Are You Helping or Hindering Digital Transformation?

EPAM Continuum Investigates a Leader’s Role in Driving Transformation 

We all are living in digital world now, and every business — from mom-and-pop shops to multinational corporations and conglomerates — are using IT advancements and digital tools to improve their strategy, capabilities and operations. Entering this digital realm requires transformation, which is more than just implementing new technology and processes. The key drivers of digital transformation are people, but, according to analysts, they are also identified as a top barrier to success due to poor planning, inadequate leadership, and cultural resistance.

At the end of 2022, EPAM Continuum launched a survey of more than 900 senior leaders from technology, digital, data, product, HR, learning and development and talent acquisition departments all over the world to explore what they think about driving digital transformation and experience in their day-to-day work.

The questions we sought to answer were:

• How is IT perceived in organizations — as a general support function or a critical business driver?
• Do IT and business leaders receive proper training to support digital transformation?
• Do business and IT speak the same language and understand each other?
• How do IT and people departments partner and split roles in hiring, developing and retaining tech talent?
• How do IT and people departments evaluate their technical and people management knowledge to optimize hiring, developing and retaining tech talent?
• What are the reasons why technologists leave a company?

The results confirmed and elaborated further on what we see in many companies. We all know that the success of digital transformation heavily relies on the commitment and involvement of executives and senior leaders. They play a crucial role in envisioning new business models, creating actionable strategies, and restructuring every aspect of the organization, including processes, budgets, incentives and talent. In Part One of our research report, we’ll talk about leadership role in driving digital transformation and share our findings about the ways leaders are inadvertently hampering their organizations’ digital transformation strategy, why it matters and what you can do about it. Here’s an overview of what we found…

More than half of business owners and C-suite executives still perceive IT no more than a general support function.

This perception of IT’s role in the company can result in several challenges. Firstly, it can lead to the disconnect between technology projects and strategic business goals, wrong technology investments and wasted resources. Secondly, it can lead to missed opportunities for innovation and business growth, as the technology organization cannot effectively help the company harness the efficiencies and scalabilities of technology. This can result in lagging behind competitors and losing critical market share. Thirdly, it can lead to an inability to attract and retain top technology talent. Nowadays, technologists don’t want to be just the ticket-takers, they are looking for meaningful work that translates into the real-world business impact. Failure to connect technologists' work to business value can result in them feeling undervalued, leading to difficulty in retaining skilled employees.

79% of surveyed leaders confirmed that technology and business organizations don’t understand each other.

When business leaders lack an understanding of technology, they may make unreasonable demands and decisions that can be impractical. Similarly, when technology leaders don’t understand the business, they can’t collaborate in achieving strategic outcomes. Lack of a shared vocabulary or common understanding of each other’s world results in misaligned priorities and poor decision-making, including overspending, underinvestment, and reduced profitability. Moreover, the communication breakdown between groups can lead to negative emotions and a divided culture, contributing to conflict and an "us versus them" mentality.

Only 37% of technology executives and 10% of business executives were educated on critical digital transformation topics.

Leading successful digital transformation is a complex and challenging task that requires developing new capabilities, navigating cultural change, balancing short- and long-term objectives, and managing anxiety and cognitive dissonance. There is no one-size-fits-all approach to digital transformation, as each organization has unique strategic goals and culture. Executives must develop technical, professional and individual capabilities to lead their companies forward. Not perceiving technology as a business driver and not understanding the totality of the business, inclusive of technology, are fundamentally the result of leaders being undereducated about digital transformation and under-supported in implementing it.

In Part One of our research report, we’ll share more details on our findings and several actionable insights on how you can approach the described challenges in your company to successfully drive digital transformation.