The Four Challenges
So, what is holding back digital transformation and making life difficult for so many CIOs and their organizations? The answer to this question can be summarized in four categories1.
- Massive backlogs. Many organizations have more work than their IT teams can deliver. According to a recent OutSystems survey of 3,200 IT professionals, 62 percent of IT managers reported having a backlog of mobile apps. In some cases, they had 10 apps or more waiting to be developed.
- Legacy debt. Keep-the-lights-on activities make up a massive 70 to 80 percent of IT budgets.5 Inflexible back-office systems not only use up too many resources and too much budget, but they’re also hard to integrate or adapt in the ways needed to support new digital initiatives. Slow development methods associated with legacy systems make a bad situation worse.
- Scarce resources. Digital initiatives require specific technical skills. Since many organisations don’t have them, their choices are to invest heavily in training, recruit necessary skills, or plug gaps with outsourcing. Unfortunately, with developers costing as much as $170 an hour, these options are expensive, time consuming, or both.
- Uncertainty. Digital transformation (if it really is transformative) is hard because it involves genuine innovation and a different mindset. Processes, business models, service offerings are all likely to be new. Adoption by customers and partners is unpredictable. Simply put, this is a million miles from the comparative safety of incremental and linear business improvement. Embracing such uncertainty is often hard for IT organizations. New methods are needed throughout the entire development lifecycle. Risk-averse, business-case prioritization is out; design thinking and lean startup, and test and learn are in.
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2 . Forrester: 2018 US Tech Budget Outlook