Our CEO Scott McGlinchey sat down with Bill Magee of the Institute of Directors magazine and gave some insight on the current challenges facing established organisations when dealing with digital transformation {Part 1 of 2}. In part two of this interview Scott will provide key considerations for delivering your digital strategy.

Digital technologies create opportunities to develop new business models, serve customers in innovative ways and run organisations more efficiently and profitably. However, many digital transformation case studies relate to new start-ups, or digital entrants like Uber; they bear scant resemblance to the more traditional and established businesses with complex technology infrastructures and systems developed over many decades.

The challenge for large established organisations initiating digital transformation is complex and multi-dimensional. Not least because they must tackle it from a different starting point compared with digital entrants. What is common to all is how information technology remains critical to everyone’s success. But many established firms encounter challenges with their infrastructure and internal capability when seeking to take advantage of the undoubted opportunities that digital creates.

In these large organisations, the complexities of existing IT infrastructures and the sheer number of stakeholders affected, demands “buy-in” from all impacted parties. This will increase the time required for change.  Start-ups have an advantage vs. established businesses due to the pace at which they can react to change. To enhance competitive advantage many large organisations now seek agility in order to move with greater pace. In terms of gaining greater agility one practical step is to select projects to be run with agile methods and allow them to “cross contaminate” the organisation.

International Data Corporation (IDC), the independent market research firm, believes that many organisations are not moving fast enough to address this challenge. IDC predicts that over the next three years, one third of the top 20 companies in every industry will be “disrupted” by new entrants.

While this doesn’t necessarily mean they will go out of business, it does mean that revenue, profits and their market position will be under threat.

There is significant market hype around digital transformation. However, the reality is that most organisations still have some way to travel to realise their digital ambitions — if, indeed, they have fully defined what these are.

Part 2 of this interview will consider key factors for delivering your digital strategy.

 

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