Smart change: Digital Transformation in the Age of Artificial Intelligence

Asia-Pacific digital transformation programs are powering ahead, but the support of artificial intelligence (AI) and robotic process automation (RPA) can take them to a new level

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From Cloud to artificial intelligence (AI), Asia-Pacific organisations have a growing range of technology options to assist digital transformation programs.

Appian, in partnership with IDG, conducted a survey of 305 senior IT managers (175 in Australia and 130 in Singapore) in organisations with 500 employees or more across a variety of vertical industries. 

The research aimed to evaluate digital transformation progress in these organisations, and find out organisational drivers for change.

Agility, customer experience focus

The results of the research found digital transformation is being driven by the increasing need for organisational agility, and better customer experience.

Appian and IDG found a large percentage, 81 per cent, of respondents cited improved agility as one of the top drivers for digital transformation, as a more agile organisation can respond to changing market conditions.

For many organisations, digital is also an important enabler of customer experience, and nearly two-thirds (62%) of IT leaders view it as a key driver for transformation. With customer interaction extending well beyond a corporate or branch office, more C-level IT leaders (74%) are well aware of the need for offering digital customer experience channels, compared with their IT team members (54%), indicating a possible disconnect between organisational tiers.

It seems innovation (58%) and automation (53%) are also top of mind when it comes to the reasons for digital transformation, indicating there is an appetite for new ideas and better efficiency.

Digital transformation progress

The research found businesses in Australia and Singapore have made good progress with digital transformation; however, there is opportunity for improvement when it comes to applying AI and RPA

Nearly half of all respondents (48%) report their organisations are steadily implementing digital transformation, with 12 per cent currently scaling up pilot programs, and 7 per cent piloting projects.

One in five (20%) IT leaders say a digital transformation program is fully deployed and, looking ahead, nearly two-thirds (64%) have plans for new AI and RPA deployments in the next 12 months.

Code, apps drive business value

CIOs are looking to customer service and support applications with more than two-thirds (68%) believing these are a priority for providing value, with automating coming in a close second (percentage).

An application can be procured off the shelf, or developed from scratch. Commercial applications fit a variety of use cases, whereas custom developed applications meet a specific need.

There are plenty of options for developing unique applications, but a high amount of coding can hold back outcomes and introduce technical debt, where custom code has to be maintained to provide ongoing value.

In recent years many Platform-as-a-Service tools have allowed organisations to bridge the gap between common components and specific features. This “low-code” trend is giving organisations the option of achieving app development to get a precise outcome without the overhead of full custom development.

When asked about the ideal future approach for their organisations to build applications that require complex business logic, nearly half (46%) of CIOs stated they anticipate a future shift towards slower, fully custom coding.   

This differed to their IT colleagues, where more than one-third (35%) expect to continue the steady use of faster and easier to use low-code development tools, compared with 28 per cent for CIOs.

Getting alignment right                          

For digital transformation programs to be successful, a number of different stakeholders within the business need to be involved. IT staff must deliver services to meet business requirements, and business leaders must communicate changes and new go-to-market channels and applications.

The research found nearly one in three (28%) IT leaders see lack of alignment and collaboration across the organisation, including siloes, as a big barrier for IT to enable business outcomes.

IT staff tasked with matching business outcomes with technology platforms are generally closer to the challenges of full custom development. With automation, customer service and compliance top application priorities, a move to fully custom coding can accentuate many challenges.

The research found Asia-Pacific IT teams are facing a number of challenges in achieving business outcomes, including: Organisational culture (52%); meeting desired speed of delivery (50%); customer demand (45%); and skills gaps and shortages (43%).

Interestingly, pressure to adopt AI, RPA and analytics (from who?) is also seen as a challenge in 43 per cent of organisations.

In addition to the barriers faced with digital transformation journeys, Asia-Pacific IT teams are feeling the pressure from other organisational issues, including: Risk management concerns (47%); legacy technologies (44%); limited resources to train or recruit staff (42%); and uncertainty about required financial investments (42%).

Building a path to integrated automation

With operational IT professionals recognising the need for more low-code environments, and with legacy systems holding back transformation programs, Asia-Pacific organisations must ensure AI and other automation initiatives are consistent with the wider business, and not deployed in isolation.

While nearly all respondents (98%) report one or more intelligent automation systems already deployed, the future success of digital will depend on how well these systems are applied.

The types of intelligent automation systems deployed include: Artificial intelligence (69%); business process management (56%); robotic process management (48%); machine learning (44%); and chatbots (29%).

While 60 per cent of CIOs cite full integration of technologies, this falls to 55 per cent for non-CIOs, which is yet another example of how operational staff see more challenges than their C-level counterparts.

Automation is clearly the future, but IT and business leaders must manage it cohesively to drive transformation programs and deliver business value.

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Copyright © 2019 IDG Communications, Inc.