<img alt="" src="https://secure.leadforensics.com/125734.png" style="display:none;"> Digital transformation stifled by insufficient IT capacity

Digital transformation stifled by insufficient IT capacity

Digital transformation stifled by insufficient IT capacity

In today’s world, technology is an integral part of every aspect of our daily lives. We are all connected in real-time and guided throughout the day by our mobile phones. Technology has fundamentally changed our personal lives. How does this compare to the business life? Have organizations’ daily operations benefited equally from these technologies?

Even though the impact of digitalization is not new, the growing digital economy ushers in a new age of extraordinary possibilities. This has given rise to new challenges and opportunities for any organization.

MIT Sloan, in collaboration with Deloitte, reported that “a larger percentage of digitally maturing companies are planning to increase their digital investment compared to their less digitally mature counterparts, which threatens to widen an already large gap in the level of digital success.”[i]

Companies that commit to transforming their core business capabilities with the right digital technologies will most likely outclass their competitors. Sounds great, but the execution might not be that simple.

In 2015, Gartner warned that the demand for business apps is already larger than the ability to develop and that this need will “outstrip available development capacity five to one” by 2021.[ii]

It is now 2017, and Gartner recently announced that the development of business apps is not accelerating. A future-ready, multi-year strategy alone won’t work if it can’t be executed. What can you do if there is a worldwide shortage of the one thing you need to stay competitive?[iii]

We look at some of the trends that our societies are subject to and reflect on how organizations are – or aren’t – contending the possibilities.

Pigeons don’t travel at light speed

Until the introduction of the direct telegraph, carrier pigeons were the fastest way to send and receive information in the 19th century. These birds fly home at a top speed of 140 km/h. By strategically placing them around Europe, Paul Julius Reuter was always the first to receive information. The founder of Reuters News Agency became synonymous with the news partly due to the pigeon, when no one else used them so effectively.

Today our words and images travel at light speed. That is how fast the internet transfers our communication around the world. With the internet becoming a commodity, it is not a matter of if you are using it; It is how. Until someone finds a way to go faster than the speed of light, we are all equal. As cliché as it sounds, but true nonetheless.

Technology is never an end goal, it is a means to an end. When the direct telegraph was introduced Paul Reuter understood its importance and potential. It is no surprise then that his agency was the first to productively use this new technology. Others soon followed and Reuters News Agency lost its technological edge, but never its newsworthiness.

The trends we discuss below are therefore organizational rather than technological; because technology is for sale and organizational efficiency is not.

Online & on the go

The world is undergoing a period of globalization that influences all domains of life, including the workplace. It has changed the way we communicate with our colleagues and customers. Electronic communication, such as email, instant messaging, and video conferencing eliminates time and space barriers. But it’s only the beginning.

More than 50% of the world’s population now has internet access and the global average connection speed is 7.2 Mbps as of Q1 2017. We will not discuss whether the internet is a human right, but it can safely be concluded that it is fast becoming a human need. And with the internet in our pockets, a whole range of potential solutions become available.

Organizations increasingly allow their employees to work from home, a coffee shop, or some remote island. The changing environment makes people more creative and offers fewer distractions than working from the same office day in day out. This also poses a few challenges for organizations;

  1. Your team might expect more freedom than before;
  2. You need to keep your team involved with the rest of the company;
  3. There is less direct oversight on employee productivity.

Even if most of your employees still work from the office, the workplace is changing. That is why companies with a clear digital strategy transform more than just their communication.

Harvard Business Review (HBR) found that “firms with a strong vision and mature processes for digital transformation were more profitable on average, had higher revenues, and achieved a bigger market valuation than competitors without a strong vision.”[iv]

We have to change the workplace and modernize the applications and systems we use particular to our business needs. This is where profits are made today and for the foreseeable future; Transformation of unique organizational processes into productivity tools.

But how to do so given the scarce ability to develop business applications?

The growing divide between our personal and working lives

A primary concern that executives face while executing their digital transformation is the lack of interoperability with existing IT systems. Their knowledge gap raises internal concerns like data security issues and lack of control. Meanwhile, successful executives overcome these challenges to achieve customer-facing business benefits. How do they do it?

Research by HBR, MIT Sloan, and others shows that successful executives dare take risks, while risk-avoiding companies are more likely to lose talent. Employees are now increasingly looking for an employer committed to digital progress. It is a trend across all age groups and in every sector.[v],[vi]

Wharton University even reports that some companies lose up to 50% of their employees annually. While there are numerous reasons for people to leave a company – on their own accord or forced – Wharton places the responsibility of fostering employee loyalty in the hands of the firm. Those among the most expensive to replace are IT professionals, costing the organization approximately 200% of their annual salary.[vii]

People are accustomed to computers, systems, and applications. More than a quarter of the world’s population owns a machine more powerful than the spaceship that brought Neil Armstrong to the moon – Yes, a smartphone. We’ve all become ardent technophiles, but businesses worldwide have not. This creates a growing disparity with our personal lives and forces organizations to really progress into the digital world, or face the consequences.

Again, easier said than done when there is not enough ability to develop business applications. This should not hold back smart executives looking for a competitive edge.

Innovation is never far away, if you know where to look.

Mobility + Innovation = Growth

The number of smartphone users worldwide is expected to hit 3 billion in 2021. Smartphone penetration is a global trend and time spent on these devices is the representation of a major cultural shift rather than addictive behavior. While Millennials are the heaviest users, looking at the small screen more than three hours every day, even Boomers spent 43 minutes on their phones daily.

Mobile is already a critical part of many companies’ infrastructure. Most employers agree that employee time is optimized with mobile access. However, it is the leading companies that successfully leverage smartphone ubiquity to innovate and grow revenue.

Executives with long-term foresight took the risk years ago to invest in mobile business applications. Not every organization has the resources to create its own apps. Even fewer organizations comprehend the potential impact.

It is the leading companies that activate the potential of the smartphone. The productivity gains give a technological advantage, but it is the organization that needs to drive this.

Application development is a fast-changing industry. Demand for mobile business apps is increasing as more organizations commit to the digital transformation.

Analysis

There is a growing gap between digitally maturing organizations and firms that do not take full advantage of the new technological capabilities. Research suggests that organizations with an articulated focus on digital progress typically plan ahead five years or more, while executives without a clear digital plan do not plan so far into the future.

Building a path toward digital maturity takes time and dedication. Digital success must be tied to the organization’s core business strategies. If leadership does not surmount to this challenge, employees will seek employment elsewhere.

The risk-takers who invested in their digital transformation are now experiencing the benefits. The real risk is shifting toward the organizations that are slow at adapting to the changing world. In 2015, Gartner already warned for a development capacity scarcity. With demand expected to grow, the ability to develop will be five to one by 2021.

The advantages for digital leaders:

  1. Improved customer service
  2. Increased productivity
  3. Increased revenue
  4. Increased talent retention

As long as there is not enough IT capacity to deliver, it will – primarily – be organizations with an internal capacity for business application development that thrive.

MIT Sloan concludes that “if an organization waits until it sees positive market proof that traditional business models are faltering, it may be too late.”

Advice: How to deal with the challenge

A 1990s business adage maintains that there are three dimensions of competition that an organization can choose as their primary competitive advantage – operations, products, and customer intimacy. However, digitally maturing organizations negate the necessity to choose.

The challenge is how to become a digitally maturing organization.

What can you do?

  1. Hire Application Developers

What would have been the most cost-effective solution a couple of years ago, was hire some developers to create applications that solve particular organizational issues and automate unique processes. With the growing shortage of developers, this is not as easy as it used to be.

Developers are hard to come by. Good developers even more. Even deep-pocketed organizations will face increasing difficulties hiring Application Developers going forward.

  1. Train application developers

Organizations can also opt for educating their employees or hire young graduates without a programming background and train them in the arts of programming.

Perhaps more difficult than hiring good developers, is retaining them. Employee loyalty is incredibly low, while demand for their skills is high. Your organization ends up training novices, only to see them recruited by other companies. The costs of replacing IT professional is a compelling argument not to hire IT professionals for the purpose of digital transformation.

  1. Enable non-developers to develop apps

There is a new breed of software; the application platform as a service or aPaaS.

Wikipedia defines aPaaS as “a category of cloud computing services that provides a platform allowing customers to develop, run, and manage applications without the complexity of building and maintaining the infrastructure typically associated with developing and launching an app.”

Because the underlying infrastructure is already written, tested, and optimized, the platform allows for low-code development that doesn’t take a seasoned programmer to create something valuable.

If the apps are scalable and intuitive for mobile, users can perform certain tasks from any place in the world as long as they connect to the worldwide web. Time-saving and genuinely efficient; it is the true digital advantage of using the technological possibilities of contemporary connectivity.

Meanwhile, the organization matures digitally, changing the competitive landscape and challenging the leaders.

Achieving digital maturity is a constant process; The time to begin maturing is now.

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Digital Transformation stifled by insufficient IT capacity

Sources:

[i] http://sloanreview.mit.edu/projects/achieving-digital-maturity/

[ii] http://www.gartner.com/newsroom/id/3076817

[iii] http://www.gartner.com/newsroom/id/3735917

[iv] https://hbr.org/resources/pdfs/comm/microsoft/the_digital_transformation_of_business.pdf

[v]https://hbr.org/resources/pdfs/comm/microsoft/the_digital_transformation_of_business.pdf

[vi] http://sloanreview.mit.edu/projects/achieving-digital-maturity/

[vii] http://knowledge.wharton.upenn.edu/article/declining-employee-loyalty-a-casualty-of-the-new-workplace/

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