Digital transformation is lopsided, even within the same organization

Study finds technology adoption may lag in one department, while accelerating in another. IT can't keep up.
Written by Joe McKendrick, Contributing Writer

It's well known that some companies are ahead of the curve with implementing cutting-edge technologies, while others are struggling. However, this picture of corporate haves and have-nots may be too simple. The real challenge may be within companies .themselves, with some departments more digitally advanced than their counterparts at another location, or even down the hall. The IT department itself often finds itself on the wrong side of progress. 

Photo: Joe McKendrick

Now, a study of organizations, published in Harvard Business Review, reveals the extent of this uneven divide inside of organizations. "In many companies, we find a growing divide between teams with ready access to automation and AI tools and teams without," the study's authors, a team led by Ramnath Venkataraman of Accenture, state. "The latter find themselves behind the eight ball both in terms of productivity and AI skill development." 

This may be contributing to a sense within the business side that their technologies aren't delivering, as found in a recent survey

Two-thirds of companies explored by Venkataraman 's team "rely on a suboptimal mix of cloud-based and on-premises enterprise systems," the team finds. Compounding the issue, Venkataraman and his co-authors point out, is the fact that IT departments are tied up with maintenance and upkeep, while other departments such as marketing and operations are working with cutting-edge solutions. "IT teams aren't trained on these shadow systems, hampering their ability to support or upgrade them," they state. 

A survey conducted last year by IDC finds more than half of that spending (59%) will come from the IT budget, while the remainder (41%) will come from outside of IT. Line-of-business technology spending will grow at a faster rate than IT spending, at a clip of 6% annually, versus 3% annual growth in spending within IT departments.   

Developers are particularly prone to these disparities, the Accenture team finds. "Some might spend 60% of their day performing automatable tasks. Programmers who leverage AI tools to handle those activities code faster. They also become expert at collaborating with AI systems and less prone to errors."   

The key to overcoming this uneven approach to technology development, the co-authors states, is greater collaboration across the enterprises. Tear down those walls -- and encourage the bringing of shadow IT systems out into the open. They cite the example of a company "burdened by decades of legacy code, spending 80% of its IT budget on fixing its past and only 20% on innovating for the future." 

Rather than attempt to automate these systems, "the company embarked on a wholesale reinvention aimed at outpacing the speed and innovation of its digital-native competitors. They adopted a vertical, modern engineering model, where business experts and full-stack engineers work in integrated teams with agile development practices. They migrated 100% of their IT estate to the cloud, which enabled them to make automation tools available to virtually anyone and any team that could benefit from them." 

(Disclosure: Over the past 12 months, I have conducted project work for IDC, mentioned in this article, in my role as an independent research analyst.)

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