The enterprise struggle with digital transformation initiatives isn’t limited to the organizations seeking change. It’s the channel partners’ fight as well.
Market research reports consistently depict digitalization as difficult to achieve. Recent evidence comes from a report released by Harvard Business Review Analytic Services in conjunction with DxC Technology, a Tysons, Va., IT services provider. About a third of the 376 business leaders polled for the report, “Winning through Change in the Digital Economy,” said their organizations aren’t very digital. That is, less than a quarter of those organizations’ products, operations and business models “depend on their ability to exploit digital information and technologies,” according to DxC.
In addition, nearly 80% of the respondents said their organizations face extensive or substantial change to become “more digital” over the next five years, the report noted.
The Harvard-DxC survey results echo other inquiries into digital transformation initiatives. In late 2017, market researcher Ovum found only 8% of IT executives believe they have achieved transformation and just 16% consider their organizations to be well advanced. The London-based company’s findings are based on interviews with more than 6,300 respondents worldwide.
And this week, Insight Enterprises Inc., an IT products and service provider based in Tempe, Ariz., released a report that polled 104 CIO/CTO executives representing the technology side of the enterprise, and 105 procurement professionals representing the business operations side. The Insight survey revealed consensus around digital innovation as a common pain point: The survey noted 69% of the CIO/CTOs and 68% of the procurement professionals cited developing data-driven insights and delivering technology to boost customer and employee experience as a problem area.
Partners share in the struggle
Business model disruption — think fintechs in the financial services industry — has convinced many enterprises that their digital transformation initiatives are not only worth the hard work, but actually necessary for their long-term success. But the ongoing fight to transform isn’t just the enterprises’ problem. It’s becoming a channel partner issue as well.
“As organizations develop new business models for the digital economy, they need their suppliers to provide a different level of support,” DxC noted. “Thus, the partner model isn’t future-proofed.”
It’s a cascading effect. Business model disruption causes enterprises to launch digital transformation initiatives to keep pace with industry change. Those initiatives, in turn, result in partner business model disruption. As organizations look for partners will different skill sets, some channel companies may be left behind or compelled to undergo their own transformation.
The Harvard-DxC report noted about half of business leaders polled said they must make “significant changes to their partner portfolios.”
The rise of digital consultancies and integrators as a partner category demonstrates that some companies are already retooling to deliver on digital transformation initiatives.
Look for this business model disruption within a business model disruption to continue into 2018 and beyond.