We have been talking about the digital transformation for a number of years now. And although many interesting developments keep appearing that are part of the transformation the exponential change that was predicted by many does not seem to happen. 3 reasons why the transformation takes more time.
1. It takes time to move from CAPEX to OPEX
OPEX refers to the costs of a company’s day-to-day operations while CAPEX refers to the expenses a business incurs in order to create benefits in the future. Though the advantages of moving (parts of) your IT spending into the ‘OPEX’-realm for IT services that are subject to fast changes (which applies to most IT Services..) seem obvious, CFO’s are still reluctant to do so. Part of this is due to the CAPEX paradigm in which organizations and its financial managers have been raised. But also many organizations have considerable ‘sunk cost’ that needs to be written off. So, what is the right moment to switch? Finally, going from CAPEX to OPEX often means the move from ‘doing it yourself’ to ‘let someone else do it for me’. This means you need to think about things like security of the partner you select. Will you still be sleeping at night when your General Ledger and CRM are ‘floating in the cloud’? And of course, your IT department may have something to say about this as well… which brings me to the next reason.
2. IT departments defending their position
As stated in the previous point, bringing part of your IT ‘to the cloud’ often means doing less yourself. Some IT departments will not be happy about this. IT departments have considerable power (mainly because of their knowledge) when it comes to selecting new IT products and partners and they may use that power to defend their position.
3. Overwhelming choice of (new) solutions
Cloud Services like SaaS (Software as a Service), PaaS (Platform as a Service), aPaaS (application Platform as a Service), IaaS (Infrastructure as a Service), DaaS (Desktop as a Service) are fast becoming the norm for any business. However, the number of solutions is growing so fast that selecting the right system for you requires a significant investment in time and money. Also, the market is changing so rapidly and the competition is growing accordingly that it’s hard to predict which players will survive. So, sticking to your old but stable systems may not seem such a bad idea..
So, is the digital transformation stalling? We don’t think so. But there are reasons why the transformation may take more time. Being aware of it may help you to better find your own way through the digital transformation.