Digital Transformation research – the core versus new tech dilemma

C-suite feedback to Sopra Steria’s Digital Transformation Survey 2016 reflected a critical pain point many commercial organisations face today; the opportunity cost of investing scarce CapEx to sustain existing capabilities versus bolder, riskier transformation of its customer or employee experience as enablers for long term growth.

In fact the survey reported an almost fifty/fifty split between these two competing priorities across most business areas (tellingly over a third of respondents were senior managers from marketing functions, highlighting how such strategic budget decisions are increasingly moving front of house away from IT’s direct control).

So why does this tension exist and how can senior management respond?  Here are some ideas…

Where to start?

Many respondents ranked prioritising investment in new technologies such as virtual reality far below core system transformation. This does reflect a pragmatic approach; radically transforming the customer experience is likely to fail if legacy back office capabilities are unable to effectively support these new engagement channels.

Yet further analysis of the survey results suggests this may be symptomatic of a deeper rooted problem – organisations are still figuring out how to satisfactorily measure the benefits of digital transformation; many respondents struggled to name specific hard or even soft measures for evaluating their initiatives with very few identifying return on investment as a key metric.

Lead or follow?

Despite there being a strong commitment to digital transformation from all respondents (particularly as an enabler for customer experience improvement); many fed back they were making such investments in response to competitor first moves in this area rather than taking a pro-active approach themselves.

But again, this may only be telling half the story; most participating commercial organisations were allocating less than 25% of their annual CapEx budgets to such initiatives and typically only focusing this investment on transforming a single business area.  Digital transformation is still arguably perceived by many senior managers as too immature to use for wide scale business change, despite the strategic risk of their competitors succeeding first using such an approach.

How to integrate?

Many respondents positively felt that the key strength of digital transformation is its ability to cut across organisational silos to innovate the customer experience while lowering operating costs – a solution to the core versus new tech dilemma.

Yet many reported a range of people, process and technology barriers impacting their ability to deliver this integrated approach – especially frustrating given the majority of senior managers interviewed wanted their people to lead such projects directly rather than suppliers.  It’s perhaps no surprise then that the same respondents also want external partners to play a key role in designing and realising digital projects collaboratively with them.

Solving the dilemma: Sopra Steria digital service design

At Sopra Steria, we help commercial organisations turn these digital transformation challenges into sources of scalable competitive advantage.  This is because our people first, technology second approach to digital service design is focused on ensuring the right organisational pain points are being proactively addressed to meet desired business outcomes from day one of a project.

Consequently organisational stakeholders are empowered to innovate the customer and employee experience using an optimal mix of existing capabilities and digital ways of working; we enable a commercial organisation to successfully solve its own core versus new tech dilemma.

If you would like more information about how Digital Service Design can benefit your customers and employees please contact the Sopra Steria Digital Practice for more information.

Published by

Mark Howard

Mark advises on user centric digital service design & transformation with a focus on tangible business benefits realisation. His passion is helping organisations to transform how their people use digital ways of working to interact with users to deliver an seamless, integrated customer experience. Mark’s recent private sector experience includes delivery of a mobile application prototype for a European business services company and advising a major UK high street retailer about using enterprise social media tools to drive competitiveness. Mark has 10+ years consultancy experience advising blue chip Telco, FMCG, Retail and Pharma clients as well as UK Central Government. Mark holds an MBA from Open University.

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