Digital transformation has become a buzzword in technology. But beyond the buzz, the underlying fundamental need to evolve IT infrastructure is vital.
Worldwide, CEOs increasingly believe that digital transformation is less a choice and more an imperative for survival. Digital transformation is key to creating flexibility—by unlocking value held in data and institutional knowledge stores. Digital transformation brings innovation, improved competitive position, revenue growth, customer stickiness, and streamlined operations. CEO presentations to their boards envision $1 to $7 billion annual economic benefit from digital transformation.
However, IT organizations and business units struggle to implement this vision. In other words, there’s a gap between what CEOs want, and what IT is set up to achieve. But how important is this execution gap? We commissioned Forrester Research Inc. to examine the issue and quantify its impact.
The research, now available here, paints a fairly dramatic global picture of this challenge: C-suite executives feel pressure to transform, largely due to market disruption, but IT is overwhelmed managing and evolving existing systems and lower-level decision makers struggle to use data and analytics most effectively. Some of the research highlights include:
- The C-suite knows that advanced technology is at the heart of digital transformation efforts. Likely because they have a greater sense of awareness of how advanced technology trends will alter their organization’s business priorities.
- Unifying enterprise data with AI and IoT on a common platform helps organizations realize their digital transformation goals faster. Those unifying enterprise data, AI, and IoT on a common platform report high levels of collaboration and agility. They are also more likely to report staying ahead of competitors and meeting the rising expectations of their empowered customers than those taking different technology approaches.
- Deployment methods for these technologies are scattered, with most organizations preferring to shift their multiple technologies to a single platform. These many technologies are deployed numerous ways—either as multiple point solutions, with two or more technologies on single platforms, or as custom-built solutions. With such a scattered technology landscape, it should not be surprising that more decision makers at firms wish they had these technologies on a single, unified platform (54%) than through any other deployment method.
None of this is surprising. CXOs are often insulated from the daily complexities of IT management. They can see the potential upsides of building agility into operational infrastructure, and in adopting advanced technologies.
The challenge is that creating an agile, unified enterprise infrastructure that integrates disparate technologies and data while enabling predictive insights, has been difficult and complex.
There are, however, positive signs. What’s encouraging is how aligned CXOs and IT are in understanding and implementing cloud technologies, CRM, analytics, and distributed data storage. The gap between CXOs and IT starts to widen when the topic is newer technologies and capabilities like predictive analytics and machine learning.
Part of this gap is due to the role IT plays. IT invests significant effort not only in keeping existing systems running but also evaluating and implementing new technologies. This leads to a scattershot and complex enterprise landscape with data in many formats in multiple databases and other sources.
I have seen this play out in organizations as they contend with digital transformation. Often the first attempt is a do-it-yourself (or, do-it-with-system integrators) approach. Many months, or even years later, they have little to show for the investment except brittle and complex systems. As a result, IT fails in tying disparate data sources all together—almost half of the respondents noted this in the Forrester research. That means digital transformation remains a mirage for many organizations—or typically death by a thousand proof of concepts.
A better approach—one that C3.ai customers know well—is to bring a cross-functional team that focuses on integrating multiple technologies on a single unified platform that can still access legacy systems and data, and address new sources of data over time. The Forrester research underscores that this is the approach that most organizations want to take.
I have seen this repeat across industries. With European energy giant Engie, a team of 10 developers got a production AI and IOT application up and running in less than six months. Global manufacturing company 3M used a center-of-excellence (CoE) approach to identify digital transformation use cases, accelerated implementing a platform, and rolled out two production applications in less than 6 months.
What’s notable is that those who have implemented a unified platform collaborate more easily, operate on a single source of truth, and are much more likely to have achieved digital transformation goals. They are able to understand correlations in the data previously not visible when data was siloed.
That seems like an obvious conclusion, but it is not yet in common practice.
What’s clear is that the CEO vision for digital transformation will not change. Fast-moving, nimble competition from unexpected places means there’s no backing down from the mission to bring agility to the enterprise.
IT must consider the path to unlock the value of data with a new platform. This, ultimately, will bring CXOs and IT closer together – making the digital transformation vision more concrete, and enabling IT to deliver on it.