Digital transformation projects hit cultural, tech snags
Enterprise digital transformation projects are snagging on organizational issues and technology infrastructure, opening opportunities for consultative IT services companies.
A batch of reports published this week point to the perils of the digital era. The research reveals a landscape in which digital transformation projects frequently fail and highlights a list of obstacles including network shortcomings, legacy database limitations and spotty top-management support for initiatives. The pressure to transform — coupled with the range of technology options available to do so — complicates matters, as IT leaders and their business counterparts search for a way forward.
“Enterprises are saying today they have more options than ever before and are confused about which way to go,” said Peter Finter, CMO of Couchbase, a NoSQL database provider that conducted a CIO survey to gauge the state of digital transformation. “The role of the consultants is becoming more and more important as they are asked to make recommendations on this plethora of alternatives.”
Eighty-one percent of the respondents to Couchbase’s survey reported a digital transformation project failure, significant delay or scaled-back initiative in the last 12 months. The company polled 450 executives heading digital transformation projects.
The Couchbase survey, published Sept. 4, suggests the urgency of digital transformation and a lack of forethought may be hampering projects. The poll found most organizations pursuing transformation are doing so reactively. The top drivers are responding to competitors’ advances (23%), pressure from customers for new services (23%), responding to regulatory changes (23%) and pressure from the C-Suite (22%). Proactive ideas from within the business influence only 8% of digital transformation projects, according to Couchbase.
The reactive obsession with digital transformation is such that 71% of the respondents believe “IT teams risk working on projects that may not actually deliver tangible benefits,” the survey reported.
“[Enterprises] are doing it because they have no option but to do it,” Finter said. “That is worrisome.”
Also troubling: 52% of digital transformation efforts are the IT shop’s sole responsibility despite the business-wide implications of success or failure.
“IT is still holding the steering wheel of the majority of digital transformation projects,” Finter said. “They need the support of the rest of the board room and the C-Suite.”
A digital transformation strategy revolves around change management and business transformation, so business leaders need to work alongside the technologists, he added.
Digital transformation in business: Tech limitations
Technological issues also contribute to digital transformation difficulties, with network infrastructure one source of concern.
An Accenture survey found many enterprises adopting digital technologies, but far fewer that were completely confident in their networks’ ability to cope with business demands. The survey of 300 senior IT and business executives revealed high adoption rates for IoT/edge computing (77%), big data/analytics (83%) and digital customer experience (78%). But only 36% of the respondents reported being “very satisfied” that their networks have the necessary capabilities to support business needs, according to survey results published Sept. 4.
“I think the infrastructure and network modernization is as important as any of the major digital investments a company makes,” said Charles Nebolsky, managing director and global leader of Accenture’s Network Business.
The networking challenges point back to organizational conflicts. Forty-eight percent of the Accenture survey’s respondents cited “misalignment between IT and business needs” as among the main obstacles. Bandwidth and performance demands outpacing networks’ ability to deliver ranked among the technology-based problems, with 45% of respondents citing that issue.
Nebolsky said the network infrastructure problems stem, in part, from the practice of replacing network devices as they fail rather than investing in software-defined networking and an enterprise platform with built-in automation, analytics and security.
A network approach designed to “keep the lights on” won’t equip an organization to support large numbers of remote employees, IoT initiatives, a growing roster of SaaS applications and corporate systems running on various public clouds, he suggested.
Network outages can bring production to a halt in companies dependent on cloud systems. Nebolsky cited the example of a pharmaceutical company that couldn’t ship products because of a WAN outage that took down its cloud-based labeling system.
Networks don’t have to fail entirely to jeopardize business operations and transformation efforts, however. Indeed, network brownouts have surfaced as a challenge for enterprises. A Netrounds survey found 83% of large organizations have reported economic damage and employee frustration stemming from those events, which the company describes as unexpected and unintentional drops in network quality. Netrounds, which published its findings Sept. 3, polled 400 end user, network operations and C-level respondents in the U.S.
Technologies that enable digital transformation may exacerbate the brownout issue. Netrounds, based in Stockholm, said the adoption of technologies such as hybrid cloud, SD-WAN and network virtualization will likely lead to a sharp rise in the cost of brownouts.
“If the network platform is not running, the business cannot run,” said Cyril Doussau, CMO of Netrounds.
Databases are another technology roadblock in the path of digital transformation projects, Couchbase’s Finter said. He said the database is that last piece of IT yet to be fully transformed. “We are finding moving to a modern database is a transformation effort in its own right,” he said.
Finter pointed to some bright spots in digital transformation, one of which is increased levels of investment. That boost underscores the higher priority of projects.
“The Amazon effect is causing business leaders to realize that digital means disruption,” he said. “Their competition is just one click away. People are now willing to spend more money on these projects.”