Big Bang Digital Transformation Fails to Win Board Support
Scale Down Innovation and Take a Pragmatic Approach


Many CIOs are suffering from digital transformation fatigue.

One reason is that this term has been overused in almost every IT modernization project. However, there is another reason as well.
CIOs have come to realize that massive, time-consuming big bang-style digital transformation is difficult to obtain support from the CEO and board of directors.

We are already living in an age of constantly shifting business "fragmentation." More precisely, many enterprises have failed at enterprise-wide digital transformation.

Forrester Research Analyst Allan Bond stated, "Due to existing inertia, the will for change is stuck in a 'stalemate,' and this situation will continue into 2019."

He explained that while technology, skills, and cultural change are essential for digital transformation, the big bang approach discussed in the industry is not the answer.

He added, "Since many technology leaders are experiencing fatigue from large-scale digital transformation, we must now reduce its scale," and further noted, "Executives are now awakening to the current situation, and some are beginning to ask, 'How can we make this more pragmatic?'"

Bond explained five digital business outlooks for 2019 and how CIOs can adapt to these changes as follows.


First, Digital Transformation Becomes More "Selective"
Innovation will continue to be pursued, but it will become more deliberate. Instead of long-term innovation cycles of 5-7 years, think in terms of 24 months.

Bond cited the example of Adidas experimenting with 3D-printed shoes and Office Depot testing digital marketing services in stores. There are also cases such as MetaLife's AI software adoption and Synchrony's chatbot launch. The purpose of these activities is to improve services for digitally savvy consumers.

Bond predicted that in 2019, enterprises will validate new types of return on investment (ROI), and various digital technologies will have their importance determined according to their benefits to the enterprise.

He stated, "Digital KPIs will play an increasingly important role. Generally, innovation takes significant time and does not happen in the short term," and added, "You must start with manageable-scale innovation that delivers tangible benefits."

To offer advice, pursue an approach that delivers quick results, repeat these successes, and enable digital leaders to lay the groundwork for larger transformation initiatives. However, this process should be incremental and each project should have value.


Second, The Era of Operational Efficiency Arrives
By focusing more on operational simplification, enterprises can weather the crisis when the hype and vitality of digital transformation diminish. In 2019, enterprises will strengthen their response to economic downturns as they focus on digitalization that improves customer outcomes and delivers productivity.

While the ultimate goal of customer-centric innovation is still growth, CIOs will take a firmer stance on costs. CIOs will work to halt projects executives pursue for vanity's sake and, where possible, provide self-service options.

Bond stated, "What ultimately matters is results," and added, "Especially for projects that promise efficiency, customer satisfaction, and cost-effectiveness."

What is recommended is that CIOs should focus on preventing the proliferation of uncontrolled SaaS applications. Such applications often emerge in the process of allowing shadow IT. Coldly reassess whether SaaS services are necessary and block them accordingly based on the results.


Third, Product Management Becomes Important
In 2018, key concerns for CIOs included evolution from project-based to product-based IT management, keeping pace with agile development trends, transition to XaaS (everything-as-a-service) IT services, and improved focus on supporting customer journey mapping.

Bond predicted that as CIOs increasingly focus on customers, in 2019 the roles of product designers, product managers, and "experience managers" will become important. He advised that enterprises must especially hire product managers who connect marketing and IT across the entire business process, mediate conflicts, and explore new channels.

Additionally, product managers should not obsess over engineering at the expense of marketing. The key is to retain the "voice of the customer" so the enterprise does not suffer damage. If product managers become too rigidly tied in too deeply with engineering, it may become difficult to maintain partnerships in the market.


Fourth, B2B Platforms Rise
It is already widely recognized that the economy is moving toward a platform-centric model thanks to the proliferation of API and cloud technologies. MuleSoft, a Salesforce-affiliated API hub acquisition specialist, demonstrates this trend well.

Bond stated, "The market has already moved beyond viewing digital touchpoints as mere consumer channels," and added, "Now enterprises will pursue new efficiencies in interactions with suppliers and distributors, and distributors will leverage market data and expertise as means to strengthen competitiveness."

What is recommended is that when developing a platform strategy, do not treat data like "state secrets" but share it with distributors and suppliers. Bond stated, "They can be good data partners. Even if not, consider them as a second solution."


Fifth, AI Becomes More Integrated into the Digital Stack
It is impossible to resist the AI craze. From intelligent automation to virtual assistants and fraud analysis, virtually all enterprises now use AI to analyze certain tasks. Enterprises are expected to increasingly apply AI across their entire technology stack.

Notable examples include Adobe Sensei AI, which enables marketing professionals to easily create and execute campaigns, and IBM Watson, which is used for everything from healthcare to date prediction.

Bond stated, "AI will be applied more extensively to digital processes and tools. Examples include AI-powered recommendation engines, content management, and supply chain systems."

What is advised is to not be swayed by hype and aim for quick wins. In 2019, digital leaders must collaborate with counterparts in operations and marketing to automate backend processes and simplify day-to-day tasks. By rapidly iterating these quick wins, it becomes possible to continuously drive innovation.

Bond emphasized, "In the end, what matters most is driving positive change by leveraging agile and design thinking," and stated, "In 2019, focus on digitizing the customer service experience and use technology and partners to create short-term results that help achieve long-term goals."