Despite businesses investing in digital transformation to reduce costs, they aren't achieving the savings they expected according to research by the Cloud Industry Forum (CIF) and hybrid IT provider Ensono.
Over two thirds of the 250 business and IT decision makers questioned said saving money was a key driver for undertaking digital transformation projects, yet only 51% of are using this as a metric of success. Customer satisfaction, on the other hand, was used as a KPI by 52% of the organisations in the study, yet only 40% said it was a key driver for digital transformation.
"It is promising to see that nearly all organisations are measuring the success of their projects. However, the objectives and KPIs do not align, indicating a bigger problem," Simon Ratcliffe, principal consultant at Ensono said. "Either the strategy is not tied down and organisations are 'doing' digital transformation for the sake of it, or the strategy is not being communicated adequately."
He explained that the entire business must be aligned with their goals, including the IT department, the board and the business, focusing on people first, with the right technology facilitating the shift.
Other reasons businesses decided to transform their digital policies included increasing productivity (59%) and increasing profitability (58%). The vast majority of businesses (99%) said they were measuring success, but the metrics they are using are a little misguided, not fully matching up with the drivers for transformation.
"Digital transformation is fundamentally about business transformation," Ratcliffe added. "It is about seeing change facilitated by technology and hybrid IT as a revenue generator rather than a cost reduction function. Primarily, it needs to be seen as an opportunity for growth. Growth through innovation and the delivery of the best service, product and experience to customers and through finding new and quicker routes to market.
"The focus on cost savings is outdated and will negate transformation efforts, limiting its scope and impact. This could ultimately have longer-term implications for the business in the digital era."
However, of those that are sufficiently measuring the success of their digital transformation policies, most are seeing better results than they expected, especially those put forward by business decision makers.
"When the Cloud Industry Forum first started researching digital transformation two years ago, it was a relatively minor concern, with only 51% having started the process," Alex Hilton, CEO of CIF said.
"In this latest study, 100% of the organisations we spoke to reported that they were pursuing digital transformation and some 16% stated that they had already completed it. Great strides are being made, but organisations need to ensure they have the right vision, objectives and the appropriate measurements in place to ensure it delivers to the business."
Main image credit: Shutterstock
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