Digital transformation will fundamentally change how you operate your business and deliver value to your customers as digital technology is integrated into all areas of the enterprise.
Although the term digital transformation has been overhyped and overused, true digital transformation marks a radical rethinking of how an organization uses technology, people, and processes to fundamentally change business performance, as explained by George Westerman, MIT principal research scientist in the CIO article “What is Digital Transformation? A Necessary Disruption.”
Businesses need to embrace digital transformation for survival. This often includes shedding outdated processes and legacy technology. IDC forecasts that worldwide spending on technologies and services that enable digital transformation will reach $1.97 trillion in 2022, per the (IDC) Worldwide Semiannual Digital Transformation Spending Guide. The analyst firm predicts that digital transformation spending will grow steadily, achieving a five-year compound annual growth rate of 16.7 percent between 2017 and 2022. Advanced analytics is the number one digital investment, with a particular emphasis on data visualization and machine learning.
Digital Transformation Equals Disruption
Some of the key digital transformation trends that business and IT leaders should anticipate include:
- the rapid adoption of digital operating models leveraging integrated cross-functional teams,
- a shakeout as companies that have invested in big data governance and analytics leapfrog their competitors, and
- continued merger and acquisition activity in the IT outsourcing industry.
Looking further at the M&A activity, three-quarters of the 2,200 tech acquisitions made in 2019 were analytics firms, digital solutions providers, engineering firms, or digital agencies, according to Steve Hall, partner and president of global technology research and advisory firm ISG. Hall commented, “This record pace of acquisitions will continue to reshape the landscape for CIOs and the service providers they partner with. The M&A activity will be a major source of disruption for CIOs as they are challenged to recognize potential synergies, but more importantly, to integrate digital capabilities into their product lines.”
Unfortunately, with change comes disruption, and disruption introduces risk.
As discussed in The Enterpriser’s Project, ” [Digital transformation] sometimes means walking away from long-standing business processes that companies were built upon in favor of relatively new practices that are still being defined.” As companies transition away from processes built around paper-based records and toward digital, it opens up the opportunity to gain much more insight and value from their data as a result of manipulation and analysis. Logistically, your paper and electronic records stored and maintained on-site at a company’s physical location will move to the cloud. Your technology will likely be SaaS-based and will operate in the cloud as well.
As you undertake your digital transformation journey, think about all of your partners. With each new vendor partnership, additional risk is added into the equation. Of course, you need to consider privacy and security issues but also think about the stability and longevity of the companies you choose to partner with. Reliance on third parties is a risk that is often overlooked until things go bad.
What about Business Continuity or Service Sustainability?
When you license technology – for a digital transformation initiative or for any other project – it requires a tremendous degree of trust between your organization and all the partners you count on to create and implement your solutions and to store and protect your data. Confidence in a partner’s integrity is important, but that’s just the beginning. There is a big difference between trusting that everything will work out in the case of an unexpected event and having a continuity plan to make sure that it will.
There is a way to protect against the unknown when your company licenses new technology or subscribes to a Software-as-a-Service (SaaS) application. An Iron Mountain technology escrow account gives you leverage by allowing you to access the source code and other proprietary information needed to keep the technology (and your business) up and running. And, our SaaSProtect® Continuity Services are specifically created to protect applications and data in the cloud as well as give you long term access to source code and IP in escrow.
What would happen if one of the vendors involved in your digital transformation project was acquired, was involved in a merger, or went out of business? Your company could suffer considerable losses in revenue and/or productivity. You need to know that your technology will be there when you need it, so be sure to consider technology escrow as an element of your complete digital transformation solution.