Zscaler CEO: Successful digital transformation requires simplistic thinking

IT leaders must adopt a more agile, simplistic approach to digital transformation to fully maximize the effect of projects within their organization, according to Zscaler CEO Jay Chaudhry.

Speaking to attendees at Zenith Live in Berlin, Chaudhry acknowledged that businesses have embarked on a whirlwind of transformation in recent years, largely fueled by necessity during the onset of COVID-19 and remote operations. 

However, current macroeconomic factors play a key role in driving transformation, while the emergence of new technologies is prompting businesses to embrace change.

“All of us are driving transformation because the business is going through change and it’s a very competitive world,” he said. “We all hear about transformation and the like, but all of that is powered by technologies such as cloud, IoT, OT, and now AI and machine learning.”

While organizations are aggressively pursuing transformation goals, Chaudhry warned that antiquated mindsets and a range of internal factors can seriously inhibit innovation and prevent businesses from achieving their goals.

Most notable among these is a complacent culture among some IT leaders who are stuck in a loop of traditional, outdated practices.

“IT plays the most important role in driving transformation. You play the most important role, but you also need to act fast to drive change,” he said. “You can’t sit back and say ‘this is how things have been done for the last 30 years, so let’s keep doing so’.”

IT, Chaudhry said, used to be a ‘network-centric world’, but now leaders must pivot to a more user-centric approach to ensure successful delivery of projects and maximize customer satisfaction.

What’s holding digital transformation back?

Speaking on the key inhibitors of digital transformation, Chaudhry identified three specific areas, namely inertia, technical debt, and internal politics.

These ‘basic’ elements can create serious hurdles for businesses embarking on - or accelerating - digital transformation programs.

Inertia, as he puts it, is a powerful inhibitor that locks IT leaders and organizations into an outdated mindset which prevents them from embracing change.

“Inertia is powerful, and it holds you back because we are comfortable with what we’ve been doing for the last 10, 20 years or so,” he said.

Research has often identified inertia as a common inhibitor in digital transformation, whereby teams are reluctant - or unwilling - to accept change.

A study from Gartner found that IT workers have become increasingly concerned about the pace of change as a result of digital transformation programs at their employers, leading to push back from staff, heightened stress, and lower productivity.

Meanwhile, technical debt was highlighted by Chaudhry as another key roadblock for achieving digital transformation success.

He said that many organizations are faced with “a lot of technical debt that needs to be removed and garnered off”.

Chaudhry’s comments highlight a common factor in the failure of digital transformation projects globally, with businesses often forced to contend with cumbersome legacy IT infrastructure while modernizing operations. 

McKinsey described technical debt as the “silent killer” of technology modernization in a study published earlier this year.

The consultancy revealed that technical debt accounts for anywhere up to 40% of IT expenditures, with companies forced to pay an additional 10% to 20% to tackle the issue on top of the costs of a typical digital transformation project.

“Some 30 percent of CIOs we surveyed believe that more than 20 percent of their technical budget ostensibly dedicated to new products is diverted to resolving issues related to tech debt,” McKinsey said. 

Given current macroeconomic conditions, the impact of dealing with technical debt can be significant for organizations seeking to streamline and modernize. 

A Forrester study last year urged IT leaders to accelerate plans to tackle the issue to mitigate heavy financial burdens amid tightening budgets and a looming recession. 

In a call to action for attendees, Chaudhry urged IT leaders to directly focus on addressing these issues to “be more successful and be more progressive” in their approach.