Alfresco and Dimensional Research Enlighten on Disruption
For those of us who live and breathe in the world of digital business, imaging digital transformation as anything other than the constant it is for us is hard to do but for many industries, it can be a new and sometimes scary concept when they see the waves of change it is causing in their market, and its ability to overturn some well-established businesses previously content on the seemingly ever placid sea.
Call it a crystal ball for the C-suites of these vulnerable organizations or simply the wake-up call that is needed but Alfresco just released the results of a survey they did with Dimensional Research called Digital Disruption: Disrupt or Be Disrupted to identify which companies have the qualities to be the disruptors versus who fits the bill to be disrupted and, which industries themselves are poised to be the most and least effected by digital transformation.
After reading the study, I was interested to talk to a member of the Alfresco team to hear their thoughts on a few questions I had about the study and digital transformation in general. Thankfully, Sydney Sloan, the CMO of Alfresco was able to weigh in.
Alfresco CMO Weighs In
The digital transformation conversation is one that has been going on for quite some time and I know I can have a misconception that organizations are further along than they actually are, often wondering if I am alone in that or could companies in disparate markets really be that far behind? I posed this question to Sydney to get a sense of whether she felt the majority are closer to the beginning of their journey or were many more up to speed with digital transformation than we might think and, are their certain vertical markets that seem to have a better grasp on digital transformation than others?
What we see is that the concept of Digital Transformation is well understood, and the threat of being disrupted by a technically innovative competitor is real. 87% of respondents believe their business results would be impacted by a competitor, which begs the question, will they be the disruptor or disrupted? The answer is it’s a coin toss, with a perfect 50/50 split on their belief as to whether they would win or lose out in the coming year. Survey respondents also shared their sentiment that Retail (30%), Banking (24%) and Healthcare (24%) are the industries that are most likely to benefit from digital transformation initiatives.
One industry in the report most vulnerable to disruption in 2018 was the banking industry, the reason for this as stated in the report has to do with the reliance on legacy applications and outmoded processes making them less flexible to make changes as quickly as they would need to compared to others. I asked Sydney to elaborate on this if she could and what are some ways other organizations in that market could take steps necessary to head off getting disrupted?
The banking industry historically has been an early adopter of technology to drive their innovation and stay competitive. Some of our customers, like Capital One, even consider themselves software companies who focus on the financial services market. Yet there are other financial institutions that are slower to move and change, held back by complex legacy systems that have yet to be modernized, some are still using paper-based processes. The survey highlights that cloud is key to digital transformation, having a fluid infrastructure that can adapt to change, process larger loads of data and allow for faster innovation. 95% of respondents stated using cloud infrastructure-as-a-services (IaaS) is important, with 21% even highlighting it as critically important.
When thinking about industries that were, I guess, for lack of a better term being victimized by the disruption of digital transformation, the first to my mind is the retail industry thanks to all the media out there showing empty shopping malls as a result of the ‘retail apocalypse’ with many previously sturdy brands retreating and even vanishing like never before. Surprisingly though, in the report the retail industry was a leader in that 30% of respondents in the survey said it was the area that could be most improved by digital transformation, so I asked Sydney the role she feels digital transformation plays in that:
Digital disruption is everywhere—and it’s hitting nobody harder than the large-scale traditional enterprise. It is true that digital transformation killed Toys “R’ Us – or to put it better: the company’s inability to change with the times led to its eventual death. What happened to them is a cautionary tale to everyone in the C-suite. The very essence of doing business is transforming and that requires changing the way businesses interact with their customers.
Along those same lines of adaptation, I wondered what the entrance of Cloud has done in terms of changing the digital game especially after in the report it is stated ‘Cloud is the key to digital transformation’ so I was curious to hear from Sydney what is from her perspective:
Adopting cloud gives a time and cost advantage. Infrastructure clouds or infrastructure-as-a-service (IaaS) solutions enable companies to innovate quickly and respond more rapidly to changing business conditions. Organizations of all sizes and industries have embraced content management in the cloud, enabling IT to innovate faster, more cheaply and with greater agility using a cloud-native content services platform. At this point, we don’t talk about “Why cloud?” We focus on “Why not cloud?”
Finally, one of the most interesting findings in the report was that technology challenges are not where organizations have trouble in their digital transformation and it was in fact the people challenges causing the delay. In the report it states: “One of the most relevant takeaways of this research is the human part of the transformation equation. Simply implementing technology doesn’t mean a company has been digitally transformed. A transformation must begin with employees, their work habits, ability to collaborate, as well as the overall corporate culture. And this is where the hard work begins.” To combat this, Sydney gave some tactics organizations can employ to transform the human part of their organization in line with the digital part:
There are a few things we see consistently in companies who have undergone the change: (1) a focused effort on managing a cultural transformation; (2) a move to agile best practices; and (3) adopting design thinking methodologies. We’ve seen new teams form that are focused on “agile workforce transformation” or “cultural change ambassadors.” Technology companies are furthest through this change, and we can now share those learnings with non-tech companies to help them fast track their cultural transformation efforts. Alfresco has been promoting the 3 pillars to digital transformation as Design Thinking, Open Thinking and Platform Thinking as the key underpinnings to success.
It is very interesting to me that in a time when the technology changes seem to be the most difficult to overcome for businesses who are engaging in digital transformation, a survey of more than 300 digital transformation decision makers in the United States and United Kingdom showed that 78% feel it’s the human element that is the hardest to overcome. It would make sense since human behaviour tends to be a little more difficult to mould into a new pattern and see consistent change executed like we can by flipping a technology switch.
There is no human behaviour switch but this is just another way companies highly familar with the inner workings of digital transformation as a whole can share their knowledge and strategy to get everyone up to speed.