Why Digital Transformation must be a strategic priority in 2017
It’s with good reason that Digital Transformation has become the latest watchword in our industry; organisations across the world are finally seeing the profound business advantages of leveraging digital technology.
According to a 2016 Forbes Insights and Hitachi survey of 573 top global executives, Digital Transformation sits at the top of the strategic agenda. Legendary former General Electric CEO, Jack Welch sums up perfectly why Digital Transformation has become a board-level priority: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”
Organisations are seeing such an unprecedented rate of change all around them, that Digital Transformation is no longer a ‘nice to have’; it is a ‘must have’ for corporate survival. To discover the state of enterprises’ Digital Transformation project in 2017, Hitachi partnered with UK technology publication, Computer Business Review (CBR), to survey IT decision makers in its readership on their efforts. While not scientifically representative of enterprises across the UK or Europe, the research provides some enlightening anecdotal evidence.
In this blog, I’ll explore some of those findings and discuss why I think 2017 will be the year of Digital Transformation.
In the UK, just under two-thirds of CBR readers revealed they are through the emergent stages of Digital Transformation, and consider their organisation to be at an intermediate stage in their journey. Only one in ten described themselves as beginners, with one in four stating they are leading the pack when it comes to transforming their businesses.
We’ve found similar scenarios within many of our customers. Some are teetering on the edge, while others, such as K&H Bank, the largest commercial bank in Hungary, are already reaping the rewards. Through upgrading its storage solutions, K&H Bank has halved the time it takes for new business information to arrive in its data warehouse, ready for analysis and cut its data recovery time by half. This enables H&K Bank to get quicker insights into its business and react faster than its competitors.
It is exactly this type of optimisation that is fuelling Digital Transformation. By cultivating improved internal processes and competencies it drives tangible business benefits. In fact, according to CBR readers, just under two-thirds identified improving internal operations as the top driver for Digital Transformation, while a quarter highlighted customer experience.
Of course, while Digital Transformation can provide both optimised operations and improved customer experience, by initially focusing on internal programmes, any issues can be overcome and learnings understood. Take for example, Rabobank in the Netherlands. The finance and services company has transformed its compliance operations by optimising its operations through a new platform. This strategy enables simplified access to structured and unstructured data needed for investigations, easing the regulatory burden on the bank.
This kind of Big Data analysis combined with other technologies such as cloud computing and the Internet of Things (IoT), are at the core of many successful Digital Transformation stories. Cloud computing for example, was cited by 67% of readers surveyed as helping them to progress along their digital journey.
Indeed, our customers have demonstrated a keen interest in cloud technology as an integrated element of a Digital Transformation strategy. Deluxe, a US-based finance organisation, is benefitting from improved flexibility, security and control through Hitachi’s enterprise cloud offerings. By moving to a private cloud within a managed services environment, it now has the technology to integrate acquisitions, deploy next-generation applications and accelerate its time-to-market.
Other technologies, such as data analytics, cited by 20% and IoT cited by 10% of readers, are likely to grow in popularity as more powerful technology is developed. Although Artificial Intelligence (AI) is increasing in awareness, with innovative rollouts from organisations such as Enfield Council, it is not currently a strategic focus for UK businesses as on their Digital Transformation journey - cited by only 3% of readers. This is likely to change however as more and more applications for the technology are discovered.
What our survey highlighted was not if organisations are starting and progressing their Digital Transformation journey, but when and how far they are along the path. That’s not to say it’s easy. But there is help along the way - my colleague Bob Plumridge recently shared three excellent pieces of advice regardless of where you are in your journey. And, most importantly, the rewards are worth it. Improving internal operations and processes will help drive increased innovation and therefore improve customer experience. Embarking on Digital Transformation will also help keep your pace of change ahead of the competition, just like Jack Welch advised.