Year after year, experts predict that within the next 365 days digital transformation will reshape enterprise IT. “Are you ready for digital transformation?” asked Cisco1 four years ago. “Digital transformation will shape 2016,” said IDC2 one year later.
The problem, many businesses have since seen, is that digital transformation isn’t as simple or one-dimensional as it was promised to be. In one 2018 analysis, four out of five businesses said a failure to complete digital transformation3 initiatives would negatively impact their revenue within the next year while a recent Gartner report focused on Australia found that just eight percent of businesses there were harvesting results from digital transformation.
How trends become norms
There are some interesting parallels between the stages of group development and how trends eventually become norms. According to Bruce Tuckman’s theory4, group formation consists of four stages:
- Forming – marked by getting acquainted, confusion and uncertainty
- Storming – disagreement over priorities, tension
- Norming – growing consensus, establishing trust, setting standards
- Performing – successful performance, flexibility and task orientation
To apply this theory to digital transformation, we can say that it has been mired in the first two stages for the past few years. The forming stage was when we first began to hear about the hype of digital transformation and its potential; reality came crashing back in the storming phase, as companies failed to see expected results due to poor data integrity, a lack of appropriate infrastructure and a fundamental lack of understanding around the journey required.
The good news for 2019 is that it’s finally time for norming and performing. In these later stages that now seem accessible to many, companies will get a handle on the tools and skills they need to effectively undertake digital transformation projects and then begin to explore the benefits.
So how do we get from being underwhelmed by the reality of digital transformation to the fulfillment of its promise? Here are five trends to watch for that will fuel the next phases of digital transformation.
1. More clean data fuel
At its heart, digital transformation is about leveraging vast stores of organizational data to improve processes, workflow automation, products, customer and employee experiences and deliver better results. The challenge is that an overwhelming majority of data isn’t accessible or utilizable – and the problem is only getting worse. “Unstructured data is rapidly outgrowing structured data as the main cause of data growth and could form as much as 80-90 per cent of an organization’s overall data,” said a report in Hedgeweek5 earlier this year.
Before businesses can see progress from digital transformation projects, they must first get a handle on this unstructured data. This means leveraging technology that can transform data into unified digitized formats that are free of errors and redundancies, enabling more effective and efficient utilization.
2. Growth and optimization of robotic process automation (RPA)
One of the great promises of digital transformation is that it will allow businesses to optimize resources and grow outputs via robotic process automation (RPA). But while interest and adoption are growing, RPA is yet another example of advances that aren’t yet delivering. According to a new report by Gartner6, through 2021, 40% of businesses will have “RPA buyer’s remorse” due to problems such as misaligned and siloed usage and inability to scale. As businesses improve their ability to leverage a wider range of data sets – i.e. via a reduction in unstructured data – we predict they will begin to realize the greater potential of RPA.
3. Eliminating technical debt
It’s not just an inability to properly leverage data that is holding businesses back on the digital transformation front. Complex networks of legacy systems further exacerbate the problem, contributing to silos, fragmented formats and ineffective support for new software and processes. In the world’s largest survey on IT leadership7 released earlier this year, researchers from Harvey Nash and KPMG noted that “unless (IT leaders) fix the foundations, and
modify that foundation infrastructure, their ability to really adopt technologies such as artificial intelligence and automation will be constrained.” Cloud-based applications and services can help speed up this process, reducing the costs and accelerating the speed of implementation.
4. Businesses will reconnect with their human side
While you might expect that the proliferation of robotic process automation, AI, machine learning, and other advances will take the human element out of delivering customer experiences, we predict that these will create new opportunities for businesses to better serve their customers. An ad series released recently by Intact Insurance depicts employees experiencing numerous worst-case scenarios in order to learn how to empathize with their customers. While the situations presented are funny because they are so extreme, the ads highlight the importance that businesses stay in touch with their human side as a means of staying competitive.
Fortunately, the efficiency gains and other benefits of digital transformation support this. From freeing up time to improve the training and delivery of customer services to underlying data-based processes that can help employees better know and serve their customers, progress on the digital transformation front will also help businesses get better at providing a human touch.
5. Regulatory headwinds continue to grow
Europe’s sweeping new data protection law: GDPR, was the talk of 2018, and we don’t expect that buzz to die down anytime soon. The impact of data protection laws on the enterprise will likely only just have begun as we enter 2019 and Europe begins to enact penalties for violators. Meanwhile, California is among the U.S. states rolling out data privacy regulations of their own, having recently passed the California Consumer Privacy Act of 2018, which will take effect in 2020. If you haven’t already done so, expect to spend a great deal more time and thought looking into how you can reduce your PII (personally identifiable information) footprint in 2019.
The forming-storming-norming-performing theory of group development can also be applied to the adoption of new technologies. The state of digital transformation in recent years reflected the forming and storming stages – getting acquainted with the notion of digital transformation and identifying tensions and challenges that stood in its way. In 2019 we expect to see a shift into the norming and performing stages – setting standards and putting in place the mechanisms for digital transformation and then finally starting to see its long sought-after results.