Lack of clarity widespread on digital transformation
21 June 2017 | 0
Digital transformation is not only an opportunity but an imperative, and yet there is much confusion, according to Microsoft.
Citing figures from a Harvard Business Review study, Aisling Curtis, commercial director for small medium corporate solutions and partners, Microsoft Ireland, said that while the vast majority of business leaders (80%) leaders believe their industry will be transformed, less than half have a plan to implement digital transformation.
Other work by the same organ has found that nearly three quarters (72%) acknowledged their business is susceptible to market disruption in the next three years from a new competitor based on their use of insight, data, or analytics.
Furthermore, among what the studies termed “analogue” organisations, more than three quarters (77%) feel that they are not well positioned to use digital intelligence capabilities as a competitive advantage.
Curtis said that here, in keeping with the global trends, research by Amarach commissioned by Microsoft, found that a lot of businesses see a threat in terms of new market entrants, but also from internal issues.
Some 41% saw there was a competitive threat coming from internal issues, such as a lack of the right skills, to slow decision making by senior staff on implementation as major obstacles to digital transformation, while nearly a third (32%) were simply carrying on, unaware of the disruption.
Curtis said that there is much confusion about digital transformation, and what it means, particularly among smaller businesses.
She cites an IEDR report from 2016 which found that 80% of SMEs did not have an online presence, resulting in an estimated €4.6 billion going to other economies due to inability to meet needs here. Curtis said that there was an associated perception with digital transformation, as 43% of SMEs in the Amarach survey thinking that digital transformation was about having a web site or an app.
“What we are seeing from the research is a level of myopia. Although leaders considered themselves as digital disruptors (60%), actually, when we dug into that, it was more like 44% were actually able to keep up,” said Curtis.
In this context, Curtis said that Microsoft wants to help organisations by being clear about what is meant by digital transformation, that it is using technology to transform business models and gain competitive advantage.
There is confusion and myopia, said Curtis, that needs clarity around digital transformation and how customers and organisations can deal with this across a multi-layered approach of customers, employees and innovation in products. It is not just a technology change but a cultural change.
Digital transformation does not necessarily reside with the technologists either.
“What we are seeing is that a lot of the drive for digital strategy and digital transformation needs to be coming from the CEO, it is no longer the gatekeeper, like a CIO or CFO, that is in charge—the influence is very much from a CEO perspective, said Curtis.”
“Now is the time to act,” she warned, “within the next two years—to transform, or be transformed.
However, many organisations will need help to translate that imperative into a strategy.
The critical thing, Curtis argues, is taking into account the cultural as well as the technical, and that is across customers, employees, products and operations.
Microsoft worked with Laya Healthcare, which gained significant advantage in the market by giving time back to their employees, through having speedy access to data, and better reporting and analysis of data to run the business in a more streamlined way, Curtis said.
“That was able to get people back into the business more and have more time to work with their customers. They saw great value and improvement from this,” she said.
However, smaller organisations also see the benefits.
The Irish Music Rights Organisation (IMRO), working with Microsoft partner Spanish Point, implemented an automated system that feeds back royalties for artists. The payments were an ongoing issue for years, in terms of operational efficiencies, said Curtis.
Understanding how digital technologies can benefit the business is key, and often such insight and knowledge can be leveraged from a service partner, said Curtis. She said that many of Microsoft’s independent software vendors (ISV) are moving fast in digital transformation and their experience, combined with a knowledge of their customers’ business, can help to determine where best to start, and how best to develop a comprehensive strategy. The Amarach survey found that ISVs in general are further along the digital business road than most other companies.
Often these insights are about asking the right questions of data to get the right answers for the business. By working with companies that have already achieved transformation for themselves, said Curtis, organisations can get a jumpstart on their own journeys, developing a multi-layered, CIO-driven strategy to change the culture across all aspects of the business.