Most Digital Transformation Is FAKE

FAKE Digital Transformation Hoax Opening Massive Sales Opportunity

Vendors are selling their products as transformative, when they may not be.

Remember Y2K vendor-led hoax that scared the living daylights out of boardrooms and breakrooms across the globe? Well if not, here’s a quick link.

Hundreds of articles predicted late payroll checks, manufacturing systems failing … even so preposterous a thought as a plane falling from the sky if 1999 did not roll into 2000.

Y2K was a massive, vendor-led hoax that made a lot of otherwise useless vendors and their sales reps rich. It had precisely the proper impact on those who sit in board rooms and get their technology understanding from grandchildren, AM Radio, or the New York Times.

We are now in the midst of another totally fake, vendor-led hoax called digital transformation.

We are not saying digital transformation is a hoax. Our thesis is the solutions from the digitally-challenged vendor community will simply not get companies to the Digital Promised Land any time soon. Maybe never. They will, however, take billions from those same companies who are terrified they need “… to do something.”

It all started when truly “digital native” companies such Amazon, Tesla, and others were born without the legacy IT systems that plague most Fortune 1,000 firms. Businesses such as Walmart, airlines, or anyone serving customers directly faced technology demands they could not fulfill.

The legacy software and consulting industry saw a positioning challenge. And an opportunity. Their customers wanted to “digitally transform.” 

These software and consulting firms never realized they would need to deliver new apps, ones that could be built in days and weeks on mobile platforms. They certainly had not done it for themselves. Nor knew anyone else who had done so.

Their marketing teams, ever sensitive to the newest trend introduced by Forrester and Gartner, started positioning their products as “transformational.”

Today, much of the IT industry is being propelled by every sort of inherently non-digital vendor promising to digitally transform their hapless customers.

The word “transform” means a company’s critical capabilities become stronger and different as a direct result of the massive check it is going to write. It means creating customer value. It means faster, nimble, more intimate, less costly, more differentiated engagement with customers on both the desktop and mobile devices.

The hoax being perpetrated is that legacy vendors cannot get client companies there. These aggressive vendors are not there, themselves.

This past week we saw this vendor-led hoax play out for one of the largest companies in the world. We were in Houston with the CTO of a Fortune 20 company. During an enjoyable lunch, we inquired about how the cloud migration was going.

He said, “Well, we are moving everything to the cloud. We use all the major providers. We gave up on IT as something we can deliver ourselves.”

That sounded like a pretty good prospect for cloud sales reps. Then he added, “Lift-and-shift does not work. We tell our Board ‘Sure, we are transforming,’ but we just run the same crap on the cloud we ran in our data centers. Nothing is different except we are not actively managing IT anymore.”

We asked how their “digital transformation” was going. The CTO laughed. He said they were buying time with their Board by moving apps to the cloud. The apps did not operate any differently, they were not faster, they did not use less storage, and they were certainly no easier to make customer-engaging. The great cloud migration, for one of the largest companies on the planet, was just a way to buy time because they did not know how to become truly digitally transformed.

Our thesis is there is a gulf between expectations of Senior Management for what digital transformation means and what they are going to get from all the legacy vendors who promise it is about to become a reality. Vendors who deliver nothing but the same cumbersome legacy systems — running in the cloud instead of in an on-premise data center — are doing their customers a disservice.

We believe as this realization takes hold, a new software and services market will need to emerge as companies realize what they thought was transformation via the cloud was really not very different from 1980’s timesharing.

Just moving apps to the cloud is not digital transformation. Companies are now learning the ugly reality this is a vendor-led hoax.

Reprinted from Software Executive Magazine OnLine