Report of digital transformation journey in 2020

Enterprise digital transformation

The enterprise digital transformation journey is well on its way at the onset of 2020. Measured progress is a harbinger for how digital transformation will look in near future, as it will be essential to keep investing and innovating in order to stay ahead. We’ve asked survey respondents about their enterprise’s 2019 digital transformation journey as well as what they expect for their enterprise in 2020. They were asked about top digital transformation initiatives, digital transformation regrets, challenges in investing in new technologies, their mood regarding the digital transformation landscape, and more. Survey respondents include those from Enterprise Digitalization, the Enterprise Mobility Exchange, the AI Intelligent Automation Network, and others who are responsible for identifying what is next in business technology for an enterprise.

Industry overview

There is plenty to be both worried and excited about in the world of digital transformation. To take inventory of the collective mental landscape, we asked survey respondents about which digital transformation concern keeps them up at night:

What keeps you up at night?

These serious concerns are occupying people’s minds, and rightfully so—with so many moving parts in such a fast-paced transition period, a level of unclarity and confusion is to be expected. However, there are also many reasons to be confident and optimistic in this era. Luckily, our survey respondents think so, too. 65.33 percent of respondents report feeling optimistic about the state of enterprise mobility and digital transformation; 25.33 percent feel careful/strategic; and only 1.33 percent feel pessimistic.

Also read: Machine Learning

These results bode very well for the enterprise, as it would be difficult to thrive as a business while being pessimistic about digital transformation.

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Biggest digital transformation regrets in 2019 

Responses were all across the board when survey respondents were asked about their biggest digital transformation regrets of 2019, but some clear, consistent patterns are definitely discernible. Some respondents skip this question or write that they have no regrets that they can think of—we could speculate that these types of responses indicate that digital transformation has not been thoroughly acted upon within these enterprises, but it would be difficult to say for sure. Most regrets, however, have to do with inaction, strategy/planning, app development, and inter-enterprise discord.

Regrets about inaction:

• “Not accomplishing more, faster”
• “Not doing more”
• “Not making next steps”
• “Waiting too long”

Regrets about apps:

• “Outsourcing of app dev”
• “Not as successful as expected”
• “Not implementing more”

Regrets about strategy/planning:

• “Putting in the right strategy and plan”
• “Not 100% sure on tech selection”
• “Chasing too many priorities at once”
• “Missed business unit opportunities”

Regrets about inter-enterprise discord:

• “Unable to convince leadership to move away from the traditional model more quickly.”
• “Not able to create management awareness and acceptance.”
• “Not enough interest from top management.”
• “Too much internal red tape.”
• “Wish leadership understood that modern tech works best only when the necessary culture is in place.”
• “Board support.”

Prioritizing the development of a comprehensive digital transformation strategy will be helpful for next year in terms of combating inaction as well as ineffective mobile app development/implementation. Awareness and education are essential first steps in strategy development; afterwards, you can then align and execute your plan. If there’s a breakdown between awareness and education, then you won’t be able to complete the rest of the process. This sentiment also seems relevant regarding the problem of insufficient awareness or interest coming from top management. Awareness and education both need to occur throughout an enterprise, not just within IT or sales. Implementing a company culture of education will help to give everyone a proper sense of awareness, including those on the corporate management side, which should help lead to more cohesive decision making and digital transformation implementation.

“If you don’t have clear strategy on what you want accomplished in the end, you’re going to get stuck pivoting and taking turns that you didn’t expect. That doesn’t mean you can’t pivot and can’t make adjustments, but you have to know the end goal before you get knee-deep into a deployment.” Jay Klauser, Director of Pre-Sales Engineering, NetMotion Software.

“What we’re trying to do is prove the use case for these initiatives, starting with small initiatives that will have a big impact, but that we know will work and not fail. Knowing that if we can get one win, that’ll lead to two and we’ll just continue to grow and get the buy in for the bigger initiatives. Some of the corporate management- the business folks- they just can’t get above the fray to see this is where we need to go. Getting those small wins provides evidence of the path.” Jim Degliumberto, CIO, Southeastrans.

Top digital transformation initiatives for 2020

Who is pushing or requesting digital transformation initiatives?

At the rate digitalization is occurring, enterprises would be wise to continue developing their digital transformation strategies and investing in new technologies. The push for these new initiatives may come from one of many different areas within a single enterprise; wherever this push comes from often affects how likely it is that such requests will be implemented. 44.16 percent of survey respondents note that digital transformation initiatives are being pushed or requested by the line of business; 31.17 percent say they were coming from corporate management; 16.88 percent say IT; 6.49 percent say sales; and 1.3 percent say HR.

Line of businesses

Line of business driving digital transformation has a lot to do with retaining customers. In order to attract younger customers, it is paramount to prove that your enterprise is digital. Hiring and retaining young talent is another element that causes line of business to put pressure on transformation initiatives. If your enterprise doesn’t have interactive web pages for managing employment status or can’t offer devices on the first day of employment, for example, it may be difficult to keep young talent interested in your business; they could easily accept a different job offer with a more digital company.

Also read: Predective Analysis

While it is no wonder why line of business would be such a big driver for digital transformation initiatives, there should certainly be a stronger push coming from corporate management. In some cases, corporate management may be interested in digital transformation, but there is still often a disconnect between interest and executing a concrete strategy. Similarly, there is also often a disconnect between implementation from corporate management and requests coming from IT, which may account for the low rate of respondents who said that IT is pushing for digital transformation initiatives for their enterprise. Although IT teams are the ones who are up close and personal with both the problems and the possible solutions, they, unfortunately, usually do not have the budget or resources to implement the technology solutions that they see fit. IT departments are usually seen as a cost center; if a company grows between 10 percent and 15 percent every year, the budget for that company’s IT department will likely have only grown by about 2 percent over a ten-year period. In an increasingly digital world, this imbalance is problematic. We would likely see more push coming from corporate management if more weight were given to IT transformation requests, and more resources to IT departments.

Investment despite economy

Despite some inter-enterprise dissonance with determining priorities, most of our survey respondents are still poised to continue investing in new technology solutions in 2020. We asked respondents about their 2020 budgets, the digital transformation components in which they are most interested, their top digital transformation initiative in 2020, and the specific technology solutions in which they plan to invest during the coming year.

When asked if they expect their budget to increase or decrease for new technology solutions in 2020, 57.53 percent of survey respondents said their budget would increase; 32.88 percent said their budget would remain about the same; and only 9.59 percent said that their budget would decrease.

Do you expect your budget to increase or decrease for new technology solutions in 2020?

When asked about the digital transformation components in which they are most interested, 55.13 percent responded with data/analytics; 52.56 percent cloud; 46.15 percent mobility; 41.03 percent AI/ML; 38.46 percent IoT; 38.46 percent apps; 21.79 percent blockchain; 12.82 percent VR/AR; and 5.13 percent other.

In which digital transformation components are you most interested?

When asked about their top digital transformation initiative for 2020, 23.68 percent responded with enhancing cybersecurity; 18.42 percent deploying more mobile apps; 15.79 percent integrating AI; 15.79 percent prioritizing data analytics; 14.47 percent migrating to the cloud; 9.21 percent integrating IoT; and 2.63 percent other.

What is your top digital transformation initiative in 2020?

When asked about the solutions in which they anticipate investing in 2020, 29.33 percent responded with AI/ML; 21.33 percent with cloud; 17.33 percent with mobility; 13.33 percent with apps; 10.67 percent with IoT; 4 percent with VR/AR; 2.67 percent with blockchain; and 1.33 percent other.

In which solutions do you anticipate investing during 2020?

Blockchain

Is your enterprise using blockchain?

“I don’t see the use case yet. I see limited examples of where blockchain can be a benefit- where trust is an issue- where you have massive amounts of data that need that blockchain openness to build trust. But it’s not for everything, yet.” Len Dudis, CIO, Grupo Vidanta.

Also read: Cognitive Computing

Despite the impressive capacities of blockchain, perhaps it is not surprising that it has ranked so low in our survey results as a topic of interest or potential investment for enterprises. While blockchain is, indeed, useful for industries that require a lot of data governance, like healthcare or financial services, there are many other industries for which it is currently less necessary. It may be too early for many enterprises to invest in blockchain, but there is a chance that such an investment will become effectively inevitable. Because not everyone wants to dive so deep into the data—often, people simply want to know that certain transactions are, in fact, happening—that chain of custody can be incredibly useful.

We received some optimistic answers when asking respondents if their enterprise is using blockchain: 14.86 percent say yes; 16.22 percent say not yet but yes in 2020; 40.54 percent say not yet but after 2020; and 28.38 percent say no. It is rather surprising to see that so many enterprises are either currently using or planning to use blockchain in the very near future—because such technology is still blooming, it is possible that these results are somewhat aspirational.

Internet of Things (IoT)

(Part I)

Is your enterprise utilizing IoT?

The Internet of Things (IoT) is a useful resource available to enterprises for broadening connectivity, collecting data, increasing productivity, and more. 60 percent of survey respondents are under the impression that their company is not utilizing IoT in any form, which means there is probably a misunderstanding about what exactly IoT comprises. Though IoT may seem like a high-tech future prospect, it is actually very likely that all companies, including traditional facilities, are already using IoT technology to some extent, even if it is not enterprise-grade (like telephones, elevators, CCTV, and alarm systems.) As well, the pieces of equipment that are maintained by suppliers, like printers, robots in manufacturing plants, delivery vehicles, and anything from Honeywell or Johnson Controls, are all IoT devices because they communicate over the web.

(Part II)

Although most companies are already utilizing some form of IoT technology, there are certainly ways to upgrade to more advanced, enterprise-grade IoT. While IoT technology may not necessarily generate revenue, it will make processes more efficient, which results in cost savings. Making these upgrades is beneficial for many enterprises, but there are variables that may render such a transition unnecessary or not worthwhile for others. However, even if your enterprise isn’t utilizing more advanced IoT technology, you should at least be using IoT in whatever it is that you provide to customers.

“You should turn around and manage the solutions and devices that you sell to your customers. So even if it’s shipping containers, you should be able to give your customers real-time tracking data on that or inventory control for just-in-time shipping of your parts to your customers.” Richard Stiennon, IT Security Industry Analyst, IT-Harvest.

“Most of the stuff you see out there is consumer-grade, reference hardware implementations, reference firmware. There’s not enough profit margin for the post-sales support of patching the firmware and finding and fixing bugs and software, and the companies come and go. So, it’s essentially disposable.” Kevin Baradet, CTO, The Johnson Business School.

Virtual reality/augmented reality (VR/AR)

How is your enterprise using VR?

VR and AR both seem to be less on the forefront of people’s minds compared with other digital transformation components, despite its intriguing and potentially useful capabilities. Only 12.82 percent of survey respondents said that VR/ AR is the digital transformation component in which they are most interested (compare to data/analytics at 55.13 percent.) Similarly, only 4 percent of respondents said that they anticipate investing in VR/AR in 2020.

When we asked respondents how their enterprises are using VR, 52.05 percent report that their enterprise is not using VR at all; 21.92 percent training employees; 15.07 percent on-boarding new employees; 13.7 percent improving security; 10.96 percent testing new employees; 10.96 percent other; and 8.22 percent harnessing data.

Data analytics

What data/analytics strategy has your enterprise embraced?

Which digital transformation solution are you using to gain insight into data?

Gaining insight into data is becoming a top priority for many enterprises. Data/analytics are reported as one of the most interesting digital transformation components in our survey results; as well, many enterprises are concerned about missing opportunities buried in large volumes of untapped data. Coming up with an advanced data analytics strategy will be crucial for any company that wants to move forward in the world of digital transformation.

We asked survey respondents a few questions about their enterprises’ data analytics strategies:

• When asked about what data/analytics strategy their enterprise has embraced, 58.67 percent responded with descriptive analytics; 57.33 percent predictive analytics; 29.33 percent prescriptive analytics; 20 percent none of the above; and 2.67 percent other.
• When asked about the digital transformation solution that they are using to gain insight into data, 30.56 percent responded with AI/ML; 25 percent cloud computing; 16.67 percent none of the above; 15.28 percent IoT; 6.94 percent blockchain; and 5.56 percent other.

“Without data or analytics or key measureables that you can measure your deployment against, it’s really difficult to understand if you’ve been successful or not. It’s almost impossible if you can’t measure it, you can make assumptions, but you can’t validate anything.” Jay Klauser, Director of Pre-Sales Engineering, NetMotion Software.

Concluding state of digital transformation

In order to avoid falling behind in 2020 and beyond, enterprises must take inventory of their digital transformation roadblocks and develop comprehensive strategies to tackle them head on. While budget is always a concern, cutting IT spending and avoiding potentially costly digital transformation initiatives are not paths to success. It will be crucial to stay informed regarding new technologies and innovations, and to adopt the right ones in order to stay ahead.

Also read: State of mobility enterprise