Digital is at the heart of businesses and it’s a reflection of the fact that customer behaviour is changing.
We recently conducted research into how organisations approach and deliver digital transformation, and found 84 % of businesses say that their customers expect them to be more digital.
However while this tells us that digital transformation couldn’t be more vital, 7 in 10 agree that shadow digital projects are the only way that parts of the organisation can complete meaningful innovation.
And yet these shadow digital projects often remain invisible to the IT team and the wider business. Without a joined up digital strategy, businesses risk losing money - and ground - to their competitors.
How can CIOs develop a digital strategy that keeps up with the business' needs and ensure that the whole organisation is engaged?
PACT – four levers for an effective digital transformation strategy
Lines of businesses resorting to shadow IT to drive business innovation suggests UK organisations are struggling to deliver on digital, and research commissioned by Fujitsu found that UK businesses have been losing average of £480,000 per cancelled project.
We wanted to dig a little deeper into why the failure rate is so high and costly, and why so many innovators within the organisation are taking matters into their own hands.
Our research – the Digital PACT – examined how businesses are performing against the four strategic elements Fujitsu believes are required to digitally transform successfully: People, Actions, Collaboration and Technology. These give four areas CIOs can focus on to ensure full their digital strategies are well-rounded, effective and, ultimately, successful.
Let’s break those down.
UK businesses consider people the most important part of the digital transformation mix (36%), and the vast majority (92%) are taking steps to increase their access to digital expertise and address their skills gaps. The most popular measure is targeted recruitment (49%), followed by apprenticeships (40%).
However, 82 percent admit that the lack of skills in their organisation is the biggest hindrance to addressing cyber security.
Looking to the future, skills will continue to be a key business issue; 93 percent say upskilling staff will be vital to their organisation’s success in the next three years, while 83 percent believe artificial intelligence will transform the skills needed by 2020.
Looking at actions, meaning the processes and behaviours needed to make digital transformation work, 94 percent of UK business leaders say their organisation has a clearly defined digital strategy, while 81 percent are confident that the rest of the business knows what it is.
However, three quarters (74%) say that projects are often undertaken that aren’t linked to the overarching business strategy. It’s important than that the perception of awareness of an organisation’s digital strategy is matched with reality. Communication is key, as is empowering teams with the tools that will help them innovate in a way that ladders up to that core objective.
UK business leaders are taking positive steps in collaboration, with most businesses undertaking or planning to undertake co-creation projects (65%), with partners including existing customers (53%) and technology experts (51%).
Surprisingly, 77 percent would even be willing to share sensitive information as part of these co-creation projects; however, 74 percent say that a lack of success within a quick timeframe would quickly put an end to their strategic partnerships.
It’s important to select partners that feed the creative spirit of the core team, but also that can help set accurate timelines that let lines of business and the board see the strategic approach being taken to achieving digital transformation.
And when it comes to technology, UK business leaders are planning to implement a wide range of systems; in the next 12 months, over half are planning to introduce cyber security solutions (51%) or the Internet of Things solutions (45%).
More than other nations worldwide, UK businesses underline the importance of artificial intelligence to their financial (56%) and operational (53%) success over the next ten years. Indeed Theresa May recently suggested that using the technology could allow at least 50,000 people each year to be diagnosed in the early stages of cancer.
However, despite 84 percent saying the ability to change will be crucial to their survival in the next five years, 67 percent are concerned about their organisation’s capacity to adapt to technologies like artificial intelligence.
Understanding which technology works for your organisation forms part of the Action element of PACT, but selecting the technology that will solve those needs best requires consideration and attention. A digital transformation programme permits the exploration of new technology, and with the applications of AI being so diverse, it’s worth thinking about how it can be implemented now before it’s too late.
Will this mean the death of shadow IT?
In recent years it has been up for debate as to whether shadow IT is a bad thing or not – staff going rogue and buying IT services unauthorised, without any consideration made to things like data security and integration.
But a ban on shadow IT is not only pointless, it’s a ban on innovation. If companies haven’t got any shadow IT purchases, then they should be worried. Either companies don’t have a handle on what’s going on or, worse still, their staff aren’t motivated enough to improve how they can harness IT to help the business. Most of the time when lines of business take IT into their own hands it’s because they want to move the business forward or make their own lives easier and more efficient.
Shadow IT can be good for a business’ digital enablement, as it is essentially the democratisation of IT in practice. Employees want to harness digital technologies to improve productivity, launch new products or services or improve collaboration for instance.
The difference is that they do it in a way that is consistent with the digital strategy that is set by the CIO, and backed by the organisation. The role of IT leaders is therefore to make sure that technology investment is implemented through a form of digital enablement that always has a clear line of sight back to the organisation’s digital transformation goals.
James Maynard, Offering Management Director – IoT & Innovation at Fujitsu
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