Digital transformation: 3 hard truths

The path to successful digital transformation is far from straightforward, especially in the age of COVID-19. Consider these three often-overlooked realities, says Intel's CIO
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Business leaders and CIOs often undertake digital transformations with finite conclusions and endpoints. As technology innovation speeds up exponentially, it’s clear that we need to reinvent our businesses continually to remain relevant and to thrive.

The C-Suite needs to foster continual digital transformation – not just with an organization’s technologies, but for its entire business. A recent KPMG study finds that more than 70 percent of CEOs say the COVID-19 pandemic has accelerated their digital investments. This requires a broader perspective to reimagine customer experiences and derive value through product, service, and innovative business models.

[ Also read Digital transformation: 5 ways the pandemic forced change. ]

There are many hard realities that we’ve all had to contend with when it comes to digital transformation, but here are three that are often not given enough attention:

Truth 1: You must disrupt yourself … or someone else will

Statistically speaking, the odds of survival are stacked in favor of new companies that come storming onto the field and they are stacked against legacy companies. In the past decade, we’ve seen the emergence of nearly 500 companies with a valuation of over $1 billion each, and we’ve seen GE, the last member of the original DJIA, drop off that list.

Digital transformation can spell the difference between a company’s longevity and its demise.

The difference lies in agility and speed – these companies embrace innovative technologies to adopt new approaches and innovate products, services, and business models to create new market opportunities and meet changing market demands. Digital transformation can spell the difference between a company’s longevity and its demise.

Disruptive technologies are often the triggers for change, and companies that embrace them are propelled forward with a significant advantage over those that don’t. Technology evolution is continuous. As cutting-edge technologies become mainstream, we need to look at the next wave of game-changers. Currently, multi-cloud, AI/ML, IoT, SDI, 5G, and cybersecurity are on the table, and businesses are racing to implement them as part of their digital transformation plans.

At Intel, we actively embrace transformative technologies. We constantly aim to enter new business domains and adopt technologies that can give us a competitive advantage. Examples include:

  • Our “sales assist” tool, which is based on the Intel AI sales platform, changes the way we identify and support our customers. It increases sales coverage and reduces operational costs. It received a value rating of 87 percent from our sales executives.
  • All our new offices are built as “smart buildings” based on the Intel IoT platform. They integrate the BMS with HVAC, lighting, and occupancy sensors, and have significantly improved the quality of service and cost of operations.
  • Grab-n-go lockers and self-setup PCs help to ensure a touch-free PC issuance and collection process. It is a smooth, efficient way to keep employees productive and able to work in remote mode. This has been invaluable in keeping our employees and PC services teams safe during the COVID-19 pandemic.

[ Get answers to key digital transformation questions and lessons from top CIOs: Download our digital transformation cheat sheet. ]

Truth 2: Digital transformation isn't about an IT strategy. It's about leveraging continuously evolving technologies to change your entire business.

Digital transformation projects that are born as “IT initiatives” run the risk of being viewed as changes for the sake of new technology. Digital transformations must be viewed as business transformations, with business leaders not only buying into the proposed plans and value but driving the organizational and process changes that are needed to be successful.

Digital transformation projects that are born as "IT initiatives" run the risk of being viewed as changes for the sake of new technology.

The widespread adoption of technologies means an organization doesn’t gain a competitive edge when it uses them, but rather how it uses them. Success lies in creating balanced IT-business partnerships that provide experts from both technical and business domains so new technologies can be integrated deep into the business.

Intel’s AI projects are a perfect example of this in practice. Together, IT and the business have been able to achieve over $500 million in business value in 2019.

Digital transformation isn’t a “from->to” process that reaches a static, determined “end state.” Today’s competitive pressures and the pace of technological change are simply too great to allow for a transformation to ever be “finished.” We need to view digital transformation as always evolving, always underway – with leaders and businesses embracing a dynamic state of constant disruption.

At Intel, we continually evaluate the latest technologies for their potential as game-changers. For example:

  • We’ve developed and embedded ML algorithms into the future generations of our products to boost power and performance.
  • Disaggregated servers have been introduced into our data centers and have reduced our DC refresh costs by 44 percent compared with full refresh.
  • Intel’s IoT platform has been effectively used to optimize predictive maintenance in our factories, and we’ve reduced unscheduled downtime due to fan filter units by 300 percent.
  • We deployed a new cyber intelligence platform to strengthen our cybersecurity posture based on leading-edge technologies like Splunk and Kafka.

Truth 3: Transformation requires massive shifts in culture, operations, and people – with change and culture being the toughest aspects

One of the more challenging aspects of digital transformation is the human element, especially in legacy organizations mired in deeply rooted cultures. In large organizations, undoubtedly, there will be siloed thinking, fear of change, skillset gaps, and concerns with job security, all of which lead to resistance to change. Employees are the key to change and success lies in the ability to shift to a digitally savvy organizational culture, employee engagement, workforce capabilities, and painting a picture for employees on how they fit into driving this change.

One of the more challenging aspects of digital transformation is the human element, especially in legacy organizations mired in deeply rooted cultures.

According to a recent McKinsey analysis, an organization can double or triple the success rate of digital transformations by having the management team establish a clear story for change, by getting business leaders to ensure collaboration between business units, and by ensuring that standard operating procedures are modified to include digital technology.

A path worth taking

The path to digital transformation has many twists, turns, and hard realities along the way. Bolstering an organization’s resilience is a must in order to deliver the valuable opportunities that come with disrupting your strategy and operations. The leaders who embrace digital transformation as a journey versus an end-state, and who keep an eye on reimagining the norm and embracing the complexities, will find it to be a game-changing path worth taking.

[ Culture change is the hardest part of digital transformation. Get the digital transformation eBook: Teaching an elephant to dance. ]

Archana (Archie) Deskus is senior vice president and CIO at Intel Corporation. As Intel’s CIO, her organization capitalizes on information technology to accelerate the company’s significant growth goals across a diverse portfolio of businesses.