Going on a digital journey? Bring lots of clouds, data, and most of all, people.
That’s the word from a new study of 105 organizations, published by Constellation Research, which found, for starters, that pursuing a digital strategy is no longer the exotic journey it once was. The authors, Chris Kanaracus, Courtney Sato, and R. “Ray” Wang, all with Constellation, argue that digital transformation is now about as mainstream as you can get. “Until recently, digital transformation was pursued mainly by leading-edge enterprises or specialized ‘innovation departments’ within organizations,” they state.
Now, the ability to marshal big data, employed on top of scalable cloud resources, makes digital transformation a reality for organizations of all types and sizes. The survey finds that 75% of organizations are getting more deeply immersed in data analytics and platform initiatives. More than one-third, 35%, say their investments in data projects are increasing significantly. The survey finds emerging interest in several data-intensive waves, including artificial intelligence, the Internet of Things and blockchain (which the researchers refer to as “synchronous ledger technologies” or SLT). These three initiatives are all massive data generators, of which few organizations likely have enough on-premises capabilities to handle.
Fittingly, 77% of respondents also report their organizations were increasing their investments in Software-as-a-Service and cloud-related offerings, and 45% saying that the investment would be “significantly” greater. Big data and cloud are now inexorably intertwined. “Digital business models such as As-a-Service and ‘mass personalization at scale’ require large amounts of data and computing power to execute. In addition, the connections for IoT are in the cloud and artificial intelligence (AI) processing increasingly will rely on cloud-based services.”
Currently, IoT leads in terms of time and investment but the Constellation team expects AI to catch up very shortly. “A large majority of executives say they are investing in IoT, while a minority of executives say they are investing in AI. Due to changes in the market,” they note, adding that they expect “investment in AI in 2018 to be comparable to investment in IoT in 2017.”
Finally, Kanaracus and his co-authors leave us with another very important takeaway as well. With a growing emphasis on data-driven analysis and artificial intelligence, one might be forgiven for assuming that this means much lower headcounts required to run enterprises. However, the opposite is occurring; organizations are getting more desperate for people to make these initiatives happen. “As more organizations pursue digital initiatives, they may find themselves engaged in wars for talent,” the report states, noting that 60% of executives say people “will become more valuable” as they move along their digital journeys.
“Many organizations will struggle to find senior executives with the skills and knowledge to lead digital initiatives. Expect competitors and consulting firms to aggressively poach senior talent with digital competence. Many organizations will also experience a hollowing out of the workforce if midlevel employees are ill equipped to fill roles in digital business.” Kanaracus and his team advise organizations to “provide training, share best practices and inform the workforce of the digital transformation methodologies.”
Some additional nuggets coming our of the Constellation survey research:
- About half of organizations, 48%, have an enterprise-scale “deifined digital transformation strategy.” Only 18% have nothing at all going on.
- Close to one in five, 19%, have an “established strategy with production IoT applications.” Another 28% are piloting IoT projects.
- One in four, 25%, see AI as an important investment at this time. Another 38% are still “mulling” its potential implications.
- Nine percent of executives report completing a blockchain/SLT implementation, and another 10% were running proof-of-concepts. “While there is the potential for enterprise application of blockchain and SLTs, the lack of standards and successful case studies make it too risky for most organizations to feel comfortable investing in these technologies at this time.”