More than 60% of global GDP last year was projected to have been dependent on digital technologies. So it’s no surprise that companies have increasingly transformed their digital offerings by capitalizing on new developments in cloud computing, artificial intelligence and emerging data technologies.

Digital transformations, however, have historically posed some big headaches for companies. When organizations undertake a large-scale transformation, it will fail around 70% of the time, according to McKinsey & Co. Even when they get it right, it takes companies around three years to compete in a digital market, according to Deloitte MCS Ltd. For those efforts that fail, survey results show it’s often not the technology that faltered — it’s management not supporting the change and employee resistance to change.

There’s also a philosophical misunderstanding when it comes to digital transformations, according to KPMG.

“It’s wrong to reduce digital transformation to technological innovation only. There is often a strategic problem at the basis of any digital transformation, and it’s usually about the future security of a company,” said Wim Ilsbroux, partner of strategy at KPMG. “Companies ask themselves how they can adapt their structure and strategy to an ever-changing environment in order to provide an adequate answer to a new reality.”

It’s a complex problem, one that is important to get right to mitigate a loss to finances, reputation and a company’s customer base.

Gaps in key areas

Complicating the matter is the impact on the skills gap in the digital space. While 100% of surveyed companies said they were currently engaging in or planning digital transformation projects, more than half said they lacked sufficient skills in key areas, according to a recent 451 Research report commissioned by Hitachi Vantara LLC, a digital technologies and solutions company. The most critical gaps, according to the report, were in data science (42%), internet-of-things deployment and development (48 %), and in robotics deployment and operations (60%). Due to that skills gap, at least 37% of respondents said they had no plans to implement IoT-led initiatives.

“Faced with too many priorities and too few people, companies need a focused, sustained approach that derives outcomes as quickly as possible,” wrote Sid Sharma, IoT Practice Leader at Hitachi Vantara, in a recent release. 

Strikingly, though it was once seen as holding back Industry 4.0 and digital transformation initiatives, the survey indicated that 95% of respondents were seeing IT/OT convergence. In fact, two departments are collaborating adequately or better for IoT projects, according to those interviewed for the survey.

It’s for all those reasons that companies such as Hitachi Vantara utilize their industry expertise to focus on outcome-centered approaches. Because of the high failure rate among digital transformations, Hitachi Vantara has sought to build more robust solutions through its partner ecosystem.

“Our partners are really leading the way in the area of cloud in terms of helping customers understand the complexities of the cloud. They’re truly the trusted advisor,” said Kimberly King, senior vice president of strategic partners and alliances with Hitachi Vantara during a recent interview with theCUBE, SiliconANGLE Media’s livestreaming studio. 

When those partners look at a potential customer’s complete infrastructure, they consider various factors, including workloads, critical applications and a customer’s unique architecture. Hitachi Vantara looks at its partner ecosystem as an extension of its organization and seeks to marry the right customer with the right partner to help them achieve their goals, according to King. That includes ensuring they keep their costs in check and that they don’t have any security concerns.

“And that they have availability for the solutions and applications that they’re trying to move to the cloud, which is most important,” King added. “So, we really look at our ecosystem as a specialty ecosystem that adds high value for the right customers.”

That partner ecosystem is intended to help organizations when they face challenges with their cloud infrastructure. Partners can help with those workloads, critical applications, architecture and infrastructural needs.

Hitachi Vantara also operates a digital selling platform that allows customers to leverage the solutions and demo systems. Because there are so many other solutions out there, the company needs to be one step ahead to give them the “solution capability and the expertise they need for their customers,” according to King. The company has also pointed to its existing alliances, such as one with VMware Inc., as an example of a crucial partner.

“Our formula is to help our partners build their cloud services with our solutions and then on-sell them to their customers as a service,” said Russell Skingsley, chief technology officer and global VP of technical sales at Hitachi Vantara, in a recent interview with theCUBE.

“As an example, VMware. They’ve got nearly 5,000 partners selling VMware cloud services. And many of them are our partners too,” he said. “So we kind of see this as a virtuous cycle: We’ve got product, we’ve got an alliance with VMware, and we work together with partners in common for the delivery of the as-a-service business.”

Looking ahead at what’s to come

With the world increasingly moving into the digital space and embracing new technologies, companies have prioritized digital transformation, especially given projections on where the industry could go from here. The coming year is expected to see a speed-up when it comes to digital transformations, according to Hitachi Vantara.

“We are seeing it as a catalyst for implementing DataOps as part of an enterprise-wide change. We often see our customers building a data operating model to serve their new digital customer experience,” said Radhika Krishnan, chief product officer at Hitachi Vantara, who was recently quoted in a CXOtoday.com article.

Cloud technology will continue to redefine almost every industry and activity in 2023, underscored by the continuation of the “everything-as-a-service” trend, Krishnan predicted.

“As IT and OT converge, the demand for DataOps will end up serving more interconnected applications, devices, algorithms and machine learning models that drive digital experiences,” he said.

Although the motivations to secure a digital transformation are driven by a requirement to utilize the best available technology, in 2023 companies may be eyeing another set of priorities as well. The 451 Research report commissioned by Hitachi Vantara also indicated that companies are juggling competing digital priorities, including business optimization, employee retention and ESG. The top driver continues to be the optimization of business processes and operations.

“Digital transformation and its potential to create value for society, environment and economies will depend on how fast certain industries can adopt and ready their workforce for the cloud, cybersecurity, 5G, AI/ML and IoT,” Sharma said. “Companies must be selective about their business’ most critical outcomes and appropriately align it with the necessary investments in software, automation and services.”

Although ESG finished eighth as a driver, more than 80% of respondents said they expect its impact to increase significantly over the next two years. Drivers to meet those ESG goals are coming from other pressures, according to Ian Hughes, senior research analyst of internet of things at 451 Research.

“Increased efficiency and sustainability are competitive factors for enterprises. Digital transformation helps make these efficiency improvements, and many of the ESG requirements achieved are almost a bonus,” he said.

The statistics are eye-popping: 60% of global GDP in 2022 were projected to have been dependent on digital technologies, but transformations fail most of the time. Digital transformations will only continue to increase in frequency in 2023, making potential solutions to headaches all the more valuable.

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