RESEARCH REPORT

Busting Through Digital Transformation RoadblocksNew research commissioned from Vanson Bourne by SnapLogic uncovers the common digital transformation missteps businesses make and the keys to getting it right

RESEARCH REPORT Busting Through Digital Transformation Roadblocks

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ContentsDigital transformation defined 4

Goals and expectations 4Falling short of expectations 4

Organizational set-up 5Strategy and planning 5Who leads digital transformation 6When to involve other departments 7

The tech equation — out with the old, in with the new 7Blueprint for success 8

Include the right people 8Develop a comprehensive and flexible plan 9Invest in technology 9

Research scope and methodology 10

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IntroductionDigital transformation doesn’t happen overnight, and there’s no silver bullet for success.

People, processes, and technology must all align in order to achieve impactful results. However, many organizations admit to falling down at the initial planning stage, failing to even get out of the gates. When plans get back on track, they find that without the necessary skills, technology, and oversight from authority within the organization, the road to digital success can be uneven at best.

Based on new research commissioned from Vanson Bourne, who surveyed IT Decision Makers (ITDMs) at medium and large enterprises across the US and UK, this research report delves into the digital transformation hurdles causing businesses to stumble and the steps organizations can take to stay the course and achieve success.

Key findings

y 40% are either behind schedule with their digital transformation projects or haven’t started them yet

y For organizations already on or planning digital transformation, 69% have had to reevaluate their digital transformation strategy

y 59% agree that they’d do it differently if given another chance

y Legacy technology or a lack of the right technology is causing problems for 55%

y 31% stated that data silos were causing a problem

y Internal politics and cultural resistance are causing issues for 51%

y 58% admitted that there is confusion across the organization around what they’re trying to achieve with digital transformation

y 55% noted investment in the right technologies and tools is one of the most critical steps to digital transformation success, and 52% advised involving all departments in strategy development

y 68% see artificial intelligence and machine learning as vital to accelerating digital transformation projects

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Digital transformation definedAcross the globe, businesses are undergoing digital transformation and in recent years it’s become a catch-all term for using digital technology to drive innovation across all areas of the business. At its core, digital transformation is fundamentally about changing how a business operates, improving existing processes and introducing new business models, which then enable the business to deliver greater value to its customers.

Goals and expectationsOrganizations have high hopes for their digital transformation projects. Respondents in our study whose organization is on or planning its digital transformation journey expect an estimated increase in revenue of 13% and a decrease in operating costs of 14%, on average, from their digital transformation projects. Greater operational efficiencies are also predicted, with respondents expecting business speed and agility to increase by 16% and development time for new products and services to be reduced by 15%. And on top of these benefits, respondents speculate that customer satisfaction should increase by 18%, on average (Fig 1).

Expected achievements from digital transformation

Figure 1: Analysis showing the average percentage change expected to be achieved for

the above as a result of digital transformation. Asked of respondents whose organization

is on its digital transformation journey, or is planning it (491)

With the allure of such significant business impact, it’s unsurprising that 98% of ITDMs surveyed are committed to digital transformation, with their organization already on the journey or planning it (Fig 2 — page 5).

Falling short of expectationsHowever, it’s not a bed of roses for many. In fact, 40% of respondents’ organizations are either behind schedule with their digital transformation projects or haven’t started them yet (Fig 2 — page 5). This is worse in the UK (50%) compared to the US (34%). Only 4% of respondents across both geographies are ahead of schedule with their digital transformation.

13%

13%

14%

16%

18%

15%

Increase revenue by...

Increase market share by...

Reduce operating cost by...

Increase business speed and agility by...

Improve customer satisfaction by...

Reduce the development time for new products/ services by...

RESEARCH REPORT Busting Through Digital Transformation Roadblocks

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Where organizations are on the path to becoming more digital

Figure 2: “Thinking about the ongoing, widespread adoption and application of digital

technologies (commonly known as ‘digital transformation’) within organizations and

across industries today, where do you see your own organization currently when it comes

to becoming more digital?” Asked of all respondents (500)

Additionally, 30% of those currently on their digital transformation journey are not confident or only partially confident in achieving their digital transformation goals, while 69% have had to reevaluate their digital transformation strategy, and 59% agree that they’d do it differently if given another chance (Fig 3). These sobering responses suggest that digital transformation might be proving to be more challenging than they had originally envisioned.

We are ahead of our schedule when it comes to becoming more digitalWe are right on schedule when it comes to being more digital

We are behind schedule when it comes to being more digital

We have not started to become more digital yet, but are planning our approachWe have not started to become more digital yet, and have no plans toWe have always been a 100% digital business

4%

33%

55%

5%

1% 1%

Organizations that would start their digital transformation again

59% agree that...

Figure 3: Analysis showing the percentage of respondents who agree that if they could

start their organization’s digital transformation again, they would do it differently.

Asked of respondents whose organization is on its digital transformation journey, or is

planning it (491)

So where are organizations going wrong?

Organizational set-upStrategy and planningA critical aspect of any digital transformation is first getting the right strategy and plans in place. But, when asked about the biggest challenges they’ve faced, 44% admitted that short-term thinking often prevailed over long-term planning and a lack of a formal strategy or plan was a significant inhibitor slowing their progress (Fig 4).

... if I could start my organization’s digital transformation again, I would do it dierently

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The biggest challenges to digital transformation

Figure 4: “What are the biggest challenges that your organization has actually

experienced in trying to undertake a successful digital transformation?” Asked of

respondents whose organization is on its digital transformation journey, or is

planning it (491)

Additionally, more than one in five (21%) of those on their digital transformation journey say that their organization ran an unsuccessful pilot before rolling out the initiative to the wider business, but powered through with the digital transformation regardless, while a further 20% didn’t run any kind of test phase at all (Fig 5). There’s no doubt that this lack of effective planning, preparation, and course-correcting ahead of a full enterprise-wide rollout is a contributing factor to why a number of organizations are struggling with their digital transformation efforts (Fig 2).

Piloting digital transformation

Figure 5: “Before undertaking an organization-wide digital transformation, did your

organization test or pilot the program in one part of the business first?” Split by country,

asked of respondents whose organization is on its digital transformation journey (464)

With issues like this, it’s no surprise that organizations are underestimating how long digital transformation should take. Respondents estimate that the journey should be three years, on average. However, when thinking about how long digital transformation in their organization is actually going to take, respondents estimate four years, on average — 33% longer than anticipated.

Who leads digital transformation?Beyond a lack of planning, internal politics (34%), a lack of centralized ownership (22%), and lack of senior management buy-in (17%) were identified as significant blockers to digital transformation.

The most common candidates leading digital transformation initiatives are the Chief Technology Officer (39%) and Chief Information Officer (27%), with only a minority of organizations (7%) having a dedicated Chief Digital Transformation Officer leading the journey (Fig 6).

Yes, and it was successful

Yes, it was not successful but we continued anywayNo, we discussed it but decided against it

No, we did not discuss it

Don’t know

Total US UK

55%

21%

13%

7%4%

61%

18%

12%

5%2%

46%

25%

14%

9%

7%

55%

5%

31%

33%

33%

34%

44%

51%

Over reliance on legancy tech OR Lack of the right technology/toolsInternal politics OR Cultural resistance

Short term thinking over long term planning OR Lack of formal strategy/planLack of dedicated budget

Lack of the right in-house skills

Lack of central coordination/ownership OR Lack of senior management sponsorshipData silos

There are no challenges to digital transformation

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Highlighting a possible disconnect between senior leadership at organizations, 65% of those we surveyed admitted their vision of digital transformation could be better aligned with their CEOs. Notably, only 10% of respondents said their CEO leads their digital transformation initiative (Fig 6). All of this signals that better top-down alignment on vision and strategy, and more frequent communication and collaboration, could improve transformation success.

When to involve other departmentsThis disjointedness in digital transformation management is also compounded by the fact that 54% believe digital transformation doesn’t need to be enterprise-wide. Often, digital transformation happens in pockets of the organization, with limited visibility to others across the whole of the enterprise. Furthermore, 58% admitted that there is confusion across the organization around what digital transformation will achieve. This is unsurprising when not all departments are deemed necessary to be involved, or departmental projects are not communicated effectively across the organization.

The tech equation — out with the old, in with the newEven with the right strategy in place, businesses are still struggling to overcome key obstacles in the road to digital transformation.

When asked what was stalling their digital transformation projects, 55% noted that a reliance on legacy technologies and/or a lack of the right technologies within their organization was holding them back. In a related finding, 31% stated that data silos were causing a problem (Fig 4), an expected issue given that the nature of legacy technology lends itself to disconnected systems.

These disconnected systems are making the road to digital transformation incredibly difficult. To try and tackle this, respondents are on average spending 8% of their time at work connecting and integrating various data sets, apps, or systems, and a similar amount of their time building (6%) and maintaining (6%) their own APIs or custom code. While this may not sound like a lot, it adds up quickly. On average respondents estimate that data silos are costing their organization $5,303,787 in technical debt (Fig 7), something no organization wants to confront while undertaking a digital transformation.

Who is leading digital transformation

Figure 6: “Who is currently leading your organization’s digital transformation and who originally led it?” Asked of respondents whose organization is on its digital transformation

journey (464)

No one inparticular is/was leading...

Chief Data O�cer

Chief Information O�cer

Chief Technology O�cer

Chief OperatingO�cer

Chief Financial O�cer

Chief Executive O�cer

Chief Strategy O�cer

Chief MarketingO�cer

Chief DigitalTransformationO�cer

Originally led it Currently leading it

5%

2% 1% 2%

3% 4%

10%

10%

2%

0%

5%

3%

26% 27%

33%

39%

6% 6%6% 7%

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Estimated financial cost from data silos

Figure 7: Analysis showing the estimated annual financial cost to respondents’

organizations as a result of siloed data, split by country. Asked of all respondents (500)

Beyond the technology itself, skills are also causing a problem for 33%, who stated that they lack the right skills within the business to effectively support digital transformation (Fig 4). Modern, easy to use, self-service technologies that can be used by teams across both IT and lines of business offer a remedy to some of these challenges.

Blueprint for successWith so many issues tripping up digital transformation progress, it’s unsurprising that 59% of surveyed ITDMs would undertake their organizations digital transformation differently if they could start again. But these hurdles provide valuable lessons for those in the early stages of their journey.

When asked what they perceive as the critical steps to enabling digital transformation, the responses from ITDMs fell into three distinct categories – people, strategy and planning, and technology (Fig 8).

The critical steps to successful digital transformation

Figure 8: “What are the most critical steps to enable a successful digital

transformation?” Combination of responses ranked first, second, and third. Asked of all

respondents (500)

Include the right peopleMaking sure all the right people are involved should be one of the first steps of any digital transformation process. Not only should senior management buy in to the project before it begins, but a board or c-level sponsor must be intimately involved in the project to ensure alignment with broader business goals and proper communication to other senior leaders.

$5,3

03,7

87

$5,4

56,7

12

$5,0

43,5

10

Total US UK

55%

52%

38%

35%

33%

30%

24%

23%

8%

Invest in the right technologies and tools

Involve all departments in developing a strategy

Invest in sta� training

Draw up a comprehensive, yet flexible/adaptable budget

Obtain senior management buy-in

Pilot the project in one part of the business �rst

Communicate strategy and goals with employees

Assign a board-level or c-level sponsor to the project

Communicate plans with customers

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However, it’s not just at the beginning of transformation that people within the business need to be considered. Throughout the process, businesses need to make sure they are communicating both the strategy and goals of digital transformation with all employees so they understand their role in its success. Businesses need to also invest in staff training, upskilling, and bringing teams across the business up to speed on using the new tools, systems, and processes that are being introduced.

Develop a comprehensive but flexible planArguably the single most critical part of any digital transformation, strategy development should involve all departments in the business to ensure that it meets the needs of each team. As part of this, those leading the initiative need to not only outline how the transformation will roll out across the business but also draw up a comprehensive, yet flexible budget to support the resources needed to execute the plan at various stages of the journey.

Once a strategy and plan have been defined and signed off by the board, digital transformation should commence with a pilot project in one part of the business first. Taking lessons from those who have hit obstacles, it is important that the results of this pilot are measured and evaluated, and plans are amended as needed before expanding the program. Those who forge on without consideration for the pilot results are only going to damage their own progress.

Invest in technologyTechnology is at the heart of digital transformation, a statement reflected by 55% who noted how critical it is to invest in the right technologies and tools for digital transformation to be a success. The promise of new technologies in particular are seen as having a significant impact on digital transformation. Case in point: 68% see machine learning and artificial intelligence as vital to accelerating digital transformation projects (Fig 9).

AI is accelerating digital transformation

68% agree that...

Figure 9: Analysis showing the percentage of respondents who agree that AI/ML

assistance is vital to accelerating digital transformation. Asked of all respondents (500)

In assessing suitable technologies, consideration needs to be given to each of the individual use cases across the business. In many cases, organizations may find that best-of-breed point solutions deliver better results than choosing to deploy one system enterprise wide. In this case, be sure to spend time and attention considering how to integrate all these systems across the business. Otherwise, disconnected systems and data silos may persist and the true value of cross-enterprise digital transformation will not be realized.

... AL/ML assistance is vital to accelerating digital transformation

About SnapLogic SnapLogic is the leader in self-service integration. The company’s Enterprise Integration Cloud makes it fast and easy to connect applications, data, APIs, and things. Hundreds of Global 2000 customers — including Adobe, AstraZeneca, Box, GameStop, Verizon, and Wendy’s — rely on SnapLogic to automate business processes, accelerate analytics, and drive digital transformation. SnapLogic was founded by data industry veteran Gaurav Dhillon and is backed by blue-chip investors including Andreessen Horowitz, Capital One, Ignition Partners, Microsoft, Triangle Peak Partners, and Vitruvian Partners. Learn more at snaplogic.com.

About Vanson Bourne Vanson Bourne is an independent specialist in market research for the technology sector. Their reputation for robust and credible research-based analysis is founded upon rigorous research principles and their ability to seek the opinions of senior decision makers across technical and business functions, in all business sectors and all major markets. For more information, visit vansonbourne.com.

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RESEARCH REPORT Busting Through Digital Transformation Roadblocks

Research scope and methodology The research was conducted by Vanson Bourne, an independent specialist in market research for the technology sector, between April and May 2018.

Five hundred interviews for this research were conducted with IT Decision Makers (ITDMs). To qualify for the research, respondents’ organizations could be from any sector and their organization had to have at least 500 employees.

Respondents came from the US and UK:

y US – 300 interviews

y UK – 200 interviews

Respondents were interviewed using an online methodology and a robust multi-level screening process was used to ensure only appropriate respondents participated in the project.