The Digital Transformation Journey – Are We There Yet?
It’s an intriguing question. Amazingly, 21% of companies think their digital transformation journey is already finished. Spoiler alert: it most definitely is not! Rather, we all remain in a state of “CONSTANT CHANGE”. While that may sound like a glib oxymoron, it perfectly describes the fast-moving, technology-driven world that surrounds us.
One thing is abundantly clear – constant change is both a blessing and a curse.
It’s a blessing because it presents a plethora of opportunities that forward-thinking smart organizations can take advantage of. It’s a curse because change is tough to keep up with, brings new challenges or risks that have to be managed, and usually demands extra investment.
It’s no wonder that we hear so much about digital or IT transformation these days. IDC forecasts that nearly $1.2 trillion will be spent globally this year on digital transformation. It’s a vital requirement in order to stay relevant in an increasingly digital economy and to gain a competitive edge. Digital transformation is essential for delivering the agility and innovation every business will need for survival and success.
There is definitely a carrot and a stick involved here.
The carrot is that growth and success are clearly linked to the ability to adapt and innovate. High-growth companies are 37% more likely to rely on radical innovations than no-growth companies. But radical innovation is not the only valid approach. Almost three-quarters of all companies depend on incremental innovation rather than radical innovation, preferring a different approach to the risk/reward equation. Regardless of which approach is most appropriate for your business, transformation and innovation are firmly at the core of business growth.
What about the stick? There seems little doubt that doing nothing or standing still is a recipe for disaster. The average life expectancy of companies on the S&P 500 listing is expected to shrink to just 12 years by 2027. We have to acknowledge that companies disappear off this list for a whole host of reasons, but not keeping up with the pace of change and the inability to transform are major factors for many business failures.
It is an interesting coincidence that as the life expectancy of the largest corporations is shrinking toward just 12 years, it’s exactly 12 years since the first iPhone went on sale in 2007 and the era of the smartphone really started.
Today, 81% of Americans own a smartphone and the heaviest users touch, swipe or tap their devices more than 5400 times every day. Mobile devices have become the hub of our interconnected digital experience and they’ve radically changed how the economy works. We use them for everything from banking, entertainment, social media, business interactions, dating and so much more. A decade ago, how many businesses needed mobile apps? And now – which business doesn’t? This is forcing almost every organization to become a software company and helping to drive the transformation imperative.
Last year, I wrote a blog with the title “IT Transformation is a journey, not a destination”. That statement remains absolutely true. Since we’re faced with constant change, transformation must become an ongoing process. We don’t know what’s just over the horizon, what new technologies are just around the corner, or how the competitive landscape will shift. Gartner talks about a “ContinuousNext” approach to transformation, calling for business leaders to be more adaptive to change, to be constantly on the lookout for new practices or capabilities, and continually creating new ways to succeed.
I agree that a culture of perpetual evolution is needed. Organizations need to understand where they are today, evaluate where they must get to, then formulate a strategy and plan to get them there. But that’s not the end of the journey. They have to keep their finger on the pulse, figure out what’s changing next and do it all over again. Rinse and repeat.
If you’ve read this far, you’ll have already guessed that digital and IT transformation are topics close to my heart. You’d probably expect that of someone working for SUSE.
If you’d like to know more, why not invest a coffee or tea break in listening to my discussion with Swapnil Bhatia of TFIR from this year’s SUSECON.