Why your digital transformation problem is a connection problem in disguise

Digital transformation (DX) is on the agenda for every business looking to stay competitive in a world that is moving at lightning speed. Sadly, most DX projects fail to deliver. It's easy to point fingers, but the real problem likely is a matter of missed connections.

Digital transformations are failing

The overwhelming majority of digital transformation projects fail.  

And the numbers are truly troubling. Around 70 percent fail outright, and nearly 87 percent fail to meet their original expectations. Over the past decade, these stats have only been getting worse. 

This is a big deal – especially when you realize that nearly 60 percent of executives call digital transformation (DX) their most critical growth driver.  

While troubling, it's also understandable. Most DX projects rely on a complicated cloud landscape that is no longer a centralized “one cloud” view. Instead they require a flexible, distributed, decentralized multi-cloud approach. This shift from a singular cloud architecture creates incredible opportunity but introduces more complexity.

The three market megatrend expectations

In the background to these failing DX projects amid a complicated multi-cloud environment are three powerful megatrends – megatrends that add to the potential of DX but also overwhelmingly to its complexity:  

Continuous customer experience: Today’s customers demand personalized interaction, greater customer intimacy and seamless, omnichannel experiences, 24 hours a day, 365 days a year. Every customer impulse must be met by possibility, interaction and fulfillment – or that customer will go to a competitor.  

Hyper automation: The only things done manually are those that must be. The market has no time for latency and lag, blind spots and silos. Everything has to be linked, communicated and transparent to everyone involved.  

Ecosystem-driven transformations: There’s zero room for piecemeal transformations. Businesses have realized that the only way forward involves understanding and working at the level of ecosystems. It all has to work together, it all has to make sense, and it all has to be unified—complicated by cloud ecosystems that have emerged for each hyperscaler, each with its own strategy and standards.

Dealing with the complexity of DX 

These megatrends have massive upside and the organizations that can deliver on them will emerge as market leaders for years to come. Achieving this is by no means simple. It requires a ridiculous amount of coordination between systems, departments, partners, supply chains, clouds and people. This all is complex – and the complexity of any given DX project may indeed be its downfall. However, the way to deal with it is not abandoning newly adopted technology or by reducing scope. It is to create better connections. 

Section 2: It’s a connection problem

Whatever problem you think your DX project has – it’s actually a connection problem! 

Many things get blamed. Many fingers get pointed. And many red herrings get chased.   

But they have an issue in common. It all comes down to connecting data, applications, people, processes, clouds and things. Businesses that try to tackle one at a time – such as data first and applications second – fail.  

When everything is connected, then approaches must be holistic and yet iterative at the same time. You can’t solve every problem simultaneously. But as you focus on how to better integrate your applications, you must consider data integration and pipelines as well. When you dig into your process management problems, you must look at your IT portfolio comprehensively with an eye toward the future. Nothing is ever as discrete as you’d like – it's batch and real-time, it's hybrid and multi-cloud, it’s processes and people. It’s a combination of the right solutions, plus a holistic approach, that empowers you to become a truly connected enterprise

To do this starts with challenging the three myths of the modern market: 

Myth 1: You can’t be as agile as newer, cloud-native businesses   

The cloud has been sold as the super scalable, highly automated, innovation booster that saves money, delivers new services and lines of revenue and improves customer service in one fell swoop. And yes, it can do all that – and more. It's why 94% of enterprises in the U.S. use a major cloud provider to run at least some of their applications, according to Forrester.

So it’s natural to feel like cloud-native businesses will always be more agile than yours. After all, that’s exactly what those businesses are hoping the market keeps on believing. 

The reality is not so simple. Businesses of all sizes are operating in a more complex, hybrid mix of private cloud, public cloud, and on-prem hosting that they will need to manage for the foreseeable future. In fact, according to that same Forrester report, 81% of companies are operating in a hybrid cloud environment.

Today’s super-connecting solutions have leveled the agility playing field—and in many cases tipped the game in favor of businesses born before the cloud. 

For instance, an integration platform as-a-service (iPaaS), done well, connects everything on premise and in the cloud – no matter the cloud or multi-cloud, private or public – so that you can use microservices and APIs to innovate on mobile and online, reach customers on their terms and unleash rockstar developers to do what they do best rather than burning their time on boring tasks. 

So even if your business is already fluent in cloud and hybrid architectures or if part of it still relies on the mainframe (many do!), you can use that valuable data in modern, mobile applications. Start-up-like agility is within reach if you know how to connect everything and choose your partners and platforms. 

Myth 2: It’s either your strategy or your execution that’s to blame  

When your DX project fails to deliver, teams fear that either the strategy or the operations is all wrong. Which one was flawed? Teams will reach a conclusion after hours of analysis and deliberation and set out to blame – and then improve – one or the other. 

The truth is that both your strategy and your execution can be flawless – but if they aren’t flawlessly aligned and connected, then you could be doing all the right things but not ending up supporting the strategy you thought you were. This is a process problem, and your processes are only as good as their connection to the strategy.  

The key to solving this mystery is all about smart process mining, management, and alignment. It begins with broad data capture, moves through AI-based and automated analysis, and ends with being a connected enterprise where processes just work—and people get to be creative. 

To connect strategy and operations requires peering into your processes, capturing data and identifying happy paths. These are the ultimate, touchless, streamlined processes that don’t require human input and can be multiplied throughout your organization.    

Myth 3: You don’t have the resources to solve today’s problems (let alone innovate)

It’s easy to blame a lack of resources – because resources will always be limited.  

But lurking beneath this obvious jump to conclusions is a deeper cause: inefficiency as a result of unconnected things. That’s right, we’re talking about IoT

Your devices, infrastructure and every other thing you have need to be connected, communicating and improving your efficiency, customer service and revenue. And in a smart way.  

You get there by employing an intelligently designed Internet of Things platform. And you connect to it via edge, cloud and beyond to provide an essential part of your business’s data foundation

Suddenly, the resource deficit you thought you had turns out to be a surplus. Good, now your IT people can work on what’s interesting, your creative thinkers can get to innovating and by connecting it all together, you get to win.  

ESG on your mind? Get the guide to becoming a sustainable, connected enterprise

Taking a holistic approach to DX  

Part of the reason these myths are still with us is that they cover their tracks so easily. Enterprises that haven’t solved their connection problems see red herrings everywhere they look. Here is agility. There is execution. And that is about resources.

It’s only when you step back and consider the connection problem that you realize the solution is a holistic one. The complexity you need to solve is all about how you connect data, people, apps, processes, clouds and things. Attempt that in silos, and expect failure. The complexity you need to solve is all about how you connect data, people, apps, processes, clouds and things—how you integrate them. Attempt that in silos, and expect failure. But consider it all together, and it's easier to focus on the right solution. And a whole lot easier to succeed. 

Section 3: The truly connected enterprise

We live in a connected world. The connection of people, technology and processes creates the connected experiences that your employees, partners and customers demand. To deliver those experiences, you need a truly connected enterprise that turns your data into value through deeper analysis and insights that lead to new business models.   

But creating a truly connected enterprise is not easy. A misstep today can have a lasting effect on your ability to compete in the future. It requires you to establish a data foundation which will provide the fundamental, structural support needed to enable digital transformation. This data foundation must deliver on three clear requirements: 

Software AG Marchitecture

Simplify the integration of applications, devices, data and clouds

Resist rushing your organization towards a digital transformation that leaves your core systems behind. Resist heedlessly implementing point-to-point SaaS integrations for short-term gain at the cost of increasing fragmentation. You need easy and reliable connectivity for all of your data sources – wherever they live, and whatever they do! That means data in SaaS apps, legacy and mainframe apps, custom apps and data stores, across clouds. Integrating and automating everything – from applications to IoT devices and beyond – will make your business processes more efficient. It will also make your enterprise more agile than any startup.

To do this requires an integration platform that can expedite business processes and workflows by synchronizing data and automating integrations, eliminating data silos and allowing for better visibility and easy access to your data. The aim being that you gain better insights so you can make better business decisions.  It should be a unified, hybrid integration platform that runs in any variation of hybrid and multi-cloud environments for an API-led approach. It should come with hundreds of connectors to packaged and legacy apps, as well as SaaS apps, mainframes and IoT devices. And it should scale automatically to fit your organization’s growing integration needs. And – you’ll want to write this down – the right platform is built for both business users and IT. That means easing the IT backlog rather than adding to it. 

Empower streamlined processes

As the global supply chain crisis has laid bare, market conditions can change at a moment’s notice – and success in today’s business world demands lightning-quick evolution. That’s the purpose of business process transformation: to recognize new opportunities, observe and adapt to shifting market realities, and agree on a structured plan to continuously transform your business based on new, stronger foundations. 

This takes a business process analysis and management platform that provides a foundation to keep strategy and operations aligned and orient all employees around a “single way of working.”  It can help you forge a deep transformation of your business model, support IT/cloud migrations, and place your strategic vision into practice across your operations. It should also have operational excellence written into its fabric: Allowing you to align your organization end-to-end with an adaptive enterprise management system to gain greater visibility into your operations – and be able to make impactful, efficiency-based, future-proof business decisions. Look for the ability to roll out your operating procedures and policies organization-wide in a shared, single source of truth based on automated process governance. Anyone, anywhere, anytime, should be able to contribute to your transformation.  

By embracing process mining, you should be able to measure how your processes execute, and how this differs from your processes as planned. You can then go back and fix any discrepancies – before they impact your bottom line.  And seek out a BPM solution that supports sustainability initiatives, allowing you to put processes at the heart of your ESG strategy to achieve your sustainability goals and secure your brand’s reputation – ahead of the competition.  

Connect “things” like sensors, machines and robots 

The amount of data generated by IoT devices is expected to reach 73.1 ZB (zettabytes) by 2025. What if you could use this data to create new products, services and business models that support additional revenue streams? What if you could decrease operational costs by not only increasing efficiencies but by increasing customer satisfaction and retention with IoT capabilities designed for innovation? 

The right platform can handle edge computing, whether thick or thin – or any combination of the two along a spectrum. It lets your robots, sensors and machines let you know when they need to be serviced. It tells your people when to expect a shipment. And it automatically collaborates with your partners, so when something turns up in the supply chain, you all have the tools to communicate, navigate and solve. 

IoT is a team sport. This includes hardware manufacturers, connectivity experts, security consultants, data scientists, cloud providers, domain experts, systems integrators and application designers. Taking this approach will put control in your hands: giving you access to self-service tools and empowering your developers to design differentiating logic and applications that set your business apart. 

Section 4: Simplifying the connected world

Your problem is a connection problem: the solution is to truly connect your enterprise – where systems integrate more seamlessly, technology connects more effectively and processes run effortlessly. In your truly connected enterprise, information and insights flow freely and securely, allowing you and others to turn data into value so you can compete, transform and grow. The technologies that enable this form a data foundation which simplifies the integration of applications, devices, data and clouds; empowers streamlined processes; and connects “things” like sensors, machines and robots. But note: the champions of this connected enterprise aren’t data scientists. They’re you – the IT and business change agents determined to execute on a strong shared vision. And equally determined not to fail. Here are some that have gone before you:    

Section 5: Conclusion

Digital transformation is both incredibly important – and fraught with risks.  

You can avoid these risks by seeing the 3 myths of the market for what they are – myths.  

When you realize that all three problems are really connection problems you gain the power to pursue successful connection solutions. 

Remember, those solutions must be holistic, tackling integration and APIs, processes, and every thing that gives the Internet of Things its name. That includes people, processes, clouds, data, apps, devices, sensors, robots, machines and more.  

Our global economy favors collaboration over competition, integration over isolation and experience over exclusion. The right way forward is establishing a flexible data foundation to provide the fundamental support needed to enable digital transformation across a complicated hybrid and multi-cloud environment. Promoting interoperability, and the open sharing of secured data, this foundation will enable you to: 

  • simplify the integration of applications, devices, data and clouds; 
  • empower streamlined processes;
  • and connect “things” like sensors, machines and robots.  

Most importantly: It will enable you to operate your business while keeping systems and data where they are, instead of fighting a hopeless centralization battle.  

Growing complexity is real. But so are the solutions. Choose your partners and platforms wisely.  

Section 6: About Software AG

Software AG simplifies the connected world. Founded in 1969, we help deliver the experiences that employees, partners and customers now expect. Our technology creates the data foundation that integrates applications, devices, data and clouds; empowers streamlined processes; and connects “things” like sensors, devices and machines. Our industry-leading products span integration & API management, IoT & analytics and Business Transformation—each simplifying how data flows between people, departments, systems and devices and providing the fundamental, structural support needed to enable digital transformation. Currently, we’re helping 10,000+ organizations to become truly connected enterprises, reducing complexity and making smarter decisions, faster. 

But no two enterprises are alike: no two solutions identical. That’s why we not only have the award-winning technology but the expertise to be your partner, to listen and understand your challenges, and work side by side with you so you’re positioned to win against your competition.​ We have 1500 experts able to help you strategize, plan, build, implement and if you need us to, manage your solution spanning from an integrate everything project to accelerating your journey to a multi-cloud environment. Together, we can connect people and technology for a smarter tomorrow. 

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