Building a roadmap to digital at scale

Companies are pivoting away from digital for the sake of innovation to digital for the sake of the business. IDC estimates that $1.25 trillion will be spent this year on technology and services for digital transformation (DX).

Now that digital is less an innovation and simply the way to do business, our research shows a clearer view of the digital enterprise moving forward. Becoming the future enterprise is not just a technology transformation; it’s a business transformation, featuring a number of dimensions: culture, customers, intelligence, operations, and work.

However, with digital becoming a necessary norm, the goal posts have changed. Organizations have moved on from items that were major goals 4 or 5 years ago. For example, in the dimension of customers, pursuing a 360, omni-channel view of customers is not enough. The next major goal is using technology to build a real relationship. This means not just personalization, but true empathy with customer needs, while building those relationships at scale.

The digitally determined

Slightly less than half of organizations (46%) worldwide are making the strategic, organizational, technological, and financial changes that set them up to transform their organization in the next several years. IDC has termed these organizations as “digitally determined.” 

But even among the digitally determined with a commitment to a digital future, many organizations are struggling to achieve that future enterprise. 

The consequences of failing at or avoiding digital transformation is far greater than a project failure. Organizations that can align and mobilize their resources will be able to realize the fruits of their innovation efforts, responding to customers' needs with the rapid creation of new products and services. Those that cannot transform will be too busy focusing on internal processes to bring meaningful innovations to market.

The business impact of this digital divide is already clear. IDC’s latest research on over 400 global manufacturers found that over four years, revenue and profit growth increased for those pursuing digital transformation and shrunk for those not pursing digital strategies.

Roadmap planning

But with the goalposts constantly moving, even when the C suite recognizes the need for the systematic enterprise-wide change, putting the pieces in motion is challenging. 

I often speak to technology leaders who are frustrated. Some are dealing with digital deadlock: multiple digital strategies, short-term funding decisions, or a leadership reluctant to make the difficult organizational moves necessary. Others need more direction and guidance on which parts of DX are the most essential for their particular organization and industry, both now and in the future, or how prioritize budgeting, evolve company culture or approach the necessary technology changes.

Leaders like them need clear direction, a roadmap, and peer advice – true intelligence. 

It’s in response to this need that IDC has recently launched a series of planning guides that address key pieces of the digital transformation process — IDC Future Enterprise Planning Guides. We established this planning series to concentrate our industry intelligence, data and advice in a single package on topics such as digital KPIs, implementing AI, developing a digital platform, recruiting digital talent and creating a culture that encourages innovation. They provide guidance, mentorship, peer knowledge, downloadable tools and clear steps. This allows technology leaders to follow the transformation process end to end, or skip over what they’ve mastered to focus on the particular areas they need most. 

For example, while every CIO knows that artificial intelligence could likely transform parts of their business, building the roadmap to integrate and truly benefit from AI is challenging. Knowledge from your peers can be vital in deciding whether to build AI solutions in house, outsource their development or buy third-party AI Services.

The ever increasing complexities of juggling threats, customer expectations, operations, workforce, new technologies and internal culture are only some of the common roadblocks. 

A blueprint for digital

I’ve written previously on the blueprint required for digital transformation.

• A single enterprise strategy. All digitally determined organizations rally around a single strategy as opposed to organizations that are trying to coordinate multiple digital strategies rooted in the various lines of business and functional areas.
• Resoluteness to make the required organizational and cultural changes. Digitally determined organizations are two times more likely to have digital embedded throughout the organization as opposed to residing in a central digital group.
• A long-term investment strategy based on the principle that digital is inherently valuable to the business. Digitally determined organizations are more likely to fund their digital transformation (DX) through a capital budget as opposed to a short-term funding mechanism.
• A single digital platform to scale technology innovations. Digitally determined organizations are focused on scaling digital operations and therefore are working toward a single digital platform.

A cultural reboot is vital to all these changes. It’s almost impossible to transform your organization on an uncoordinated project basis. “Islands of innovation” and technology silos simply do not scale.

Steps to digital at scale

Outdated KPIs, siloes of innovation and siloed organizational structures, overly tactical digital plans, and limited expertise are slowing down the progress and potential investments for digital transformation. This digital deadlock means most IT organizations are not ready to operate at the speed, scale, and scope of the digital enterprise.

Some essential steps in the move toward future enterprise and achieving the blueprint above include:

For laying the essential foundation for a single strategy:

• Choose a change-oriented leader for the DX effort – establishing the leader at a high level messages that DX is a top priority, ensures alignment and creates a sense of urgency.
• Formulate a unified DX strategy and communicate it well, to draw in key stakeholders and ensure efforts are aligned across the lines of business.
• Plan for enterprise-wide transformation by choosing digital capabilities to focus on.
• Build a DX roadmap from IDC’s DX use cases, which include dozens of digital missions and strategic priorities, broken down into long-term program plans and over 700 business use cases by industry and function.

For changing the culture and the organization:

• Create and nurture an innovation culture. To stay competitive, organizations need to learn to innovate more rapidly, stay in touch with customer needs, harness real-time data and decision-making, and incorporate innovative technologies.
• Realistically assess your needed digital talent and skills for the priorities and capabilities you’re focused on. Attracting and keeping the right digital talent is key to successful transformation. Future of work initiatives must be an integral component of an organization's overall digital strategy.
• Change the organizational structure to move away from silos and DX projects toward an embedded digital business that accelerates DX.
• Update the IT organization for the digital enterprise, using a product-centric model that focuses on the business outcomes of IT services for customers.
• Ensure the use of new digital KPIs that enable accountability and expand digital capabilities.

For prioritizing digital and data as inherently valuable: 

• Update budgeting, planning and forecasting systems to account for digital.
• Prioritize and realize an information transformation program – a focused approach to extracting the value of information for your enterprise. Turning data into intelligence fuels rapid decision making, infuses intelligence into operations, and allows better customer experiences and new products and services.
• Understand your data management, analytics and AI technology options and suppliers to intelligently plan the most effective use of data.
• Establish data monetization capabilities, such as data as a service. This is a very different endeavor than traditional data management, and you’ll need a thorough plan to create effective offerings. 
• Employ appropriate AI and machine learning technologies that facilitate the development of intelligent advisory applications. Understanding where these technologies are best used allows self-healing processes and better intelligence.

For creating a digital platform to scale your technology innovations:

• Rationalize and modernize your technology infrastructure to feed your platform. While over 83% of enterprises are working on modernizing, only 35% report that their approach is effective. Establish a “build and deploy” paradigm that harnesses the value of data, develop metrics that measure the effectiveness of your process, and transform governance, talent and processes to accelerate development.
• Rationalize and modernize applications in a similar manner to allow the flexibility needed in the future enterprise, establishing metrics, a clear process, and building the business case for modernization.
• Leverage cloud intelligently and create a cohesive strategy that allows management to navigate the changing cloud landscape while staying focused on business priorities. Early choices can create long-term obligations that potentially limit agility and growth opportunities. Thoroughly work through the economics, technology and supplier options.
• Create a unified digital platform based on an intelligent core that harnesses data management and artificial intelligence. This fully integrated enterprise-wide technology architecture will enable digital products, services, and experiences.

Leaders in every industry and region, from utilities to smart hospitals to libraries are changing the blueprint for the way they operate. Digitally transforming to become an enterprise of the future is vital to staying competitive. It’s not enough to “just do digital” anymore. Organizations need systematic changes across the enterprise or they will be left behind. 

For more information on ways to accomplish enterprise-wide change, see our planning guides website.