What Makes a Difference in Digital Transformation (part 1 of 2)?
In today’s highly competitive business environment, there is no room for a slow-responding IT department or an IT team that is ignoring the authority of technology and digital transformation. Unfortunately, a recent Harvard Business Review Analytic Services research revealed that about half of the 750 companies surveyed had missed out on new business opportunities and failed to innovate quickly because their IT department was simply not fast enough in responding.
Large companies with revenues of $150 million or more participated in the survey. These companies were from Europe (40 percent), North America (40 percent), Asia (14 percent), and from the rest of the world (6 percent). Twenty-two percent of the respondents are key decision makers in IT, 38 percent are taking part in decision-making, and 28 percent are decision influencers.
Interestingly, only 20 percent of the business and technology leaders who participated in the survey said their IT departments are highly responsive. These companies shared they were successful with their innovative and speedy actions in making the transition to digital business. They utilize technology, seize opportunities and embrace digital transformation ahead of their competitors.
In this part 1 of a 2-part article, we will explore the factors that affect the IT department’s responsiveness. We will also find out what makes the companies with quick-to-respond IT take the lead in digital transformation while those with slow-to-respond IT take the back seat.Click here to read more about this article
What makes a highly responsive IT
According to the Harvard Business Review research, it takes more than just having adequate funds and acquiring the right skills for the IT department to become more responsive. These are also important factors:
- Close collaboration and constant communication between IT and other business stakeholders
Respondents from organizations who were leading in technology innovation (20 percent) proved that to effectively leverage IT for business advantage, there must be a strong teamwork and high level of collaboration between IT and business users. On the other hand, about 32 percent of companies with low IT responsiveness say they score poorly in this area.
- Working effectively with a good mix of internal and external IT providers
This approach is proven beneficial to companies that take innovation and faster time-to-delivery a business priority. They make good use of technology partners so that their IT personnel can focus on innovation and leading edge development. The companies who said they chose to fully utilize their internal staff shared that their priorities are security and reliability over speed and innovation.
Undoubtedly, a highly responsive IT department is crucial to a company’s growth and success in this digital economy. The research revealed that for the IT team to achieve a high level of responsiveness, there must be a close collaboration between IT and business users, as well as an efficient coordination with internal and external providers.
How to survive in this era of Digital Transformation
The research showed that leveraging modern technology and responding quickly to new digital opportunities are the strategies to stay ahead of the game, or simply to survive. About 75 percent of the companies who participated in the survey said their business survival greatly depends on their ability to take advantage and make the most of information technology. Both IT leaders and business executives expressed the same thought.
Notably, many customers are now tech-savvy as digital progress transforms almost everything. Customer expectations are accelerating and this trend, together with new technologies, are creating a great impact on all aspects of business. This development is affecting the way companies engage with their customers and the type of products and services they offer. It also has a profound impact on the business models that companies adopt, the business processes they implement, as well as the ways in which employees perform their tasks.
About 68 percent of the respondents said new technologies have made a great impact on their customer engagement. Sixty-four percent cited employee work processes as the second aspect of business being changed by modern technologies. Meanwhile, sixty-two percent of the companies considered their product offerings and business models as the ones receiving the new technology’s impact, while 59 percent cited core business operations and processes.
These days, customer engagement is happening across multiple channels, from online, print, interactive TV, and in physical stores. Companies are using new technologies with their innovative approach to tell stories, embed calls to action and other initiatives to make the customers buy on the spot. These are happening on the front end.
At the back end, digital innovation continues. Companies are utilizing Big Data to have an accurate insight into the market situation, analyze their customer expectations and preferences, and quickly adapt to new customer demands, among other competitive business initiatives.
Technologies and business environment continue to evolve. It’s no surprise then that many enterprises always find themselves catching up with modern technology. Some new players in the market outplay older establishments because they are equipped with new technology while the old companies are struggling with their outdated IT infrastructure. For example, old companies are constrained with slower servers, which translates to idle mobile channels. In the survey, 41 percent of the respondents said their legacy systems use up too many of their IT human resources. Meanwhile, almost one-third of the organizations surveyed said they don’t have efficient mechanisms to prioritize IT investments.
Why do companies miss business opportunities
Sadly, almost half of the respondents said their enterprises have missed opportunities because their IT department was too sluggish in responding. Interestingly, 64 percent agree with this statement.
But what’s hindering the IT department to be highly responsive? Forty-nine percent of the companies surveyed said the lack of bandwidth is the main culprit why they are not able to take advantage of new technologies. The IT team is also busy with works that are not adding value instead of focusing on more strategic activities and keeping up with evolving technology. They are not able to wisely prioritize their time and money investments.
Find out what highly responsive IT departments do in the face of modern technology and digital business in the second part of this article.
Photo courtesy of Detlef La Grand.