In a world where change is a constant, businesses need to evolve to keep pace. The advent of the digital age has been the driver of much change in recent years and many businesses have invested in digital transformation projects in order to not only keep up but stay ahead of the competition.
This year, the COVID-19 crisis threw a curve ball at businesses that no one could have predicted. And the result is that the scale and pace of change has increased beyond anything we have seen before, both at a digital and a wider organisational level.
Accelerated digital transformation for a post-pandemic world
We may not know exactly what the workplace of the future will look like but one thing we can be sure of is that it won’t look like life pre-lockdown.
Any hesitations people might have had about adopting digital technologies pre-pandemic were cast swiftly aside as lockdown forced us to adopt new habits. Now the majority of us are doing our supermarket shopping online and communicating with our doctors over the internet rather than face-to-face. We’re sharing and editing documents via the cloud and meeting with colleagues and clients via video conferencing.
Those who were sceptical before are believers now. And it’s unlikely that they’re going to want to go back to how things were. Employees are going to want to keep working from home. Customers are going to want to keep interacting with brands digitally. Not all, maybe, but enough to make a difference.
If digital transformation was important six months ago, it is essential now. The way we work, the way we buy, the way we sell, the way we support customers has fundamentally shifted. COVID-19 precipitated the change and digital technology has enabled it. It is no wonder that, as of the end of April 2020, more than 75% of businesses were making moves to accelerate their digital transformation plans according to a recent report by BCG.
The twin challenges of greater complexity and reduced budgets
The challenge now is that any digital transformational plans businesses may have had pre-lockdown now have a greater degree of complexity. In the past, CIOs were focused on business-owned infrastructure such as private office networks and data centres. Today they are reliant on infrastructure that is not their own, provided instead by third-party cloud services and fixed and mobile broadband providers.
This requires new practices, processes and tools. Those that exist today - constructed to help IT manage their own infrastructure - will not provide enough visibility, insight and clarity to manage the accelerated digital transformation across all business functions.
So digital transformation is now an urgent priority and it has also become more complex. And yet at the same time, budgets have shrunk. Gartner recently predicted an 8% drop in global IT spending in 2020 due to COVID-19; although cloud spending is set to buck that particular trend.
And underpinning all of this is a very stark reality: the tendency for digital transformation projects to fail - or at least to be perceived as having failed, which is near enough the same thing.
In 2015, John Chambers, former CEO of Cisco Systems, predicted that 70% of organisations will attempt a digital transformation, but only 30% will succeed. It seems he was right. In 2018 the Harvard Business Review estimated that £900 billion of the $1.3 trillion spent on digital transformation is wasted on initiatives that don’t meet their goals - that’s 69% wasted. And a survey of execs by McKinsey in the same year reported that only 30% believed their digital transformation was a success.
Reliable decision-making needs actionable data
The acceleration in the scale and scope of change combined with increased levels of complexity and uncertainty and reduced budgets means that decision-making is more critical and more difficult than ever.
In this context, the need to control risk within the digital transformation process is key. CIOs will need to reassure the rest of the business that the investment they’re making is justified and will deliver strategic business results. And that means not waiting until the transformation is complete before you measure whether or not it’s been a success.
Businesses need to be able to access information in real time. Waiting for the usual quarterly financials or sales figures or customer satisfaction data isn’t good enough any more.
If business leaders are to steer the ship through these troubled waters, they need to be able to set appropriate targets, get timely feedback - days and weeks, not months - measure attainment and gain insight into the cause of any shortfalls in order to adjust course and ensure success.
And that means finding a reliable measurement of success that can be applied at both a digital and a business level.