Index Suggests Many Organizations Are Falling Behind Digital Business Curve

The accelerated rate at which organizations embraced digital business transformation in the last year is one of those proverbial silver linings that emerged in the wake of the COVID-19 pandemic. Less clear is how far down that path organizations really are.

To provide some insight into the progress of digital business transformation, BMC Software sponsored a survey of 1,200 business and IT decision-makers. Participants spanned 20 industry categories and 11 countries from organizations that had at least 500 employees and annual revenue over$100 million.

Conducted by 451 Research, the results of that survey is being used to create a global Autonomous Digital Enterprise (ADE) index that rates organization based on their level of progress toward implementing the following digital processes:

• Data-Driven Business
• Optimized Technology Buying
• Digital Business Domains
• Adaptive Cybersecurity
• Tech-Savvy Corporate Functions
• Transcendent Customer Experience
• Evolved Role of Central IT 
• Automation Everywhere
• Enterprise DevOps 
• Innovation Ecosystems in a Sharing Economy

Also read: Using Responsible AI to Push Digital Transformation

ADE Index’s Findings

On average, the global ADE Index is now at 39.3%, which means more than one-third of organizations surveyed are moving aggressively down the path toward modernizing their business and IT processes across. Based on the survey results, 451 Research is forecasting the index will rise to 46.1% over the next two years.

While that rate of activity clearly represents significant progress it also suggests that more than half of organizations are, to one degree or another, falling behind rivals that are transitioning toward becoming a digital business at a faster rate. That begs the question: To what degree are those organizations going to be able to survive, much less thrive, through the rest of the decade?

Of course, once the pandemic subsides more organizations might be able to focus on their future. Many are battling every day to simply stay afloat. While there are clearly gaps emerging in terms of some organization’s ability to compete, the number of potential processes an organization can quickly automate are substantial so there is still time to close the gap, says BMC CTO Ram Chakravarti.

The major challenge is identifying a process to automate that will make a significant difference to the business. “It needs to have reasonable high value to the business,” says Chakravarti.

Once an organization successfully automates one process, digital business transformation momentum starts to build as business and IT leaders gain confidence, notes Chakravarti. Organizations, however, should be wary of trying to boil the entire proverbial digital business ocean overnight, adds Chakravarti.

In general, Chakravarti says automation is now table stakes. Most organizations expect the management of IT platforms to become increasingly automated. In fact, most organizations don’t expect to pay extra for those capabilities, notes Chakravarti. Instead, IT platforms that don’t provide high levels of automation simply won’t be considered.

Also: SAP Unfurls Digital Transformation Service

Improving IT Platforms

Of course, it’s not really possible to embrace digital business transformation without automating IT. Organizations can’t afford to hire small armies of IT professionals. For digital business transformation to become ubiquitous the underlying IT platforms need to be able to operate at a level of unprecedented scale with minimal intervention required. 

Arguably, one of the biggest obstacles to digital business transformation are antiquated legacy platforms that were never designed to meet the needs of a digital business operating in near real time. That doesn’t necessarily mean every one of those legacy platforms needs to be replaced but it does mean to varying degrees they do need to be modernized. Otherwise, digital business transformation becomes a whole lot of wishful thinking that in the face of some cold IT realities will never amount to much.

Read next: Edge Computing Set to Explode Alongside Rise of 5G