Digital pressure is building. IDC’s latest digital leadership sentiment survey of approximately 2,000 global digital executives shows that six out of 10 CEOs are under considerable pressure to deliver on a successful digital transformation (DX) strategy. Organizations are making massive technology investments to transform their business, and some are already delivering on the digital promise – the likes of BBVA, Schindler, Adidas, and Kloeckner are demonstrating tangible business results associated with their digital investments. Unfortunately, for most organizations, their technology investments have not always translated into the delivery of business (and indeed financial) outcomes.
Three-quarters of organizations are stuck in the early stages of digital maturity as they struggle to scale their digital initiatives. As organizations look to accelerate out of this “deadlock,” there is a growing understanding that innovation and agility need to become core capabilities of the future enterprise – and a new operating model and technology architecture needs to be put in place to enable this.
Why DX initiatives fail
IDC’s research shows that a lack of integration of the disparate digital projects is the primary challenge for organizations that’s preventing them from transforming their business models to deliver new revenue streams enabled by technology. IDC defines these standalone projects as “islands of innovation,” which are created by diverse line-of-business functions driving new technology initiatives based on the broader organizational strategy.
The first step to avoiding this is to generate an integrated enterprise-wide technology architecture that enables the creation of highly automated and increasingly intelligent business processes such as lead-to-cash, procure-to-pay, total workforce management, design-to-operate, and travel-to-reimburse. However, the creation of these new end-to-end business processes wouldn’t be possible without technology capabilities that enable the seamless flow of data across multiple systems, applications, and digital apps distributed across on-premises, hosted, and public cloud platforms.
Enter the digital platform
These new technology capabilities are increasingly being brought together for organizations in the form of what is being termed the digital platform. This enables the seamless flow of data brought into the enterprise through connected assets, employees, and processes, and links these to the customer (and other elements of the external ecosystem). Below are the three key elements of the digital platform:
Unified data management and analytics
Data management relies on a deep understanding of all data, including its definition, meaning, provenance, lineage, and relationships. To have such awareness of the data, technical metadata needs to be augmented with business, relationship, and contextual metadata. In line with this, it needs to deliver three core data-management competences:
- Real-time insights
- Data intelligence
- Data governance
These capabilities are critical to deliver visibility across business functions to augment an organization’s decision-making ability across the key intelligent business processes of the future.
Integration and extension capabilities
Integration and extension capabilities are critical to drive the business-process orchestration strategy to enable future business processes by providing a unified set of connection points across multiple system applications and digital apps distributed across multiple platforms. Based on these capabilities, the digital platform can be used to fast-track integration and trigger new workflows/business processes leveraging applications that could be a mix of legacy on-premises and SaaS applications.
“Net new” innovation capabilities
The appetite for “net new” digital products, services, and experiences is rapidly increasing. This requires the ability to develop and deploy new software applications (or digital apps) to the market in an agile manner. IDC believes that a digital platform needs to provision these software development and deployment capabilities significantly quicker than in the past, and cloud is the primary delivery model to achieve this.
Concerns in the market prevail around whether digital transformation will deliver on its initial promise. There is a clear requirement for a new approach to underlying technology architectures to support the enterprise of the future – one that increasingly embeds agility and innovation within the core of the operating model. IDC believes that this “new” technology architecture (the digital platform) needs to provide a set of capabilities that enables the orchestration and automation of data-driven business processes that will define “scale” to execute on the digital agenda. The digital platform also creates a launchpad for business innovation capabilities that deliver tangible business (and financial) outcomes, thereby easing the digital pressure building up on CEOs – which could ultimately be the difference between success and failure in the digital race.
To learn more about how to reimagine your business model for a competitive edge, read the IDC Spotlight, “Why Companies Fail at Digital Transformation: Clearing the Road to the Intelligent Enterprise.”
Please listen to the replay of our “Pathways to the Intelligent Enterprise” Webinar, featuring Phil Carter, chief analyst at IDC, and SAP’s Dan Kearnan and Ginger Gatling.