Consulting - Digital Transformation

Why Digital Transformation matters?

A business may take on digital transformation for several reasons. But by far, the most likely reason is that they have to: It's a survival issue. In the wake of the pandemic, an organization's ability to adapt quickly to supply chain disruptions, time to market pressures, and rapidly changing customer expectations has become critical.

And spending priorities reflect this reality. According to the May, 2020 International Data Corporation (IDCWorldwide Digital Transformation Spending Guide, spending on the digital transformation (DX) of business practices, products, and organizations continues “at a solid pace despite the challenges presented by the COVID-19 pandemic.” IDC forecasts that global spending on DX technologies and services will grow 10.4 percent in 2020 to $1.3 trillion. That compares to 17.9 percent growth in 2019, “but remains one of the few bright spots in a year characterized by dramatic reductions in overall technology spending,” IDC notes.

What drives Digital Transformation?

An important element of digital transformation is, of course, technology. But often, it's more about shedding outdated processes and legacy technology than it is about adopting new tech. It's also about enabling innovation. 

In the area of government IT, for example, more government agencies are on the verge of realizing the cloud model's full potential - beyond cost-cutting to using cloud for strategic advantage, notes Dave Egts, chief technologist, North America Public Sector, Red Hat.  "Deloitte recently released a list of nine technology trends transforming government, and one, in particular, will be key to enabling the future of technology in government: The cloud as an innovation driver," Egts says.

The prevalence of legacy technology in enterprise IT still hinders CIOs' ability to successfully embark on a digital transformation strategy. As Beth Devin, Managing Director and Head of Innovation Network & Emerging Technology, Citi Ventures has explained, legacy tech can become a costly barrier to transformation. "If you’re spending 70 to 80 percent of the IT budget operating and maintaining legacy systems, there’s not much left to seize new opportunities and drive the business forward. And this expenditure will grow as technology ages and becomes more susceptible," Devin notes. 

Key Trends in Digital Transformation

Here are eight key digital transformation trends that business and IT leaders should be aware of in 2020:

  • Rapid adoption of digital operating models, including integrated cross-functional teams.
  • A shakeout as those that have invested in big data governance and analytics leapfrog their competitors.
  • Better use of AI and machine learning.
  • Continued merger and acquisition activity in the IT outsourcing industry.
  • Consultancies forming new digital partnerships.
  • Expanding public cloud adoption.
  • New digital transformation success metrics.
  • More attention to long-term value of digital intiatives.