While emerging tech and revamped processes are crucial, having the right skills on staff is essential to any digital transformation.
Software engineers, cloud computing specialists and product managers remain key roles for companies seeking to roll out new products and services. DevOps leaders galvanize software development by merging development with operations, enabling companies to continuously iterate software to speed delivery.
Data scientists and data architects are also in high demand, as companies seek to glean insights out of vast troves of data, and transformations lean increasingly on machine learning and artificial intelligence.
Plus, IT departments supporting business-wide transformations also require UX designers, digital trainers, writers, conversational brand strategists, forensic analysts, ethics compliance managers and digital and workplace technology managers.
Digital transformations are lagging or even failing for several reasons, including poor leadership, disconnects between IT and the business, lagging employee engagement and substandard operations, according to a report from Capgemini Digital Transformation Institute and MIT Sloan School of Management.
“Our obstacles include the ability to move fast and to innovate while stripping down legacy processes and technical debt investments that have served us well for a long time,” says PenFed Credit Union CDO Bozena Kalita, who is leading the bank through a major technology transformation.
As Genpact’s Tyagarajan sees it, the key culprits of a derailed digital transformation are obsession with big bang change, focus on cost cutting as a business driver, and failure to loop in the business.
“Boardrooms and C-suites talk about digital and there is pressure to show something and show results, which creates wrong expectations about how quickly what can be done and when,” Tyagarajan says. When the investments don’t pay off, people blame the CIO, who finds himself or herself out of a job.
Moreover, approaching digital transformation as a technology journey independent of the business is a recipe for failure.
“If a clever CIO comes up with a clever idea to change something with new tech, that’s great. The next step is bringing it to the business and having the business own the process. When they own the process, you drive end-to-end transformation that includes processes, people, policies and tech,” Tyagarajan says. “The siloed approach always fails.”
For financial services organizations, disruption comes from Silicon Valley more than it does from competitors.
Google, Facebook, Amazon.com and other tech giants drive transformation in consumer experiences that non-digital companies must follow, says PenFed’s Kalita, who is making a platform switch to Salesforce.com and introducing virtual assistants for employees and customers.
“Customers are expecting the same experiences and it's been difficult for us to catch up with these tech giants,” Kalita says. “Whether it’s Bank of America or Chase, every bank has been trying to transform themselves.”
But speed is not a friend for most large enterprises and CIOs know they must carefully calibrate what their digital transformation strategy is against the expectations of their C-suites and boards.
The reality is that most CIOs admit they are optimizing business models with digital rather than creating new business models. Sixty-six percent of CIOs say they are also pursuing “transformation,” compared to 85 percent who say their ambition is simply to use digital to optimize the business, according to Gartner.
“Based on discussions with clients about their actual digital business initiatives, we believe that the number is closer to 10 percent,” wrote Gartner analysts Ed Gabrys and Jenny Breresford in a 2018 research note. “This chasm leaves most enterprises vulnerable to digital disruption.”