Why digital transformation alone doesn’t guarantee success

Even before the COVID-19 pandemic, digital transformation was at the top of the agenda for most businesses. After an unforgiving year where every organisation found their digital capabilities undergoing a trial by fire, digitalisation has become an even more pressing priority. Research from IDC estimates that 65 percent of the world’s GDP will come from digital activity by 2022, and global spending on digital transformation efforts will reach $6.8 trillion by 2023.

Software development is at the heart of the digital future. Whatever field a business is in, software is an essential part of daily operations, from producing products to connecting with customers. We have seen a trend of more businesses seeking to develop their own in-house software as part of their digital efforts.

Successful digital transformation also has a major impact on software development itself. Embracing more agile, collaborative strategies aided by the latest tools enables developers to be far more efficient and get their products to market sooner, and with a higher return on investment (ROI).

However, we have found that pursuing digital transformation is not a guarantee of success by itself. A survey of 600 IT and security decision makers we commissioned found that although most respondents were positive about their digital transformation journey, there were significant doubts about the profitability and even security of these initiatives.

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Concerns around digitalisation performance and security

Tellingly, 91 percent of respondents told us they felt they needed to get more out of their digital transformation initiatives. More than half said they had not yet seen the results they were expecting, and a similar number expressed concern about the return on investment from their digital transformation projects. A majority even said they believed that digital efforts to date had had a negative impact on their company’s bottom line.

An expanding digital footprint means a greater attack surface for cyber criminals to exploit. Threat actors have proven to be especially ruthless over the last year in quickly exploiting companies that were left more vulnerable as they transitioned into a more digitally driven remote environment. Nevertheless, our respondents were quite confident in the face of the rising risk, with most (94 percent) saying they were happy with their ability to protect their own corporate intellectual property from threats.

However, confidence was much lower when it came to assuring that software products themselves were secure. Half were concerned about the challenge of releasing products that contained security vulnerabilities.

These issues can sometimes be a result of digitalisation activities being applied in isolation rather than as part of a more unified, holistic approach. For example, in the software development and delivery lifecycle, we often find that security and testing activity are overlooked in the planning stages and “tacked on” at the end of the lifecycle. As a result, these activities can turn into bottlenecks. When this happens, earlier efficiency gains can get lost, costly rework can occur, or products may be rushed through with bugs and issues still present which can lead to low customer satisfaction and increased risk due to security vulnerabilities.

The need for a unified approach

One of the most widespread concerns we encountered through our research was the gap between software delivery and business objectives. An overwhelming 94 percent of respondents highlighted this as an issue, and over half citing concerns about misaligned goals across business, IT and security.

This is another symptom of digital transformation activity that fails to take a universal view. All projects need to be mapped out to account for their impact across the organisation, with a clear understanding of the needs of different departments.

Almost all respondents told us they believed they needed to gain greater visibility into business planning processes in order to produce better outcomes, with most feeling they were not currently achieving this visibility. Among other impacts, more than half (54 percent) were concerned about not being able to meet the needs of their customers as a result.

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Getting everyone on the same page

The key to ensuring a digital transformation project lives up to expectations is to take a holistic, business-wide view from the very start. This means including the entire organisation in the process of setting business goals, including both business and technical teams.

All stakeholders in the company should be given the same access to any data and management dashboards to ensure everyone is using the same information to achieve a shared set of goals.

As projects continue, it is also essential to have processes and software in place to deliver end-to-end visibility across the organisation so that progress and success can be measured accurately. Silo walls need to be broken down so that all departments have the same level of visibility and inclusivity.

Finally, it is important to use this visibility to inform a proactive approach. Firms should invest in the capability to go beyond detecting and reacting to bottlenecks, moving on to generating insights, identifying risks, and predicting issues before they have the chance to affect business outcomes. Waiting for revenue to decline or customer satisfaction to decrease means it may already be too late.

Taking a Value Stream Management (VSM) approach is an effective way of delivering and building on this visibility. VSM focuses on determining the value created by all software development activities and resources, enabling decision makers to determine which areas are delivering the most value to the organisation. The approach also has a strong emphasis on managing and monitoring the delivery lifecycle, enabling the firm to proactively address potential issues and continually optimise processes.

As businesses continue to ramp up their spending on digital transformation projects, it is essential for them to maintain a high level of visibility and ensure that objectives are aligned across the company. Achieving this will make it much more likely that a project will deliver the results the company needs, creating faster and more efficient processes that get software to market quickly without compromising security or quality.

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