What are the ingredients of digital transformation success?

They include working with trusted partners, a commitment to continuous improvement, prioritizing the business and a dedicated budget, according to a Forrester/ThoughtWorks study.

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Finding the right tech talent is a pressing issue for executives and a new study finds that the right talent is hard to come by regardless of how successful firms are with their enterprise modernization efforts. Successful firms recruit, invest and retain knowledgeable staff (71%) and work with trusted partners (76%) to compensate for whatever skill and culture gaps exist within their organization, according to the report, "Secrets of Successful Digital Transformation," by Forrester and global software consultancy ThoughtWorks.

The study also found 81% of decision-makers reported that utilizing a trusted partner's skills/expertise is as or more important for success than choosing the right cloud infrastructure.

SEE: 5 things that impact successful business transformation (TechRepublic)

A continuous commitment to change management

Further, modernization efforts are not one-and-done initiatives. Sustaining digital transformation success requires a continuous commitment to change management, the study found. "Success in modernization efforts doesn't necessarily lead to an organization that can thrive long term. A company can execute a single modernization initiative, but true digital transformation requires a dedication to a continuous process of ongoing change."

Only 46% of decision-makers reported that their organizations' initiatives were part of a continuous improvement effort but those that did rate it as the most critical reason behind their organizations' success.

Seventy-six percent of successful organizations reported that enterprise modernization took at least 12 months to demonstrate business value, the report stated.

Another element of success is prioritizing the business when defining a roadmap, according to the report. When asked about what the most important goals were of their organization's modernization/transformation efforts, respondents cited:

  • improving customer experience
  • improving data insights or business intelligence
  • improving IT agility
  • improving customer retention
  • improving the security of digital capabilities and infrastructure.

Their least important goals?

  • Reducing technical debt for current applications
  • Decoupling monolithic applications and allowing individual teams to release independently
  • Achieving short-term cost savings
  • Improving employee productivity
  • Improving reusability of technology components or business services via APIs and microservices, for example.

Take a cross-functional approach but keep a dedicated budget 

Decision-makers at successful organizations reported that a true cross-functional transformation process includes stakeholders from all parts of the organization such as IT, business, finance and more having involvement in the modernization initiatives, according to the report. 

"An effective modernization culture and strategy must include strong leadership, including support and guidance from executives and, perhaps most importantly, a dedicated budget to execute transformations,'' the report said.

It also requires a monetary commitment. In fact, 71% of successful organizations fund their enterprise modernization programs through a dedicated digital transformation budget.

Respondents said they demonstrated value to executives through a mix of customer-focused business metrics—first and foremost through customer feedback, followed by progress and speed metrics.

Successful transformation = tangible results 

Enterprise modernization initiatives are difficult but there are real, quantifiable benefits for organizations that can navigate the challenges, the report noted. Top benefits include improved IT agility (76%), better CX (74%), increased employee productivity (72%) and improved data insights (72%).

Forrester and ThoughtWorks suggested a number of steps organizations can take as they begin to executive their transformation initiatives:

  • Take a broad approach to building out your skills portfolio. It takes time to develop or recruit people with the skills required to execute and maintain the transformation. Partners can fill gaps.
  • Prioritize customer-facing applications and those where velocity matters. Applications and workloads that serve customers can drive business value.
  • Align transformation efforts to expected business goals. When the benefits of modernization decision-makers expect were compared with what they actually attain, "we find that modernization goals are largely attainable. And even though operational and technology improvements might not be as important, these benefits are also achieved."
  • Plan on a 12-to-18-month horizon but expect to adjust along the way. Organizations should see indications of success or failure before the 18-month midpoint for most successful transformation efforts. They should also see early indicators by the 6-to-12-month mark. Use frequent feedback to identify blockers and take corrective action. If progress is not demonstrable at the 18-month mark, then it's time to consider stronger corrective actions.

"As the survey results found, the business benefits of transformation efforts are many-fold. Successful organizations gain increased agility and productivity while shortening time to market and significantly increasing customer satisfaction," said Mike Mason, global head of technology at ThoughtWorks, in a statement. "Interestingly, having the right people, skills mix and collaboration techniques are actually more important than specific technology choices such as which cloud provider to use in a modernization effort."

The survey was conducted by Forrester Consulting on behalf of ThoughtWorks among 409 digital transformation and modernization decision-makers at organizations that have had successful results. The survey was conducted in February.

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