured to assist them with data-based analysis or decision-making. Edge Artificial Intelligence Market Development "The

How the COVID-19 Pandemic Advanced Telehealth Adoption

The global COVID-19 pandemic has accelerated digital transformation across many industries. As an example, consider the healthcare sector. Some routine medical situations can be diagnosed and resolved online. While the trend was already in motion long before the pandemic arrived, the adoption of telehealth increased rapidly in 2020. Around the world, many governments responded to the disruption and inaccessibility of healthcare facilities by loosening previous regulations and restrictions on the practice of telemedicine apps, and teleconsultations. This decision resulted in the mass adoption of these medical services among patients and providers. According to the latest market study by Juniper Research, telemedicine will save the healthcare industry $21 billion in costs by 2025 -- that's rising from an estimated $11 billion in 2021. This increased app usage represents an anticipated growth rate of over 80 percent in the next four years. Telehealth Services Market Development The co

Hyper-automation Propels Superior Business Process Redesign

When the world was disrupted by a global pandemic during 2020, many CEOs and their board of directors were consumed by reacting to immediate problems. Meanwhile, a few forwarding-thinking enterprise leaders also paused to invest in accelerating their prescient digital transformation agenda. What enables executives to envision an opportunity while others see only challenges? Strategic foresight, and a willingness to embrace the apparent changes that are transforming the legacy status quo. During this period of uncertainty, hyper-automation investment has gained new momentum. Hyperautomation is the application of advanced technologies that augment humans by helping to streamline processes in new ways that are significantly more impactful than the legacy approach. Hyperautomation Market Development The global market for technology that enables hyperautomation will reach $596.6 billion in 2022, according to the latest worldwide market study by Gartner. This is up from $481.6 billion in 202