DT Is a People-First Initiative

Its success or failure ultimately depends upon the people involved.

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Digital transformation is the ‘continuous process by which enterprises adapt to or drive disruptive changes in their customers and markets (external ecosystem) by leveraging digital competencies to create new business models, products, and services,’ according to IDC. However, as much as DT -- also known as DX, digitization and Industry 4.0 -- is driven by cloud computing, Internet of Things (IoT), big data and analytics (BDA), mobility, social media and security, it is a business phenomenon, and its success or failure ultimately depends upon the people involved.

DT is game-changing: Benefits can include a 33% increase in speed to market, 40% increase in customer satisfaction, and a 37% increase in new business revenue. On average, companies that embrace digital transformation are expected to increase annual revenues by 2.9% and reduce costs by 3.6%. However, “first movers” ‘are far more likely to be forecasting both revenue gains of more than 30% and cost reduction of more than 30% at the same time’.

That’s what I call an extinction-level event, and DT budgets and forecasts reflect the digital imperative. Worldwide spending on digital transformation technologies are expected to exceed $1.2 trillion this year, and continue at a compound annual growth rate (CAGR) of 17.9% over the 2015-2020 forecast period, reaching $2.0 trillion in 2020.

But throwing money at DT is not the answer: the failure rates for unsuccessful digital transformation projects can be as high as 84%, although IDC has predicted that only 70% of siloed digital transformation initiatives will fail. Cultural resistance to change was the main barrier to digital transformation, with legacy IT systems and retaining critical talent ranking second and third, respectively.

“One of the things that our research and expertise consistently show is that shifting people and how they need to operate differently are where some of the big challenges are coming from, as more and more companies try to digitally transform,” said IDC’s Shawn Fitzgerald, research director, worldwide digital transformation strategies. Cultural changes and best practices really do matter, agreed Glenn Yorkdale, senior manager of security consulting services for Neustar, Inc., a global information services provider with more than 19 years of network management and security experience.

“I can think of a number of cases where customers have adopted digital technologies, i.e., moved their entire business to the cloud and figured we don’t have to worry about it as much,” he said. With more than 2,500 enterprise and government customers, three hundred million consumers of its security offerings, and managing more than 10% of all global DNS (website) traffic, Neustar understands that technology by itself isn’t the answer.

We do risk assessments and find outdated servers connected to networks, users who are no longer with their employers and late or deferred patch management, said Yorkdale. “People have gotten away from best practices.” Every company is a technology company, and success and security depend upon the right products, processes, and people working together, he added.

“Dominos’ CEO said we are a technology company that makes pizza. Every company should think of themselves that way,” said Yorkdale.

Author Bio: Steve Wexler has more than 30 years of experience writing about the IT industry primarily for enterprise, SMB and channel, as well as marketing content for IT vendors.


Copyright © 2017 IDG Communications, Inc.