Research from Ensono and the Cloud Industry Forum finds that Digital Transformation Drivers and KPIs Don’t Stack Up
London, UK – Ensono and the Cloud Industry Forum (CIF) today released results from the latest digital transformation study revealing that while cost saving was the most common driver for digital transformation, success metrics do not match. The research asked 250 business and IT decision makers in enterprise organisations across multiple vertical sectors about their digital transformation experiences. When asked about how they are measuring success only 51% said they were measuring cost savings, despite 70% saying this was a key driver. The most cited KPI was customer satisfaction with 52% saying they were measuring this versus just 40% saying it was a driver.
The top three drivers for digital transformation were cost savings (70%), increasing productivity (59%) and increasing profitability (58%). Drivers lower down the list included competing with industry disruptors (35%), differentiation (35%), speeding up time to market (33%) and customer experience (40%). When looking at sectors, interestingly manufacturing and IT see cost savings as much less important (55% and 50% respectively), with more of a focus on productivity and customer experience. Utilities saw cost savings as the biggest driver with 89% responding this way.
Simon Ratcliffe, Principal Consultant at Ensono said: “Digital transformation is fundamentally about business transformation. It is about seeing change – facilitated by technology and hybrid IT – as a revenue generator rather than a cost reduction function. Primarily, it needs to be seen as an opportunity for growth. Growth through innovation and the delivery of the best service, product and experience to customers and through finding new and quicker routes to market. The focus on cost savings is outdated and will negate transformation efforts, limiting its scope and impact. This could ultimately have longer-term implications for the business in the digital era.”
Almost all (99%) are intending to measure success in some way and the majority said that the current value achieved was either in-line with expectations or, in almost half of cases (48%), higher than expected. Business decision-makers are even more positive, with 65% stating that digital transformation is delivering better results than they had anticipated, though just 32% of ITDMs think the same.
“It is promising to see that nearly all organisations are measuring the success of their projects. However, the objectives and KPIs do not align, indicating a bigger problem. Either the strategy is not tied down and organisations are ‘doing’ digital transformation for the sake of it, or the strategy is not being communicated adequately. Whatever the root cause, for digital transformation strategies to succeed, the IT department, the business and the board need to have a clear and shared vision, and that vision needs to focus on people first, with the right technology facilitating,” Ratcliffe added.
Alex Hilton, CEO, CIF said: “When the Cloud Industry Forum first started researching digital transformation two years ago, it was a relatively minor concern, with only 51% having started the process. In this latest study, 100% of the organisations we spoke to reported that they were pursuing digital transformation and some 16% stated that they had already completed it. Great strides are being made, but organisations need to ensure they have the right vision, objectives and the appropriate measurements in place to ensure it delivers to the business.”
For business leaders managing lots of complexity or disrupting the status quo, Ensono delivers complete Hybrid IT services and governance, from cloud to mainframe, tailored to each client’s journey. Whether you’re leveraging the power of the cloud or modernizing legacy technologies, you’ll be on track to operate for today and optimize for tomorrow. Named a Top 15 Sourcing Service Provider by ISG, some of the world’s most successful companies rely on us to help them be great at what they do. Ensono has over 1,000 associates across North America and Europe and is ranked 21st in The Sunday Times 100 Best Companies to Work For. Our offices are headquartered in greater Chicago.
About the Cloud Industry Forum (CIF)
The Cloud Industry Forum (CIF) is a not-for-profit membership driven trade body established in 2009 as a direct response to the evolving supply models for the delivery of cloud based software and IT services.
Under the direction of our members, CIF has three priorities:
Create a platform to discuss, engage and partner within the cloud supplier community to ensure thought leadership and market direction. We do this through regular members meetings, media and customer events, whitepapers and market research – an example of the latest Digital Transformation report can be found here.
To drive a common and public level of transparency about the capability and substance of Cloud Service Providers through a process of self-certification to an EU recognised Code of Practice. This Code of Practice enables CSPs to present their proposition as trusted suppliers whilst raising their credibility and brand which are all publicly accessible via the CIF website.
Acknowledging the digital skills gap, CIF has built a Professional Membership program enabling IT professionals to see best practice of cloud adoption. Following a Cloud Adoption Roadmap, users and suppliers can enhance their skills and achieve Professional Certification via an online training process.