Culture is Key to Successful Digital Transformation

Culture is Key to Successful Digital Transformation

July 4, 2019

Global business leaders believe they can achieve 17 percent return on investment (ROI) over the next 12 months through digital transformation according to new research published by Avanade.

By Joanne Leila Smith

Avanade commissioned research firm Vanson Bourne to interview 1,150 respondents throughout Europe, North America and Asia Pacific. They included executives in IT, finance/operations, sales, marketing, and HR. Respondent companies have a global annual revenue from USD500 million to more than USD10 billion, and participate in industries including communications, media and high-tech, financial services, health and public services, resources and products.

The report claims 92 percent of respondents say digitally transforming their businesses is among their top three priorities, with 43 percent claiming ‘digital transformation fatigue’ is significantly impacting their progress.

On this finding, Avanade Global Business Applications lead Gord Mawhinney says there’s no single path to success on the digital transformation journey, as no company starts at the same point.

“Each has its own unique set of challenges to overcome along the way.  Avanade has identified three key dimensions which we believe organisations must address to successfully complete their digital transformation: innovation, efficiencies and experiences. Those businesses that achieve maturity across all three will reap the greatest returns. The findings from our research echo this,” says Mawhinney.

Aligned to innovation, 88 percent of respondents say they need to add innovation to business systems to enable agility and continuous improvement. Most, (84 percent) believe AI needs to be invested in at the same time as they refresh their business apps in order to be most successful.

In terms of efficiencies, 78 percent of respondents acknowledged that artificial intelligence (AI) is often adopted without consideration of how to integrate it with legacy systems—a challenge respondents themselves admitted having found difficult. Additionally, 85 percent said that the integration between AI, their data sources and business systems could be better.

From an experience perspective, 83 percent of respondents say that customer experience (CX) and employee experience (EX) investments should have equal priority.  82 percent claim investments in CX and EX should come before AI investments while 80 percent say their culture and people are the biggest success or failure determinants.

According to the report most organizations view employee and customer experiences as the biggest factor driving digital transformation initiatives, even over the technology and innovation agenda. Global Data and AI lead Simon Thomas says connecting employees and customers to intelligent technologies is dependent on integrated and accurate data.

“The key to delighted customers is to make AI part of the enterprise DNA, and indigenous to the digital transformation. This enables the organization to be more successful and the employees to be more productive and effective,” says Thomas.

Respondents seem to agree. According to Avanade’s research, 94 percent who have invested in intelligent technologies believe intelligent automation and predictive analytics will provide the greatest lift in business results.

Avanade shares a case study of French insurer, Generali, which underwent a five-year digital transformation program to increase operational efficiency and customer service. In this first stage, Avanade claims it implemented a Robotic Process Automation (RPA) solution which reduced the processing time of requests from 72 hours to an average of just one hour. Longer term, Avanade says it is working with Generali to increase the efficiency of its employees by integrating cognitive abilities with robots.

According to the report, Avanade says future-ready organizations infuse intelligence across three key dimensions:

Building operational efficiencies demands deep levels of integration across business-critical systems and process levels to reduce costs. Fusing intelligence deeply into systems requires potentially lifting or rethinking old processes with automation so your people can focus on outliers and issues to be solved.  Efficiencies also convert into organizational agility and the ability to respond faster to market conditions;

Invest in customer and employee experiences. Customer experiences require equal investment with employee experiences. Review every point of interaction between its brand and the customer and optimizes it with user-centered, engaging and designed interactions. Consider the entire customer experience lifecycle and infuse intelligence at the right moments. Removing friction points across the experience lifecycle helps to maximize revenues and customer loyalty;

Strategy, talent and skills are closely linked in digital transformation.   Avanade says almost all organizations in its survey have a digital transformation strategy but many of the respondents were challenged with where to start and how to sustain their strategy.  Respondents understood the connection between intelligence and the transformation journey. They are investing in technology areas like intelligent automation and predictive analytics and perceive great improvement in business results from the effort. Respondents did caution that intelligence needs to be integrated with processes, systems and experiences to be effective in the digital transformation journey.

Integration of existing systems and data to build operational efficiencies. Upgrading business-critical systems and integrating them with existing processes is seen as a core element to building intelligence across the organization.

Innovation for continual improvement. The majority of respondents agree that they need to add innovation to their business systems to enable agility and continual improvement.

To access the full report, click here


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