digital transformation

The growth you’re planning for your business may be washed away by digital transformation delays.

A digital transformation is underway. It is revolutionizing the way companies conduct business through every stage of a customer interaction, as well as every business unit and associated process in an organization.

This digital transformation is “the realignment of, or new investment in, technology and business models to more effectively engage digital customers at every touchpoint in the customer experience lifecycle,” says the Altimeter Group. This is, of course, a broad definition that encompasses an extensive swath of organizational processes. It’s about fundamentally restructuring an organization based on new and emerging technologies – especially cloud technologies.

Delays to Digital Transformation Hinder Growth

Company leaders are well aware of the profound impact aspects of digital transformation can have on their organization. An estimated 75 percent of CFOs believe their businesses are missing out on revenue opportunities by not having the right cloud applications and infrastructure in place to support digital business transformation, according to a study by Canopy. In fact, CFOs estimate that their businesses missed out on about $41 million of revenue last year, and 81 percent of both CIOs and CFOs are afraid their business will become uncompetitive, with 75 percent believing this will happen in the next 15 months.

The Canopy study, which was completed in October 2014, surveyed 950 CIOs, CFOs and business decision makers in mid-market and enterprise firms in the UK, U.S., Germany, France and the Netherlands.

The report’s findings reveal that digital transformation is changing all aspects of an organizational structure, from customer service, sales and business development through to innovation, product development and talent attraction.

“Many organizations underestimate the complexity and thoroughness required to execute an on-time transition of existing applications, workloads and data into the cloud,” said Zac Backlin, vice president, Head of Americas for Canopy, in eWeek. “Many key considerations are often overlooked or under-reported by customers, which results in missed deadlines and expectations. Like many non-cloud projects, transitions to the cloud require planning, analysis and proper due diligence for success.”

Most organizations are still learning how to effectively implement digital strategies and technologies into organizational structures and processes. For example, only 25 percent of companies surveyed in the 2014 State of Digital Transformation report by the Altimeter Group have a clear understanding of “new and underperforming digital touchpoints,” yet 88 percent of these same respondents say they are currently undergoing digital transformation efforts. The Altimeter Group’s report surveyed executives and digital strategists from numerous Fortune 500 companies including Starbucks, Motorola, General Motors, Nestle and more.

Digital Transformation through the Cloud

One of the primary technologies to facilitate digital transformation is cloud technology and services. Nearly everybody in the Canopy survey (94 percent) said cloud-based applications and infrastructure are needed to deliver digital transformation, and 68 percent admitted that a lack of cloud investment hindered important digital initiatives.

Although cloud technology has matured, the traditional barriers to cloud investment continue to delay cloud implementation, including security concerns (60 percent), data protection (40 percent), protection of intellectual property (26 percent), and fear of vendor lock-in (36 percent), according to Canopy.

Cloud technology is helping organizations accelerate a digital transformation that provides a competitive edge through business innovation, according to a survey by Harvard Business Review (HBR) Analytic Services. The survey included 750 responses, including 363 members of the HBR Advisory Council and 169 HBR enewsletter subscribers. About half of the 750 business and technology leaders surveyed said their organizations missed out on new technology-enabled business opportunities since their IT department was slow to respond.

Of those organizations who were quick to respond by adopting new digital technology, two-thirds said the confluence of new technologies (including cloud, mobile, data analytics, social networking) transformed customer engagement, employee work processes, product offerings, and business models.

“We’re seeing that (the cloud) has the power to create revenue by making the customer journey effortless across any device, enable faster customer sign-ups so they’ll spend sooner, and support real-time analytics to make more accurate targeting decisions,” said Jacques Pommeraud, Canopy CEO. “The most innovative clients use the power of cloud and large scale analytics to generate new sources of revenue, for example, in manufacturing for the area of preventative maintenance.”

Digital transformation is more than the integration of new technologies to transform business processes: it is a radical restructuring of an organization. As Pommeraud notes, “digital must be in the DNA of every department to help the business maximize market share and revenue.” From the CIO to marketing and sales, every tier of leadership within an organization needs to be invested in change to implement a true digital revolution that yields results.

Chandler Harris is a veteran business and technology journalist who has written for more than 50 different publications.

Related Business Solution:  Business Continuity