Digital transformation: Are IT leaders and teams on the same page?

C-suite leaders still see digital transformation through a rosier lens than their direct reports in IT, new research shows. Both groups focus on innovation over costs
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When Red Hat conducts surveys, one of the factors that we keep an eye on is differences within the population we’re surveying, which, in the case of Red Hat's Global Tech Outlook 2022, is IT decision makers at medium- to large-sized enterprises.

Such differences may reveal themselves in job title, industry, or geographic region. There’s a limit to how finely we can slice results – the more granular we get, the smaller the bucket of responses, and the less confident we can be in our conclusions. Nonetheless, it’s useful to seek out cases where the average results obscure important distinctions.

Across a variety of surveys conducted during the past few years, the most consistent pattern we’ve observed is that IT decision makers are far more similar than they are different.

Nonetheless, in this year’s Global Tech Outlook research, which surveyed 1,341 IT decision makers from June through August of 2021, we spotted a few differences of interest around digital transformation, including differences that were also present in past surveys.

[ Want more data and analysis? Download the full Red Hat Global Tech Outlook 2022 report. ]

Not everyone sees digital transformation progress the same

35 percent of C-suite respondents rate their organizations in the "leading" category for digital transformation progress.

One of the most interesting differences: How a respondent thinks their organization’s digital transformation is going varies depending on how high up in the organization they are. If you’re in the C-suite, there’s a good chance you think things are going pretty well; 35 percent say they’re in the “leading” category for digital transformation progress, the highest category. But if you’re a director? Only 14 percent chose leading. Vice presidents were intermediate between directors and CxOs. These results line up with our analysis of last year’s survey.

The most charitable way to interpret this data is that the broader your responsibilities are, the more insulated you are from the messy details and shortcomings that those tasked with implementing a project have to confront on a daily basis. And therefore the easier it is to be positive about how things are going.

That said, not everyone in an organization is likely going out of their way to surface deficiencies and schedule slips to higher-level executives, either.

[ Where is your team's digital transformation work stalling? Get the eBook: What's slowing down your Digital Transformation? 8 questions to ask. ]

Pace of progress accelerating, IT VPs say

Overall, the number of respondents who said their digital transformation progress was accelerating was up significantly year-over-year – from 25 percent in last year’s report to 31 percent in this year’s. In this case, vice presidents were somewhat more likely to say their projects were accelerating (36 percent) than were either directors (31 percent) or CxO (28 percent). While hardly evidence of a vast disconnect, we saw the same pattern last year, albeit with smaller differences.

That organizations have more broadly accelerated their digital transformation projects over the past year is not surprising, given their need in these pandemic times to both provide digital customer services and support employees remotely.

Top priorities for digital transformation

IT leaders at multiple levels rank innovation and security at the top of list.

We also looked at what directors, VPs, and CxOs called out as their absolute top priority for digital transformation.

Last year, VPs were something of an outlier with far more emphasis on simplicity and cost relative to directors and CxOs – and far less emphasis on skill sets as part of digital transformation.

This year, VPs were much more in line with how other IT decision makers answered the same question: Everyone was generally in alignment about innovation and security being the clear top priorities, with some relatively minor differences. Cost was even less of a priority this year across the board, even if it dropped the most in the VP ranks.

Innovation over cost

The further an organization has traveled on the digital transformation path, the more likely it is to be mostly in service of innovation rather than cutting costs.

This emphasis on innovation over cost is also consistent with another observation from the survey. The further an organization has traveled on the digital transformation path, the more likely it is to be mostly in service of innovation rather than cutting costs. Therefore, as more organizations get further along with their digital transformation projects, we expect this trend to continue, absent macroeconomic factors that push efficiency improvements further to the fore again.

At this point, it’s also worth observing just how odd today’s IT priorities would have seemed to many IT leaders of just 15 or so years ago. The initial cloud narrative was mostly about cloud as a compute utility that would make obsolete and at least render uneconomical differentiated in-house computer systems. Author Nick Carr provocatively argued that “IT Doesn’t Matter” in a 2003 Harvard Business Review article. Many agreed.

Of course, costs and budget do matter. As does running workloads in the location and manner in which it makes sense to do so. (Which is the overall idea behind edge computing.) However, it’s also clear that most IT leaders today are primarily thinking about what they can do with computing to better serve the business and deliver better services to customers – rather than to do the same thing cheaper.

Takeaways for IT and digital transformation leaders

If you’re leading your organization’s digital transformation efforts or, perhaps especially, if you’re leading those who are, you might want to check your filters. Are you getting a realistic picture of what’s really going on?

Lack of transparency can be a cultural issue – and our surveys also consistently find that, when pushed to explicitly rank their funding priorities, IT leaders tend to rank company culture near the bottom, even if they say they value it in the abstract.

Digital transformation projects are complex and involve many different parts of an organization. As a result, it would be a bit surprising if everything always went according to plan and didn’t require some coordination and maybe not so gentle nudges from above. If you’re a senior IT leader, be prepared to provide that sort of assistance. Conversely, if you’re tasked with directly implementing a digital transformation project, success will probably require that you feel enabled to ask for that sort of assistance.

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

Gordon Haff is Technology Evangelist at Red Hat where he works on product strategy, writes about trends and technologies, and is a frequent speaker at customer and industry events on topics including DevOps, IoT, cloud computing, containers, and next-generation application architectures.

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