The world has been transforming ever since the emergence of mankind, with its digital counterpart rapidly shaping up and building its form to match the urgency created by the emergence and advancement of digital technologies. Expectations are high that the transformation will eventually bring along more benefits into the limelight, with every visible change as it slowly unfolds. It can be stated with assurance that during this time investments on several firms dealing with such developments will be a common sight all around the world, keeping the executives busy in approving and sanctioning enormous budget lists.
The motive is simple, “To make the best out of it”, as in a few months’ matter, they will definitely turn their businesses around. Though the preparations for grasping those benefits are quite remarkable and worth admiring, there is an important thing that should be kept in mind before leaping into action because omitting them might cost the entire opportunity. That important thing is to acknowledge a fact proven right by two of the latest studies about digital transformation. The fact, that these particular benefits are no doubt real for sure, but things like these in digital transformation don’t materialize on their own right after companies hit the action button.
The harsh reality is that the much awaited and expected benefits are nowhere to be found visible. As stated in a well classified report released by the open source, multi-cloud application platform – Cloud Foundry, 501 IT professionals conducted a survey that the benefits are yet to appear for most of the part. The survey bore fruitful results in front of just one out of five IT professionals, acting as decision makers.
It stated that roughly 21 percent of the organizations can actually experience the anticipated benefits of digital transformation. On the other hand, results of the survey also highlighted that about 32 percent of the organizations may hope for these benefits within their next quarter. It further continued by stating that another one of the five decision makers expects that it would take a complete year for the benefits to be realized. The report finally concluded on an additional note where the remaining 25 percent don’t seem to foresee any benefits from their digital transformation for more than a year.
Many other conducted researches have also come across the same conclusion highlighting and proving the fact even more that digital transformation is indeed a game that needs to be played for long. Webtorials published a complete survey of IT professionals solidifying the fact that digital transformation takes a long time to come up with the much anticipated visible benefits. Masergy also conducted its own professional survey showing the long term processing of digital transformation.
The Return of Investment (ROI), as seen by the majority of well-established IT executives and professionals that comprise of 61 percent of the total population of experts in this field, is seen as a more strategic approach to a long term investment plan, than quick returns. They don’t see any doubts arising amidst their belief that digital transformation plays a vital role in assisting the improvisation of a customer’s experience with the company.
The most crucial benefit serves itself as enhanced customer experience, the sole factor that can turn the whole business around, the reason why investing hugely on such transformations are always considered to as playing the trump card. 22 percent of the total respondents cited the same about the ROI as well, whereas 16 percent have shown that it has led to increased competition and challenges to remain in the forefront. Developing and reconstructing business models isn’t uncommon either as 15 percent cited their preference in enabling a new business model.
Every company’s prime concern is the Return of Investment. Executives take action only after they calculate the expected ROI for the step they would be taking. The plans are made and executed accordingly. However, the authors of the Masergy reports observed and stated that measuring the ROI for digital transformation is a bit more complicated and trickier than other major transformations. The experts believe that the impact isn’t immediate but is gains more momentum as time passes, proving to be a strategically advanced decision for future. As described, in words:
“Dollars spent on technology that improve customer experience do not show an immediate monetary or revenue impact. The payoff comes from increased customer loyalty and subsequent sales in the future. The payoff may also come in the form of a happier workforce, thus reducing the expense of retraining and rehiring employees. This is much more strategic than tactical ROI.”
There arises a problematic scenario for a company to gain funding for digital expenditures, only because of the fact that the ROI often takes quite a long time to show up. The sooner the better as we say, but this isn’t the case while expecting the benefits out of a company’s major transformation, that is completely based on a digital platform. This probably highlights time consumption as its major setback. It is an ultimate truth in the business world that Time is Money. It is always ensured that more productive work is performed and completed within less time, to get better ROIs.
This improves the company’s reputation in terms of efficiency, commitment and fulfilling tasks before deadline. Budget commitments are termed as the prime obstacle to digital transformation, as cited accordingly by 22 percent of the professional experts. More obstacles arise apart from the problems faced during the sanctioning of budget commitments. These difficulties keep arising as they are solved one after another.
Gaining support from the executives is a challenging task, as the ROI takes a long time to show up. Proper leadership skills are mandatory for handling such situations, ignoring which gives birth to further problematic scenarios. Another 20 percent of the experts believe that gaining executive support and leadership also become major hurdles in front of a company’s digital transformation. Also, the scarcity of the required skill set in the people handling the process is a worrying factor, as seen among 18 percent of the companies.
The key investment in digital transformation is technology investment and 22 percent of the organizations and experts have agreed on to it.. There are 5 major technology investments that help in digital transformation.
First is installation and use of a Chatbot. Chatbots benefit all types of business, from customer service to unstructured data collection and customer engagement. With more of the target audience becoming accustomed to the concept and involvement of chatbot into conversations, it helps companies understand better what the customers want and why.
Second is Intelligent Analytics, which offers far better insights than regular analytics. This new technology puts the power of artificial intelligence into play to deliver new patterns and chronologically shorten and arrange the growing amount of data, powered by machine learning. Intelligent Analytics also include algorithms, data models, data analysis and data prep. Apps embedded with intelligent analysis help them get plenty of available data as users of the app keep growing.
Third is Internet of Things (IoT), which is worth considering for investment. The Internet of Things becomes more increasingly important to all types of businesses if the products offered are either consumer-facing or business-facing. It provides a more effective way of inventory management in a business and also makes the linking speed of commonly used devices in the interconnected network much faster.
Fourth is Cloud Services, which includes working with businesses that are already plugged into cloud-based service providers. It also includes hives where businesses operate with employees in different remote locations, making the most of the sharing functionality offered by cloud services. Investing in Cloud Technology also includes investing in increasing the cloud storage capacity.
Fifth is Blockchain, which has an incredible and versatile scope of functionality that is bound to benefit all the types of industries, businesses and organizations. This technology includes supply chain management, healthcare, manufacturing, media, data storage, identity verification, government contracts and agreements and many more. As a technology, it has proven to be a beneficial tool in the field of finance. It offers a safe data storage, smooth supply chain operation, all resulting in a secure and smart environment for investing in IoT.
18 percent consider it to be an upgrade to better and secure environment, while 17 percent strongly recommend that it is crucial to implement intelligent systems such as artificial intelligence and intelligent data analytics would help more in gaining greater intelligence in operations.
The Cloud Foundry survey can take to kick-start their digital efforts and points to cloud computing as the most important step enterprises. Present data shows for the first time that most companies moved mission-critical apps to the cloud. Since August 2016, Cloud Foundry started tracking this topic and found out that the number has flipped to the cloud from a majority on on-premises legacy environments. Most organizations with 51 percent of respondents have shifted those apps to the cloud and 45 percent busy in actively maintaining apps in legacy environments. Previously however, the ratio was 53 percent with on-premises to 44 percent in the cloud.