Why You Should Work With A Specialist On Your Digital Business Journey
Digitally transforming your business is a requirement today. Organizations that don’t will find themselves on the wrong side of history. Most CEOs know this. Almost two-thirds (64% of respondents to one survey) say their company is likely to be disrupted by competitors with superior digital strategies if they don’t act.
Although the 2016 World Economic Forum Report predicts that digital transformation will boost business value by more than $100 trillion worldwide over the coming decade, the reports coming back from the field are less sunny.
Past research from McKinsey found that fewer than one-third of businesses achieved sustainable performance gains with their transformations. However, the most recent research returns even grimmer news: only 16% of businesses agreed that digital transformations have successfully improved performance—and also prepared them to maintain those improvements over the long term.
An additional 7% say that performance improved, but that those improvements were not sustained.
Because of evidence like this, many enterprises are turning to third-party specialists to guide them through what can be a complex—and risky—process. This both reduces risk and drives higher ROIs (returns on investment) than if you attempt a DIY (do-it-yourself) journey. Accenture research shows that 88% of companies today use a third-party service provider for at least one aspect of their digital transformations.
Service providers deliver the goods
The Everest Group specifically studied the effect of using third-party service providers for all or part of a digital transformation. Its Pinnacle Model, maps out the “digital readiness” of organizations. Everest dubbed the companies that were ready to begin their digital transformation journeys “Pinnacle Enterprises” and found that 90% of these high-performance companies use a third-party provider, versus just 40% of the “unready” companies.
Here are four reasons why it pays to engage a service provider for your digital transformation journey.
They bring a fresh, outside perspective
Service providers often see opportunities or possibilities that you don’t. They are also usually on top of the latest innovations, so they know what’s available now, what’s going to be available soon, and what’s still stuck in a hype phase. This helps future-proof your investments as you plan your digital journey.
It’s important to keep in mind that digital transformations are not about isolating particular challenges and identifying unique digital solutions to individually fix them. It’s more holistic than that.
Instead, digital transformation is about creating an interconnected, integrated digital environment that is foundational for supporting the mission-critical functions of your business as a whole. This is where service providers can shine. Whereas some enterprises may struggle with siloed, myopic internal efforts to digitally transform, service providers can bring the experience and expertise you lack across a broad spectrum of innovations: data science, big data, artificial intelligence (AI), the internet of things (IoT), machine learning…you name it. This puts them in a unique position to help you apply those innovations to your business.
They’ve helped other businesses that are working through the same processes
Digital transformation is not easy. And each enterprise’s journey is unique. But these journeys do share many similar characteristics, and run into similar issues. There’s the challenge of moving from a proof of concept (POC) to a project that scales appropriately; there’s the fact that finding qualified technologies with the skills you need will be difficult. Savvy, seasoned service providers have seen it all before. And they can bring that accumulated wisdom to your operations.
Genpact found that enterprises undergoing digital transformation collectively spend $400 billion annually but only get subpar results because of common missteps they make. Another survey of directors, CEOs, and senior executives identified that the risk that accompanies digital transformation is currently their number one concern. Hiring a service provider who’s seen it all before significantly lowers those risks.
They can supplement—and train—your internal workforce in emerging technologies
IT workers are scarce. Specialists in machine learning, AI, the IoT and other advanced technologies are even more difficult to hire and retain—and expensive when you do.
By supplementing your existing workforce with experts and specialists from third-party service providers, you can get the job done while ensuring that continuous training and knowledge transfer is also occurring as your people work side by side with experts in blockchain, AI, the IoT, and other emerging technologies. Indeed, McKinsey found that transformation success is more than three times likelier when an organization invests the right amount in developing digital talent.
Notably, 63% of Pinnacle Enterprises ask service providers for assistance with training, compared to 35% of the other enterprises.
In an era in which business success is being defined by successful digital transformations, the role of service providers is emerging as an important one. For organizations looking to achieve their transformations by deploying a range of new digital applications and platforms—many delivered via the cloud—service providers can significantly increase the chances of success.
Data provides a significant advantage to those undertaking digital transformation. Learn more about how data drives digital transformation in our new eBook.
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