The majority of organisations are suffering failure, delays or scaled-back expectations from digital transformation projects, research from Couchbase has found. Couchbase undertook a survey of 450 heads of digital transformation in enterprises across the US, UK, France and Germany.
Digital innovation has resulted in “significant” or better improvements to the end-user experience across 73% of organisations. There is also a marked increase in those who say they have transformed or completely “revolutionised” end-user experience (22%). It was just 15% in Couchbase’s 2017 survey.
Reaching digital ambitions
However, organisations are still experiencing issues meeting their digital ambitions, including:
- Eighty-six percent said factors including reliance on a legacy technology, complexity of implementing technologies, and lack of resources and skills. These factors had prevented them from pursuing a new digital service or other transformation project that their organisation wanted.
- Fifty-five percent said reliance on relational databases “somewhat” limited their ability to implement digital transformation projects. While 17% said it was “severely.”
- Eighty-one percent had a digital transformation project fail, suffer significant delay, or be scaled back in the last 12 months.
- Fourty-two percent said they were behind schedule, or at risk of falling behind, on their most significant digital transformation project.
- Seventy-three percent 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. Albeit a fall compared to the previous two years
The digital transformation pace continues
At the same time, transformation is not slowing down. Ninety-one percent of respondents said that disruption in their industry has accelerated over the last 12 months, 40% “rapidly.” And organisations 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 Matt Cain, CEO, Couchbase.
“At this pivotal time, it’s critical for enterprises to overcome the challenges that have been holding them back for years. Organisations that put the right people and technology in place, and truly drive their digital transformation initiatives, will benefit from market advantages and business returns.”
Organisations are well aware of the risks of failing to digitally innovate. Forty-six percent fear becoming less relevant in the market if they do not innovate. Forty-two percent say they will lose staff to innovative competitors, in turn making it harder to innovate in the future.
Organisations are pressing forward with projects, perhaps recklessly. A large majority (71%) agree that businesses are fixated on the promise of digital transformation. As a result, IT teams risk working on projects that may not actually deliver tangible benefits.
Delivering tangible benefits
To deliver tangible benefits, a digital transformation strategy should be set according to the needs of the business. The majority of organisations (52%) still have digital transformation strategy set by the IT team. This means the C-suite is not guiding projects and strategy that should have a major impact on the business.
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% of respondents. Conversely, original ideas from within the business only drive eight percent of organisations’ transformations.
“For companies to succeed with digital projects, businesses have to work in a comprehensive and systemic way,” continued Cain. “Transformation is ultimately achieved with the right combination of organisational commitment and next-generation technology. Change must be driven across the enterprise as a strategic imperative, not left in the hands of the IT team. The best technology will then help companies enable the customer outcomes they desire.”
Enterprise Business: What this means for business?
Businesses in every sector are having to digitally transform as they are challenged to improve business processes. Furthermore, business have to develop new capabilities, processes, operations and business models. Part of this transformation includes digital strategies enabled by new technologies, such as AI, automation and blockchain.
However, a key ingredient, often lost in the transformation process, is people. Digital transformation projects often succeed or fail by the talent available within the organisation. Without great talent the plans fail. And, attracting talent, and keeping it is the most important aspect.
The report mentioned the importance of operations talent as a key factor in the success of transformation projects. Unfortunately, it then fails to explore why.