Digital transformation was phase one. Service transformation is phase two.

Digital transformation was phase one. Service transformation is phase two.

Organisations have lost sight of the original intentions of digitisation, says Dave Stevens

Credit: ID 91240364 © Sashkinw |

We’ve reached a fork in the road when it comes to digital transformation. Although scepticism of the concept reigns supreme for many, that doesn’t stop IT decision-makers from voting it their number one priority in 2019.

The fundamental issue with digital transformation is not that the industry is misguided about its application; it’s that in the race to imbue the phrase with meaning, organisations have lost sight of its original intentions.

This isn’t because they’re incapable of doing so: it’s because they’re getting bad advice from the wrong places.

Many large managed service providers are slow, prone to getting caught up in red tape, take customers for granted, and cannot provide a complete, whole-of-business service. Their size and specialities are often their Achilles heel, and they can’t allow for the flexibility that clients require.

As an alternative, large vendors with their complete suite of ‘out-of-the-box’ solutions also leave a lot to be desired, too. Their vested interests mean they are more commonly focused on their stock price rather than putting the real needs of individual clients first.

Where Australia lost its way on digital transformation

Focusing on digital, rather than service transformation, has led to an environment within organisations where there’s a mess of competing priorities and varying areas of ownership.

When transformation or IT modernisation projects are being undertaken, multiple providers are being sourced and charged with driving different, often unintegrated, outcomes. This approach is not only expensive, but makes it impossible to keep individual providers accountable when something goes wrong.

Digital transformation was meant to be the silver bullet for organisational overhaul, but instead, Australian businesses are still scratching their heads on how to plan or measure it properly, and according to Gartner, have little appetite to experiment with new business models at all. Only 8 percent of Australian organisations are harvesting results from digital transformation, the report found.

This shows there’s a gap in the expectations of digital transformation versus the outcome it is actually producing, which is problematic when it’s all the industry seems to want to talk about. The result is businesses spending more and more money on expensive, large scale software solutions that have perhaps a 50/50 chance of delivering a return.

Led by a string of high-profile governmental IT failures, such as the Census outage, robodebt scandals, and the lack of visible achievement from the once highly-touted Digital Transformation Agency, it’s not hard to see why digital transformation has lost its gloss.

If we’re parking digital transformation, what should drive the change that’s needed?

It’s high-time we stopped obsessing about digital transformation and instead focus on an outcomes-focused approach: service transformation.

Instead of vendor-led transformation, which frequently only benefits them and lacks an impetus on delivery, you need to work with an independent service provider who can help lead you on your own service transformation journey.

Not only should they be independent, they also need to have the broadest of skillsets, work with multiple technology providers, and be able to provide you with unbiased, holistic advice.

This individual focus from a service provider who is unencumbered from having to navigate the blurred lines of responsibility and who is working for you and your benefit will drive true service transformation for Australian organisations. Not only that, it will result in increased future flexibility should solutions and services need to change further down the line, a more intimate client relationship, and a deeper curation of needs.

Recognising agnostic benefits for businesses through a partner-led market could significantly improve both the perception and output of transformation efforts. Now that the market has had time to mature, service transformation throughout the whole business is what’s needed, rather than digital transformation as an end-result. In many ways, it represents the classic ‘journey not the destination’ philosophy.

The multiple supplier conundrum

Carving up and tendering different parts of the transformation journey or, at its most basic, different aspects of your IT environment can appear to be a no-brainer: get specialists in with expertise in particular, narrow areas and get a best-in-class solution at the end of it.

The reality, however, is that it can be fraught with dangers, because IT leaders end up with a stack of providers with competing priorities that take a lot of time and effort to manage. Not only that, they might be recommending technologies and approaches that don’t integrate, overlap, and leave an organisation with a stack of manual work that needs to be done on an ongoing basis just to keep things running.

Service transformation needs a whole-of-business approach because it involves the total rethink of customer service and customer outcomes. For this reason, we will always advocate that organisations work with a holistic provider with access to a broad skillset, who is in it for the long-term, and who can deliver on every facet of what you need.

In the ICT space, this means the transformation of the front and back-end, including everything from the core applications running your business as well as your BI and collaboration tools, to end-user support services, networking, infrastructure, telephony, hardware, security, and project governance. As a result, you can be certain that everything gets delivered and will be manageable post-implementation.

Using a single provider guarantees that the systems put together have been done so with an eye to the whole, that you can manage them efficiently both during and after the transformation project, and that, should a problem arise nor or further down the line, there’s an unparalleled level of responsibility to get things right, fast.

Dave Stevens is chairman at Brennan IT.

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