JimitArora, Author At Everest Group

Digital Transformation Success Is NOT Rooted in Technology | Blog

September 11, 2019

Here’s a sobering fact: Everest Group research found that 78 percent of enterprises fail in their digital transformation initiatives. Failure here can mean multiple things, including unsustainable returns, lack of user adoption, or, even worse, abandoned projects.

The following picture illustrates one of the key reasons they’re failing. What is it?

It’s a Steaming Pile of Technology – what we call a SPOT. And, unfortunately, it’s where most organizations start their digital transformation journey.

Why do I say unfortunately? The truth is that a technology-led approach won’t enable you to achieve the business value you expect from your digital transformation initiative. Indeed, as you see in our holistic, interconnected Digital Success Model, technology is only one of eight components that you need to get right to succeed.

Let’s take a quick look at all eight components, which we categorize under strategy and solution.

The strategy

With so much at stake, you have to begin your digital transformation journey by defining where you want to go and how you’ll get there. The four critical strategy components you must address at the very onset are:

Vision
This must clearly and concisely cover what you specifically want to achieve in both the short- and long-term. For example, is the initiative to drive revenues, cut costs, improve customer experience, extend competitive advantage, be compliant? The objective functions will fundamentally dictate your digital transformation journey’s “rate of spin.”

Economics
Typical funding models don’t work in digital transformation programs because they focus on achieving ROI in a short timeframe. Instead, you need to establish the right budget centers in the to-be-transformed business and functional unit/s, and the right funding mechanism – CapEx versus OpEx. Additionally, you should put in place funding gates to ensure your business objectives are met during interim check-points.

Organization and cultural
We consider organizational culture and change management the most important element of the digital strategy model. In order to succeed, you must create an empowered, cross-functional journey team that aligns the C-suite, business stakeholders, and IT stakeholders. Emphasis on agility, risk tolerance, and decision-making speed and flexibility are key. And to make sure your new culture takes hold and sticks, you need to adequately budget both time and money for a comprehensive change program.

Performance and governance
As management guru Peter Drucker said, “You can’t manage what you can’t measure.” To effectively manage the success of your digital transformation journey, you need to identify and measure metrics that tie back to your vision. You also need to establish interim milestones for these metrics to track progress, allocate funding, and drive any needed course correction. Many enterprises find that investing in a digital transformation Program Management Office can help them handle performance and governance on the operational, tactical, and strategic levels.

The solution

Once you have your strategy in place, you can move on to shaping the solution.

Technology
When selecting your technology, a “one-off, one and done” approach may deliver very short-term spurts of success, but it won’t deliver sustained business value. To achieve ongoing success, you need to embrace a platform-based operating model as the foundation for your digital transformation journey. What we call a Digital Capability Platform helps you look at all your users – your employees, your customers, and your partners – in the context of all the technological enablers to drive the customer experience, decisions, process efficiency, and scalability and performance.

Talent
The best strategy, funding mechanisms, technology, etc., can’t deliver to your expectations if you don’t have the right talent. Indeed, your ability to compete in the digital era depends on having the right talent, at the right time, in the right places. You need to prioritize using an elaborate sourcing ecosystem to find the talent you need today, and establish a robust resource management program to help you plan for future skill requirements.

Data
Not surprisingly, data is a key enabler of your digital transformation success. Consider this: our research found that 100 percent of successful enterprises use digital initiatives to collect data and perform analytics for better insights that drive better outcomes, and 94 percent use some form of data and analytical solutions to augment their strategic decision-making. You need to be able to convert your existing volumes of data into a high-quality, actionable enterprise asset to achieve longer-term digital transformation success.

Ecosystem and sourcing
And finally, digital transformation cannot happen within the boundaries of your organization, or even the boundaries of the industry in which you operate. By partnering with start-ups, academia, government, tech vendors, staffing companies, transformation partners, orchestrators, and peers, you can unlock breakthrough value from your digital efforts.

This full-scale realignment of your digital strategy and solution ecosystem is challenging and can feel overwhelming. But it’s critical to your short- and long-term success. Our IT and digital transformation membership offering can help. To learn more, please click here.

How to Construct a Digital Transformation Analytics Roadmap | Blog

April 18, 2019

Is data really the new oil fueling digital transformation? Absolutely. A company’s ability to make fast-paced, meaningful decisions in a volatile business environment is key to competitive differentiation. Indeed, industry leading enterprises are using data and analytics to adapt to dynamic market conditions, drive continuous innovation, and accelerate the speed of doing business.

However, many organizations are struggling in their efforts to harness the value of data to aid their transformation efforts. The single most important reason for these failures is their technology-first thought process. They invest in the latest big data and analytics tools, AI and ML algorithms, and visualization technologies, and subsequently determine how to drive adoption.

This approach is flawed. Why?

Technology in and of itself does not provide answers to how businesses must adapt for success in a data-driven future. It’s not enough to have the best tools; organizations need to start with a broader vision built on a foundation of business requirements. Companies that succeed at meeting their analytics objectives let business goals drive the technology, and not the other way around.

The business objectives

To develop an effective and value-generating analytics roadmap, enterprises need to start with their strategic business objectives. These tend to fall into three broad categories:

• Top-line growth – Value derived from better understanding potential target segments to enable greater revenue generation. For example, improved customer satisfaction, creating long-term customer loyalty, etc.
• Cost reduction – Value created by leveraging analytics to identify the cost leaks, such as redundancies and inefficient processes, and trim expenses. For example, minimizing procurement spend, plugging revenue leakage by reducing inventory cost, etc.
• Risk and compliance management – Value gained from monitoring, preparing, and managing risk and compliance on a real-time basis, and anticipating any potential risk-related issues, e.g., fraud detection and monitoring.

The building blocks

After clearly establishing their business objectives, organizations need to make important decisions about four distinct building blocks:

• Data – At the heart of every analytics solution lies data in its raw form. Enterprises need to have a data strategy in place to cope with increasingly large and complex data volumes coming from diverse sources in a wide variety of formats (text, images, audio, video, etc.)
• Technology tools – Core technology tools and platforms for data ingestion, processing, preparation, and visualization are critical. But they cannot be one-off implementations. Enterprises should focus on building integrated technology ecosystems to address immediate, distinct use cases without considering the mid-to long-term creation of sustainable capabilities
• Talent – This requires the creation of competencies around the specific, expected data and analytics capabilities. Given the huge demand/supply gap for data and analytics professionals, particularly data scientists, e-enterprises must proactively and enticingly attract and retain the right talent
• Infrastructure – The focus here is on ensuring that the IT infrastructure can handle the volume, variety, and velocity of the data and the complexity of the analytics.

Once they’ve laid the business objectives and building blocks groundwork, enterprises can develop their digital transformation analytics roadmap. In order to achieve the desired business outcomes from the analytics process, they need to embrace a structured, five-step iterative approach.

Getting this right is critical, and the stakes are high. The organizations that proactively embark on a data-driven digital transformation journey – i.e., every company– will gain a significant competitive advantage. Those that fall behind risk irrelevance.

For more information and insights on how to create a digital transformation analytics roadmap for your business, or to share what you’ve been able to achieve with your roadmap, please contact me at [email protected].

Everest Group’s 3rd Annual Service Provider of the Year™ Awards: Did Your IT Services Provider Win? | Sherpas in Blue Shirts

February 21, 2018

2017 was a seminal year for IT services. Digital adoption finally broke free from the shackles of marketing’s lip service and moved from “pilot” to “program.” The of role CIOs resurged as business stakeholders relied on them to deal with an ever-growing supply landscape and procurement conundrum to deal with new-age technology. And growth challenges appeared to have bottomed out for the two key industry verticals: BFSI (the largest) and Healthcare & Life Sciences (the fastest).

Hence, our 2018 Service Provider of the Year™ awards for IT services providers – our third edition – recognize companies that not only weathered a challenging year but reinvented themselves to chart out a new phase of growth for 2018 and beyond.

Our methodology

We select the IT Service Provider of the Year award winners based on the consolidated scores they achieve in the Star Performer, Leader, Major Contender, and Aspirant positions on our PEAK Matrix™ evaluations. In 2017, 67 service providers participated in 24 PEAK Matrix evaluations.

Awards categories

This year’s awards categories:

Leader boards
- ITS Top 20: A list that recognizes the top 20 service providers
- Top 10 Challengers: New this year, this list recognizes the top 10 service providers with annual revenue less than US$2 billion that increasingly position in the PEAK Matrix evaluation segments as challengers to the established leaders.
Individual awards
- Leader of the year: Recognizes the service provider(s) with the maximum number of Leader positions
- Star Performer of the year (overall): Recognizes service provider(s) with the maximum number of Star Performer positions.

We awarded these recognitions in the following areas:

Overall IT Services
Application Services
Digital Services
Cloud and Infrastructure Services
Banking, Financial Services, and Insurance
Healthcare and Life Sciences

Highlights of 2018 Service Provider of Year Awards

Here’s a look at the top five on the ITS Top 20 leader board:

Accenture and TCS took the top two positions in the ITS Top 20
- Accenture retained its top slot from 2017
- TCS moved into second place, leapfrogging Cognizant and IBM

Accenture won Leader of the Year (overall)
TCS won Star Performer of the Year (overall)
And in the new Top 10 Challengers category, LTI and Virtusa snagged the top two positions.

Wondering if your IT services provider – or the firm you work for – received one of these coveted awards? See the complete list of winners.

Investments in Digital Pay Off for Retail Banks | Sherpas in Blue Shirts

January 9, 2018

Our banking analyst team just finished its evaluation of how the leading North American retail banks are doing in their efforts to create the best digital customer experience, and we want to share some highlights from this breakthrough research. This is our third year of assessing 30 of the largest retail banks. The premise for the research is to examine the new consumption context of financial services – where customers are demanding a SUPER (Secure, Ubiquitous, Personalized, Easy, Responsive) banking experience.

Our research assessed the functionality and pervasiveness of the banks’ consumer-facing digital interaction layer to help establish correlations with superior customer experiences, stronger customer engagement, and higher overall business growth.

Based on our research, nine U.S. banks (Ally Bank, Bank of America, Capital One, Chase, Citi, PNC, SunTrust, USAA Bank, and Wells Fargo) and two Canadian banks (CIBC and RBC) have been featured as “Digital Banking Pinnacle Enterprises™.” These banks demonstrated business results that stood above the rest:

Better growth – 3% higher growth in deposits
Better efficiency – 9% lower efficiency ratio
Better customer experience – 20% higher mobile application ratings

We have also recognized four retail banks as “Agile Performers,” as they made the greatest improvements in 2017. These banks include Ally Bank and Bank of America, both of which launched multiple initiatives to meet millennials’ customer experience expectations, such as virtual assistants for personalized experiences and voice-command enabled banking capabilities. USAA demonstrated best-in-class adoption of digital banking channels and maintained its frontrunner position in customer-centric innovation. USAA also joined the cryptocurrency world by adding the ability to display customers’ bitcoin balances. SunTrust made considerable investments into self-service technologies across its branch network and recorded strong growth in customer engagement on social media.

The retail banking industry will continue to make dramatic changes in the next few years. These shifts will require banks to have increased capabilities to deliver an enhanced customer experience whose key elements include:

A paradigm shift from the current “product” mindset to a “customer lifestyle” mindset to combine, package, and offer products/services from banking and allied businesses
Open banking and partner ecosystems leveraging APIs to integrate third-party services into the bank’s digital banking platforms
Collapsing the siloes across the front-, mid-, and back-office to create a frictionless front-to-back experience
Harmonized data repositories to enable a unified view of the customer
A technology operating model that embraces automation, AI, blockchain, and cloud to enable the needs of the “new business”

We believe the current Digital Banking Pinnacle Enterprises have created superior customer experiences because they deliberately invested in their digital capabilities. But the bar for success is constantly moving, as the industry continues to witness rapid and significant changes. Nonetheless, our data from the last three years establishes an increasing correlation between digital functionality and business outcomes. Banks that are able to quickly adopt a human-centered design thinking approach, build usable experiences, and create a culture of obsessive customer focus will be able to better differentiated experiences, achieve growth, create shareholder value, and ensure market relevance.

To read all of our research findings, see our report: Digital Effectiveness in Retail Banking | Pinnacle Model™ Assessment 2018: Journey of North American Banks to Build SUPER Experiences

Future Proofing Your IT Services Model | Executive Point of View

February 9, 2016

With the emergence of digitization, the Internet-of-Things, cloud, and other technology disruptors, IT’s role in and value proposition for the business units it supports have become integral to how competitiveness is established and maintained. Business that are incapable or unwilling to leverage the full power of the technology advances or resist adapting to the new business models that are being enabled, will, in relatively short order, become laggards in their industry and, in some cases, cease to remain in business.

Download this Executive Point of View

Everest Group’s New IT Service Provider of the Year Awards 2016 | Sherpas in Blue Shirts

January 26, 2016

Everest Group is proud to release the first edition of its annual PEAK Matrix Service Provider of the Year™ awards for IT Services 2016.

Before you turn a blind eye to another set of service provider awards in a market already flooded with matrices, quadrants, and other such convoluted shapes…these are special recognitions of a small handful of providers that are unique stand-outs.

2015 was a seminal year for our IT services PEAK Matrix™ evaluation program. Under the aegis of four key ITS practices – Banking, Financial Services & Insurance (BFSI), Healthcare & Life Sciences (HLS), Application & Digital Services (ADS), and Cloud & Infrastructure Services (CIS) – we published a whopping 26 PEAK Matrix evaluations, featuring double click views on capabilities and market success across practice sub-segments.

While we appropriately recognized performance in individual segments, what started to unravel was a picture of consistency by a few service providers that was hard for us to ignore. Hence, while there indeed are Leaders and Star Performers for each of the segments we evaluated, the composite picture clearly shows that some deliver consistent leadership and top performance across many different categories.

As today’s enterprises navigate the complex landscape of next-generation and legacy technology, a global business footprint, and a complex vendor portfolio, the PEAK Matrix Service Provider of the Year awards will help them to identify the best of the best – service providers with strong broad-based capabilities and successful service strategies that align well with the evolving enterprise IT demand.

The award categories are:

ITS Top 20: We arrived at this list using a consolidated score reflecting points received on individual evaluations based on tiered scores for Star Performer, Leader, Major Contender, and Aspirant positions.
Individual awards categories: These awards are based on the count of Leader or Star Performer positions across the category evaluated
- Leader Of The Year
  - IT Services (Overall)
  - HLS
  - BFSI
  - ADS
  - CIS
- Star Performer Of The Year
  - IT Services (Overall)
  - HLS
  - BFSI

Here’s a PEAK peek at the top five on the ITS Top 20 leader board.

See the complete list of winners.

Have you had experience with one or more of these providers? Our readers would love to hear your views about them!

Why Mess with a Good Thing: Recalibrating Our PEAK Matrix Assessment Methodology | Sherpas in Blue Shirts

June 22, 2015

We regularly make small adjustments to our PEAK Matrix™ assessment methodology – minor tweaks to fine-tune our approach to align with market evolution. This year, however, we have decided to undertake a more comprehensive modification to the assessment.

Why mess with a good thing? To make it even better and more relevant. In particular, we’re making changes to keep pace with the rapid evolution of IT and business process services, particularly as innovation, intellectual property (IP), digital, and technology-driven solutions take center stage in the delivery of these services.

While our fundamental principle of using a fact-based assessment remains core to our methodology, we are enhancing our PEAK Matrix assessment methodology in three principle areas.

Maximize IP and innovation. We are recognizing the rising value of IP and innovation in global services by significantly increasing the weighting assigned to them. Of course, IP and innovation have always been a part of the PEAK Matrix Assessment, but their status will rise in the assessment, as has their significance in the global services market.
Eliminate FTE count. At the same time, we are eliminating FTE count as an assessment dimension altogether. As technology increasingly fills the roles FTEs had managed in the past – at lower cost and often better outcomes – the size of a provider’s delivery talent pool has become irrelevant.
Minimize scale. The provider’s overall scale – a combination of financial strength and focus on the service area being assessed – will remain as part of the assessment, but will decline in importance in the evaluation, making room for innovation to take on a larger role.

Together, we believe these changes assure that our assessment framework continues to be aligned with the emerging and future direction of the global services market.

We expect these changes to have a couple of implications for service providers. First, those providers that bring innovative programs to their clients will be recognized for their efforts – and expense. Furthermore, overall scale will have less impact on the providers’ ratings, assuming they demonstrate high levels of innovation and good business outcomes.

The recipients of these services, the enterprise buyer, will have a much clearer view of each provider’s ability to deliver innovation and outcome-oriented solutions. And they will gain insights that will help them better understand how service providers’ capabilities align with future objectives.

As the dynamic global services industry evolves, we will continue to make adjustments to our PEAK Matrix assessment methodology – some minor, some major – to ensure that it retains its universal relevance and value.

Because sometimes messing with a good thing is a good thing.

Will Cloud Kill The CIO? Survey Says No | Gaining Altitude in the Cloud

March 26, 2014

Sometimes it’s hard to distinguish the facts from hype in enterprise cloud adoption. This is why Everest Group and Cloud Connect continue to conduct our annual joint survey to understand why and how enterprises are migrating to the cloud, and what they are migrating to the cloud. Check out my blog on InformationWeek for more findings on the Enterprise Cloud Adoption Survey. Here’s an excerpt:

If supermarket tabloids covered enterprise cloud adoption, their headlines would scream “The CIO is Dead,” “Security Concerns are Old News,” and “Cloud Makes Consumption Easy—No External Help Required.” And as we perused these headlines in the checkout line, we would wonder how much truth lay behind the hype.

To distill fact from fiction, the Everest Group launched the Enterprise Cloud Adoption Survey in 2012, in conjunction with Cloud Connect and UBM TechWeb. We have just completed the third annual survey of enterprises and vendors and will share the results in Las Vegas on Monday, March 31, at Cloud Connect Summit, co-located with Interop.

Infosys: Not Guilty… But Not Yet Out of the Woods | Sherpas in Blue Shirts

August 22, 2012

On August 20, 2012, the Alabama District Court dismissed the whistleblower retaliation lawsuit initiated by Jack Palmer against Infosys. Interestingly, the judgment also ordered the plaintiff to bear the court costs, further underlining the emphatic rejection of the lawsuit. Yet in the face of this particular win for Infosys, it is important to understand the implications of the judgment for Infosys customers and investors, and for the offshore IT services industry as a whole. Should all concerned breathe a sigh of relief, leave this chapter behind, and move on to other important business? Unfortunately, no – at least not yet!

Infosys’ legal troubles are far from over. Earlier in August, Satya Dev Tripuraneni, a California-based former Infosys employee also filed a lawsuit against Infosys for whistleblower retaliation. While the judgment in the Palmer case provides encouragement to Infosys, we must take into account that the Tripuraneni lawsuit was filed in a different jurisdiction with a different judge, and has a different set of facts.

The second and more important thing to keep in mind is that the judgment in the Palmer case only exonerates Infosys from any wrong doing in response to the whistleblower’s lawsuit. It does not provide any additional clarity on the underlying issue of visa misuse by Infosys. This is currently the subject of a federal criminal investigation, and the outcome is likely to have a more direct impact on the company and the broader services market.

Unlike the whistleblower case, Infosys is on potentially weaker footing on this issue, as it admitted that the Department of Homeland Security found errors in a significant percentage of Form I-9 employer eligibility verifications with respect to employees working in the United States. An unfavorable outcome from the investigation could prove quite serious, as the consequences extend well beyond a financial fine to possibly include reputational damage, a drop in market valuation and stock price, and a shift of client work away from Infosys. The implications may also impact other Indian heritage service providers with by proxy negative reputation overhang.

The favorable resolution of the Palmer case brings much needed good news to Infosys and other India-based companies, and Infosys itself can take a deep breath and feel somewhat validated in the position it has taken to date. However, the dark clouds of the criminal investigation continue to loom ahead, and Infosys – and by extenstion the industry – is far from out of the woods.

Announcing our inaugural conference: Everest Group Engage, The Pragmatic Edge: Designing Your Future. Learn more.

Author: JimitArora