Most firms find digital transformation goals much easier said than done
Despite rising optimism over the perceived benefits of digital transformation, the vast majority of organizations are still suffering failure, delays or scaled back expectations from digital transformation projects.
Those are among the findings of new research from Couchbase, which surveyed 450 heads of digital transformation in organizations in the U.S., the U.K., France and Germany.
Still, the news was not all bad in the Couchbase research. For example, 73 percent of organizations have made “significant” or better improvements to the end-user experience in their organization through digital innovation. Twenty-two percent say they have transformed or completely “revolutionized” end-user experience. The latter represents a marked increase over Couchbase’s 2017 survey results of 15 percent.
When it comes to hoped-for benefits to organizational efficiency, the results were not so good. Consider:
- 86 percent said factors including the complexity of implementing technologies, lack of resources and skills and reliance on a legacy technology had prevented them from pursuing a new digital service or other transformation project that their organization wanted
- 81 percent have had a digital transformation project fail, suffer a significant delay, or be scaled back in the last 12 months
- 42 percent of respondents said they were behind schedule, or at risk of falling behind, on their most significant digital transformation project
- 73 percent of respondents said that, while the huge potential of digital projects is often talked about, most of the time they fall short of being truly transformational or revolutionary
Despite these struggles with digital transformation efforts, transformation investments are not slowing down. 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.
“Digital transformation has reached an inflection point,” said Couchbase Chief Executive Officer Matt Cain. “At this pivotal time, it will be critical for enterprises to overcome the challenges that have been holding them back for years. Organizations that can put in place the right people and technology to drive their digital transformation in the right direction, will be able to reap the benefits,” he said.
Organizations are well aware of the risks of failing to digitally innovate, Cain noted. 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, in turn making it harder to innovate in the future.
As a result, organizations are pressing forward with projects, perhaps recklessly, Cain stressed. 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.
One key to delivering tangible benefits is ensuring that digital transformation strategy is set with the needs of the business in mind, Cain explained.
The majority of organizations (52 percent) still have digital transformation strategy set by the IT team, meaning the C-suite is not guiding projects and strategy that should have a major impact on the business, the study results revealed. At the same time, 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.
Conversely, original ideas from within the business only drive eight percent of organizations’ transformations, Cain noted.
“In order for organizations to reap the rewards from digital projects, they have to approach them in the right way,” continued Matt Cain. “Transformation is ultimately achieved by the right application of people and technologies, so enterprises must have the technical and business skills to make it truly successful. It needs to be driven by the entire organization as a strategic imperative, not left in the sole hands of the IT team. Organizations must direct their energies in the right way and overcome the challenges they face.”