As we move into the 20s it’s becoming passé to talk about digital transformation as being anything remotely close to cutting edge. Harvard Business Review even recently provocatively asked if business transformation has become obsolete. In a recent interview with the National Retail Federation, Abercrombie & Fitch’s Chief Digital and Technology Officer Samir Desai said, “Moving all of our data into the cloud and centralizing that — that’s kind of table stakes.” Of course a great player rarely buys in for the minimum, knowing that with every shrewd bet (read: investment) they put down will return potentially handsome rewards.
Desai, for instance, realized it was critical for undertaking their comprehensive digital overhaul and modernizing core technology platforms to better understand and interact with customers at every touchpoint, aiming to provide a remarkable experience across all channels. Now the retail giant can leverage first-party customer data to personalize shopping experiences and understand the customer journey more effectively.
CIO.com recently reported on ADP’s aggressive digital transformation that’s paid off nicely: “Its expanded HCM portfolio is served to more than 1 million customers globally, up from 800,000 several years ago, with revenues at $18 billion in fiscal year 2023, up from $13 billion five years prior.”
Both private and public enterprises across verticals are still doubling and tripling down on their transformation initiatives, from Japan and Saudi Arabia, to health systems and more. SNS Insider recently reported that the operational technology market value would increase to an eye-watering $257.7 billion due to transformation initiatives. And time is ticking away — Economist Impact recently reported that in supply chain management, “Those slow to invest in digitalization would see a 23% reduction in their cash flow by 2030, compared with peers that are already investing.”
And yet, even though the global market spending for digital transformation technology and services will reach $3.9 trillion by 2027 — when 70% of projects are projected to fail to meet objectives. Why? And more importantly, how can digital leaders maximize success rates?
Not knowing what you don’t know can kill you
Digital transformation failures can be likened to the Anna Karenina principle: “a deficiency in any one of a number of factors dooms an endeavor to failure. Consequently, a successful endeavor (subject to this principle) is one for which every possible deficiency has been avoided.”
In short there are innumerable reasons for digital transformation failure, and engineering.com catalogued many of the most common in a recent article:
- Slowing project pace
- Deteriorating team morale
- Increasing project team turnover
- Increasing cost with no added earned value
- Complaining stakeholders
- Data issues
- Deteriorating business cases
The article concludes, “By identifying which of these common root causes is causing your experienced gut to be nervous and taking the suggested action, your struggling digital transformation project can deliver the value you planned to achieve.”
Another key issue that we’ve covered in the past at length worth mentioning is technical debt, which given recent commentary resides outside the scope of this article.
But most of the reasons stated above come down to one word: knowledge.
Recently Raconteur pointed out that, “While the technology supremo’s C-level colleagues don’t need a detailed knowledge of the IT they’re deciding whether to invest in or not, they must know enough to make informed choices. So what must they understand when planning a digital transformation? [emphasis mine]”
Simply put, you can’t plan what you don’t understand, and you can’t understand what you don’t know.
But we’re not talking about just any knowledge, but the kind of actionable insights that software intelligence provides. It’s not an overstatement to say embarking on these kinds of transformations without an understanding of legacy software is akin to a sailor embarking on the high seas without a map. Sure you can do it, but…why?
With a wide understanding of the main issues facing a large portfolio or the intricate idiosyncrasies of a home-grown application that software intelligence provides, digital leaders can understand:
- The speed at which a project can be executed
- The amount of research (or lack thereof) a team may or may not need to understand the application, thereby enabling reduction of cognitive load
- The effects changes to an application may mean to the business
- How to best articulate the business case to other members of the C-suite
In practice it means, digital leaders can improve their systems and continuously respond to change with confidence and speed. At base, this is powered by two key resources:
- A single, integrated view of a software portfolio based on facts and auto-recommendations, where one can see where to lower maintenance costs, optimize resource allocation, reduce technical debt, rationalize redundancies, and avoid production outages.
- A knowledge base of application’s inner workings, helping tech leads find the answers they need in minutes instead of days.
In short, this kind of knowledge is unparalleled in equipping digital leaders with the knowledge, insights, and tools necessary to continuously adapt and thrive in an ever-evolving digital landscape, ensuring not only the success of their digital transformation initiatives but also the long-term resilience and competitiveness of their organizations.
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