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How can CIOs keep their digital dreams afloat?

70% of digital transformation projects fail. How can CIOs and CTOs prevent their ambitions from sinking?  

January 31 2022Durga Godbole

Digital transformation: what does it take to win?

Digital transformation has been a hot topic among businesses for a long time now, but when it comes to implementation, it lacks steam. In fact, in spite of the technological capability being available, proven, and mature, 70% of digital transformation initiatives fizzle out, according to a report by Boston Consulting Group. Let's take a look at the possible solutions that can help you to efficiently leverage the power of digital and future-proof your business.

The transformational decade of the 2020s

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While we were expecting this new decade to spur digital awakening, the pandemic crisis pushed companies and IT decision makers into a full-blown “Digital Only” mode. A recent McKinsey Global Survey stated that companies sped up digitalization of their supply chain, internal operations, and customer interactions by three to four years. 

So was this a transformation or a disruption? Transformation can be planned, while disruption cannot be anticipated in advance. Businesses cannot predict the future; they can only leverage trending technologies like Artificial Intelligence (AI) and cloud to recalibrate to disruptive changes quickly.

In the years to come, AI, Cloud, and Edge Computing will fuel transformation even more, and better prepare you for disruption. It’s no wonder then, that another McKinsey study reported 56 percent of all respondents adopting AI in at least one function, up from 50 percent in 2020. These technologies are “data guzzlers”, and as they evolve, the practice of “dumping everything into a data lake” will become redundant. Decentralization will become the norm. This will also raise concerns about how ethically businesses use this data and whether they guarantee data sovereignty or not. At T-Systems, we ensure that our AI systems adhere to our company values, ethical principles, and social conventions through our AI guidelines

Technology transformation is also bringing about a sustainability transformation. For example, a T-Systems Low Carbon Mobility Management (LCMM) solution — developed in collaboration with DLR and fully compliant with the methodology described in the ISO/DIS-standard 23795-1 — helped the Chinese city of Huainan reduce its CO₂ emissions by more than 5 megatons per year. 

Apart from technology, customer need and business model are major drivers of disruption. The trigger points are either the need to accelerate convenience, speed, or personalization. What makes a brand like Uber, for instance, have such a global presence? Obviously, the fact that the Mobility-as-a-Service provider made it so easy for customers to book a cab at the click of a button, almost instantaneously. Expedia, on the other hand, understood the hassles customers face while booking hotels, flights, experiences separately – so they brought it all together on a single app! 

What today holds for us: the coming of age

Over the past couple of years, AI, blockchain, cloud, and other technologies have become mature and robust. AI can now accomplish tasks that were not possible a few years ago — right from replicating the music of a famous historical musician to better welding in cars. AI has reached a maturity wherein organizations do not need to heavily invest and reinvent the AI wheel, so to speak. AI solutions can be leveraged in an off-the-shelf, use-as-you-go model! In fact, according to Forbes, 83% of businesses now believe AI is a strategic priority for their business today. 

A reality check

The technology is ready to be used – and it keeps getting better. But there are challenges in implementation. People and technology problems such as legacy systems, data scarcity, lack of trained professionals, trust deficit, data privacy and security, ability to quickly replicate a successful use case, and many more, can mar an ambitious AI strategy. If organizations invest in a flexible infrastructure, these challenges can be easily dealt with.

The road ahead

The decade of 2010 focused on developing transformative technologies, and the current decade will be all about executing them. This will exert a lot of pressure on businesses in terms of – speed, flexibility, and security. A flexible and highly decentralized infrastructure is essential for dynamic, on-demand production and to drive technologies like AI. For this, IT and operation technology (OT) need to seamlessly merge and production lines to create and consume increasing amounts of data. To uncover business insights and automate processes, enterprises need to do more than just store data – they need to make the correct data available for analytics and decision support in real time, and with low latency. 

This leads us to concerns about security and sovereignty requirements. Many companies still hesitate to bring all their workloads on the cloud because of their fears related to data sovereignty. Solutions like the sovereign cloud are therefore the need of the hour. Going by the pace at which technology is currently evolving, it’s obvious that business leaders will need to prepare for what’s coming next. A good starting point would be introducing more flexibility into our processes, removing data silos, automating repetitive tasks, and making data-based decisions. 

What does this mean for the CIO?

In the current scenario, CIOs need to be at the forefront of innovation by creating agile infrastructure and freeing up workloads by modernizing legacy IT, while making it sovereign and secure. In essence, IT must be the heart that powers all business strategy. The closer IT is to customers, the better it can help spot customer needs and steer the company in the right direction.

The priorities for CIOs should be bringing more workloads to the cloud, transforming the existing legacy infrastructure to keep pace with newer technologies, adopting secure solutions for the OT environment, and helping employees upgrade their skills in tandem with the technologies in force. And last, but definitely not the least, CIOs should also embed sustainability into their core business activities.

Speed up your transformation journey with our digital fast lane offerings. Get in touch to know how.   

About the author
Durga Godbole, Content Manager

Durga Godbole

Content Manager, T-Systems International GmbH

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