The biggest insights and trends in digital transformation for 2019 | ZDNet

Perhaps the biggest surprise of all about digital transformation isn’t that large scale change is hard. It’s safe to say that’s now well established and widely known. It’s how to do it repeatably and sustainably that appears to be the key.

We’ve also learned along the way that digital change is often more about the people involved and affected by it than it is about the technology.

Yet we’ve witnessed a growing number of challenges with technological change as well, with the rule of thumb being the larger, older, and more distant the organization originally was from the technology industry, the more significant the technical challenges have been.

First, the good news. The majority of organizations have now embarked on some form of digital transformation in the last several years. This may be just be in a certain function, like marketing or supply chain, or it might be more coordinated transformation across functions like customer experience or digitization of products and services. Whatever focus it takes, the challenges and top issues have increasingly begun to form a pattern across types of transformation as well as industries and geographies as a whole.

Digital Transformation: A Top Business Priority for 2019

We’ll get those patterns shortly. First, let’s take a brief look at the current motivations for engaging in what is otherwise a difficult, expensive, disruptive, and distracting activity in the first place.

On reason for all the attention: On average, most organizations believe that half of their revenue will come from digital channels by 2020. Furthermore, the World Economic Forum estimates that the overall economic value of digital transformation to business and society will top $100 trillion by 2025. Other similar data are easy to find. These represent vital macroeconomic trends that are the most significant attainable new business potential for the typical enterprise. Any way you look at it, the largest growth opportunities that most organizations can access now is to better seize the white space in these rapidly expanding digital markets.

The latest trends in digital transformation for next year reflect some particularly hard won lessons from the last few years, on both the business and technology sides. It’s worthwhile taking the time to understand how these insights came about, as organizations earlier in the journey can avoid making many of the same painful, expensive, and time-consuming realizations along the way. As they say, one useful definition of ‘smart’ is not making all the mistakes oneself. Wise organizations can potentially cut years off their efforts by understanding what those ahead of them on the journey ultimately learned.

Here’s how the business and technology trends for digital transformation (DT) are shaping up for 2019:

Digital Transformation in 2019: The Business Trends

  • Better integration of digital initiatives. The fragmented and piecemeal efforts at digital transformation of years’ past are slowly becoming part of a portfolio of more integrated digital initiatives. That’s very much not to say they are becoming one digital transformation program. The high failure rates of large technology and business initiatives remains as true today as ever (about 70% of all change efforts, not just digital.) Experienced executives now avoid them studiously. Yet with data showing as many as 85% of all enterprise decision makers believe they have about two years to better integrate their initiatives, there’s little question that coordinated efforts across the enterprise to deliver on consistency, shared planning, economies of scale, and a common data model are key to moving faster and producing better results. I’ve argued the key lessons so far is that loosely coupled enabling capabilities like Centers of Excellence (CoEs) and beyond are better suited to create rich but loosely-coupled collaboration among digital efforts. This increases speed and impact individually through coordinated smaller, lower risk efforts that aren’t very dependent on each other. Expect more top-level but lightweight integration of digital projects and programs in 2019.
  • Making digital transformation scale better yet be more sustainable. One key lesson is that the fastest way to get change to happen is to work with those more interested and motivated in doing so. The change agents discussion in digital transformation has been a consistent one with the many CIOs and other digital leaders I’ve spoken with over the last year. Cultivating and tapping into them at scale is one way to avoid the well-known project burn-out of overly centralized efforts, that tend to peak and valley. And they don’t scale nearly as well. Other emerging techniques for scale and sustainability include self-service partner onboarding and developer networks with APIs, external hackathons to trigger open innovation, and new and improved low-code platforms for citizen developers and data scientists.

Digital Transformation in 2019: The Tech Trends

  • Updating and refining cloud strategy. Upon some combination of cloud services is where virtually all digital transformation efforts will have to flourish. Yet, despite a half-decade or more of investing in various cloud capabilities, from private to hybrid to multicloud, enterprise are often no closer to a clear future strategy today than when they started. This is partially no fault of their own and is due to the rapidly evolving public cloud landscape, turning into a bruising three way competitive battle between Amazon, Microsoft, and Google, with new players likely to make it exciting along the way. With up to 80% of enterprise already multicloud, figuring out what to transform upon is more complex and challenging than ever. Enterprises will be grappling with much more complex and dynamic, even in real-time, multicloud environments in 2019 which some including myself, have called the future of IT. The reality is that organizations are often looking for a single vendor to make it all work, even though that’s no longer a possibility. For 2019, organizations will increasingly look to what I call digital transformation target platforms to provide a primary cloud vendor that has a business and technical blueprint to considerably accelerate digital change, along with multicloud management tools to deal with the rest.
  • More organizations bet on analytics to the highest degree. While the truly data-driven enterprise is still a bit of a ways off until more things are connected (resulting in the quantified enterprise), I see a tremendous interest in data science this year in most organizations as the dawn of an oft-predicted but now arriving new data-driven organization seems among us. This is confirmed through the latest research. Spending on analytics, machine learning, and data science is increasing rapidly, with 60% of CIOs currently growing their budgets for it. I expect a growth in analytics Centers of Excellence in 2019 to provide the tools and teach the organization management data science, as well as intensive hiring and skill building for talent, especially to support digital transformation efforts.

Make no mistake: Addressing each of these digital transformation issues is a tall order, even for very well resourced organizations. Yet failing to do so will leave vital competitive gaps open while missing on the full measure of the very real levels revenue and profitability that more assertive focus on these top digital transformation opportunities and challenges would gain the typical organization next year. It’s one of the reasons why a new mindset is required for digital transformation, to solve problems in digital native ways that traditional IT is not prepared or able to.

For many organizations, it’s also now budget season for 2019. This means it’s time to ensure your organization is focusing on funding for the key items and strategies above that will deliver lasting improvement to your digital transformation efforts.

Finally, I often comment on how much we don’t learn from others’ journeys in the digital space. To better succeed, digital leaders should share their lessons learned and take lessons from others. It’s certainly an era fraught with tremendous opportunity and vast challenges, yet by pooling our knowledge, I believe 2019 will be the best year yet for digital change, transformation, and modernization efforts. Let’s hope we largely address most of the issues above for 2020.

Additional Reading The pressure’s on: digital transformation seen as a make-or-break proposition for IT managers Why CIOs must lead 2019 IT budget planning with digital transformation

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