Despite rising optimism in digital transformation, the vast majority of organizations are still suffering failure, delays or scaled back expectations from digital transformation projects, research from Couchbase has found.
How do organizations set their digital transformation strategy?
In the survey of 450 heads of digital transformation in enterprises across the U.S., U.K., France and Germany, conducted by Vanson Bourne, 73 percent of organizations have made “significant” or better improvements to the end-user experience in their organization through digital innovation.
Twenty-two percent say they have transformed or completely “revolutionized” end-user experience, representing a marked increase over Couchbase’s 2017 survey (15 percent). However, organizations are still experiencing issues meeting their digital ambitions, including:
- 86 percent said factors including reliance on a legacy technology, complexity of implementing technologies, and lack of resources and skills had prevented them from pursuing a new digital service or other transformation project that their organization wanted
- 55 percent said that their reliance on relational databases “somewhat” limited their ability to implement digital transformation projects, while 17 percent said “severely”
- 81 percent have had a digital transformation project fail, suffer a significant delay, or be scaled back in the last 12 months
- 42 percent said they were behind schedule, or at risk of falling behind, on their most significant digital transformation project
- 73 percent said that, while the huge potential of digital projects is often talked about, most of the time they fall short of being truly transformational or revolutionary – albeit a fall compared to the previous two years
At the same time, transformation is not slowing down. Ninety-one percent of respondents said that disruption in their industry has accelerated over the last 12 months, 40 percent “rapidly.” And organizations plan to spend $30 million on digital transformation projects in the next 12 months, compared to $27 million in the previous 12.
“Digital transformation has reached an inflection point,” said Matt Cain, CEO, Couchbase.
“At this pivotal time, it is critical for enterprises to overcome the challenges that have been holding them back for years. Organizations that put the right people and technology in place, and truly drive their digital transformation initiatives, will benefit from market advantages and business returns.”
Organizations are well aware of the risks of failing to digitally innovate. Forty-six percent fear becoming less relevant in the market if they do not innovate, while 42 percent say they will lose IT staff to more innovative competitors, in turn making it harder to innovate in the future. As a result, organizations are pressing forward with projects, perhaps recklessly.
Seventy-one percent agree that businesses are fixated on the promise of digital transformation, to the extent that IT teams risk working on projects that may not actually deliver tangible benefits.
Average spend on digital transformation projects over the next 12 months (millions of dollars)
One key to delivering tangible benefits is ensuring that digital transformation strategy is set with the needs of the business in mind. The majority of organizations (52 percent) still have digital transformation strategy set by the IT team, meaning the C-suite is not guiding projects and strategy that should have a major impact on the business.
At the same time, the primary drivers for transformation are almost all reactive – responding to competitors’ advances, pressure from customers for new services and responding to changes in legislation were each reported by 23 percent of respondents. Conversely, original ideas from within the business only drive eight percent of organizations’ transformations.
“In order for companies to succeed with their digital projects and overcome the inherent challenges with these new approaches, they have to attack the projects in a comprehensive and systemic way,” continued Matt Cain.
“Transformation is ultimately achieved with the right combination of organizational commitment and next-generation technology. Change must be driven across the entire enterprise as a true strategic imperative, not left in the sole hands of the IT team. The best technology will then help companies enable the customer outcomes they desire.”