The COVID-19 crisis has revealed both challenges & opportunities few could have expected. It showed how quickly people & business can adapt to “a new normal,” how many things we can truly do or augment-by-doing it “online”… that perhaps most companies don’t require most employees to be present in-office 5 days per week from 9AM-5PM in order to be productive…
A recent survey conducted by Deloitte & Fortune Magazine showed that 77% of CEOs reported that this crisis accelerated their digital transformation plans [1]. The pandemic has permanently accelerated digital transformation and the adoption of new & disruptive technologies. According to a large enterprise study by Twilio, COVID-19 accelerated companies’ digital communications strategies by a global average of 6 years.
If we look at what history taught us, we’ll see that companies investing in innovation through a crisis outperform those that do not. Today we see every person & company – small and large – talking about changes, development, innovation, & improvement. Ninety percent of executives believe COVID-19 will fundamentally change the way they do business, and 75% indicate that the crisis has created significant opportunities for growth [2]. Digital transformation has become a buzzword.
Despite all of the “buzz,” innovation investments are down. Way down.
Executives must weigh cutting costs, driving productivity, & implementing safety measures against innovation. According to McKinsey & Company, enterprise executives believe that they will return to innovation projects “once the world has stabilized, the core business is secure, and the path forward is clearer” [2].
So why cut innovation budgets knowing the growth opportunities this crisis presents? Why move focus away from innovation when it’s believed that innovation now matters most?
The answer is quite simple. They’re too busy to try, and too scared to fail.
You can almost sympathize with them. From our very own experience taking companies digital , we hear first-hand reports of small POC projects averaging $500,000 USD’s, spread across 6-12 months of time. Add another $1 million dollars & 24 months time before something’s rolled out in production…not to mention the human resources required to deliver such a thing. Considering the fact that 70-95% of enterprise innovation projects fail, it’s surprisingly easy to understand why enterprises are innovating less in the middle of a global crisis.
From the information above, we can make some conclusions:
1. COVID-19 accelerated digital transformation and technology roadmaps
2. Nevertheless, innovation budgets were cut – during the time we arguably needed it most
3. Innovation projects are plagued with challenges – not limited to budgets, timelines, & failure rates
So what should enterprises do with this information? Should they follow their beliefs, realize growth opportunities and try something new? Or should they wait “once the world has stabilized, the core business is secure, and the path forward is clearer”? Alternatively, perhaps enterprises should wait until there’s a more prominent use-case…until other companies in their industry have tried the disruptive technology themselves, to avoid risk even further?
If every enterprise waited for perfect information, with the perfect market conditions…well…that’s arguably no longer considered “innovation”! Innovation presents an opportunity…for those to be first, for those to capture market share, for those to gain a competitive edge. New & disruptive tech presents opportunities ranging from operational efficiencies to new business models, to new partnerships, new insights, and better decision-making.
So here’s what we believe is the route of the problem (in simple English words): It’s really hard for big companies to try new things. To put it another way…enterprise innovation is currently – unnecessarily – hard! We’ve got big plans to help fix that.
Companies and corporations schedule their digital transformation processes for years. They write elaborate business plans. They spend too much & take too long to complete simple proof-of-concepts. Integrations between the new, disruptive tech & existing legacy systems is a complete mess (purposefully neglected by many tech vendors). And far too many people must be involved for far too long in order to see end of a simple POC project possibly meet expectations.
84% failure rates for digital transformation projects is real, and it’s high [3][4]. Not to mention all digital transformations & innovation projects that are never attempted at all – as a result of some of this data.
Ultimately, we believe that change is necessary, and enterprises must evolve. Gone are the days of software upgrades & migrations once every 3-5 years. Gone are the days of 24 month business plans, and $500K POC’s.
We strongly believe that enterprises of the future must and will be different. Enterprises of the future will be agile, adoptive & resilient. Successful organizations will be defined NOT by profitability, but by ADOPTABILITY. The ability to adapt to changes, & experiment, will BE the new competitive edge.
Enterprise vendors will be forced to re-think their solutions offerings also.
The World is reinventing itself. And so should we.
[1] A case of acute disruption. Digital transformation through the lens of COVID-19 (Deloitte)
[2] Innovation in a crisis: Why it is more critical than ever (McKinsey and Company)
[3] Why 84% Of Companies Fail At Digital Transformation (Forbes)
[4] Couchbase research reveals a majority of organizations expect to fail in four years if digital transformation approach is unsuccessful (Couchbase)
The post WHY ENTERPRISE INNOVATION IS CURRENTLY FAILING appeared first on DeepDive Blockchain (ASTERI).