Advanced Computing in the Age of AI | Sunday, October 2, 2022

Digital Transformation: Strategic Imperative or Overrated? 

It turns out the transition to zeroes and ones—the vaunted “digital transformation” many companies seek—isn’t going as smoothly as many vendors would have them think. Like most organizational changes, the embrace of digital technologies such as AI, blockchain or whatever else is being hyped at the moment is mostly proceeding in fits and starts.

That is among the findings of an examination of how companies are faring as they seek to integrate digital technologies into their daily operations. According to a survey of nearly 700 executives conducted last month, IT consultant PointSource concludes in a study released this week that “many are still jumping into technologies that do not align with their business objectives or truly address their organization's pain points.”

In some cases, digital technologies may even be exacerbating the “pain points” as evidenced by infighting among departments over modernization resources or wasting time tracking down and sharing digital data internally. Nearly two-thirds of those polled said digital transformation has heightened competition for company resources while fully 90 percent said searching for and sharing digital data was costing them time and money.

That finding seems to undercut many of the benefits vendors of digital technologies emphasize when pitching their products and services. In many cases, respondents said digital technologies often add a layer of complexity, indicating that vendors either need to make products easier to use or provide more up-front training.

With a dizzying array of new digital applications emerging for technologies like machine learning, predictive analytics and blockchain, it is apparent that a technologist ought to be at the table when charting the course of a digital transformation. A hard-headed approach is needed to cut through the hype to pinpoint digital platforms that will provide a return on risky investments.

Yet, the PointSource survey found that only 11 percent of respondents said company CTOs oversee the purchasing process. Hence, the report notes, “it's no surprise that technology investments are inspiring such a high degree of pain.”

Which digital technologies are most useful? The survey offered respondents of menu of four entrees: a broad category dubbed “voice-activated technologies,” blockchain, AI and facial recognition. Despite a growing roster of AI-based enterprise applications, more than half of respondents said they were unprepared to use them.

As with consumer applications and services that provide workers with an introduction to digital technologies, the survey found that voice-activated systems are making more inroads in companies because workers are familiar with devices like Amazon Alexa and Google Home.

Other industry surveys are more bullish about digital transformations in sectors like energy. Findings released earlier this month by software vendor Aspen Technology Inc. (NASDAQ: AZPN) concluded that 40 percent of the energy executives it polled said digitization was delivering average savings on operating expenses of 16 percent. While most are adopting analytics technologies, most listed a lack of data science expertise as a barrier to successful digital transitions.

While sectors like energy are making smoother transitions to digital operations, others continue to struggle. “Eventually, companies need to collaborate across departments, focus on where they are going, and then allow technology decisions to be the subplot supporting their primary narrative,” said Stephanie Trunzo, PointSource’s chief digital officer.

A photo accompanying the PointSource report (see above) depicts a tightly bunched group of workers staring intently at laptop, tablet and phone screens. The image may unwittingly reveal part of the problem with digital transformation, and how employees should be using digital tools. Eye contact, communications—debating pros and cons—seems equally important as all those reports, tables and charts that digital technology has delivered to these workers.

In the final analysis, timing, hard work and a vision for providing a product or service that customers really want or need may be just as important as investing in new digital tools.

About the author: George Leopold

George Leopold has written about science and technology for more than 30 years, focusing on electronics and aerospace technology. He previously served as executive editor of Electronic Engineering Times. Leopold is the author of "Calculated Risk: The Supersonic Life and Times of Gus Grissom" (Purdue University Press, 2016).

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