How is the digital transformation today?

With the current situation of the pandemic, the concept of digital transformation has been highlighted, which will continue to be important in the years after the coronavirus situation.

It is certain that digital processes will continue to evolve rapidly as they have been doing so far, contributing to a faster transformation both in the social, economic and industrial fields.

Companies were forced to adapt to new needs, making each of them have to set their own budget and pace depending on the characteristics of today’s industry. All this as a consequence of the understanding that the digital transformation would not stop and was inevitable.

The General Director of Zucchetti Spain, Justino Martinez mentions that: “Covid-19 has accelerated the digitization process of companies. Many companies have realized that they were not prepared to address issues such as telecommuting, collaborative work, online security or the exponential growth of e-commerce. Suddenly the cloud and electronic commerce have become a lifeline, and as a consequence, they have had to adapt quickly to the new situation ”.

The companies that are able to adapt to the development of IT will be the only viable ones. Likewise, terms such as AI, blockchain, Big Data, cybersecurity or IoT make people more aware of the importance that technology brings.

Likewise, teleworking is a new modality that has come to stay due to its various advantages. It is characterized by allowing to put aside the face-to-face and have more flexibility in schedules and improve productivity.

In the matter of present advances, it can be found that AI is already established in sectors such as education, mobility and e-commerce. On the other hand, the use of 5G will provide the possibility of developing the IoT with the objective of offering rigorous control against the coronavirus.

Another of the fundamental tools is blockchain technology, which allows predicting future situations similar to the previous one.

Óscar Bernacer, Director of Cloud presales at Oracle, mentions that: «the demand in business digitization must be understood in three axes that are interrelated and must be addressed in an integrated manner.»

It also indicates that there are three main ones that are:

People: This is to indicate that companies need to have trained personnel with both knowledge and experience in the IT area and have the ability to adapt and adopt technology depending on the needs of the company.
Process: These processes have to be well established and defined. They must be based on technology as an element that facilitates them, especially in the aspects of automation, traceability, integration, scalability, agility and repetition.
Technology: It is essential that companies have reliable, secure, scalable and flexible technologies, in addition to having a variable cost depending on the work to be done.

Crystian García of MPS affirms “last year’s pandemic caused a drastic effect of change in all aspects of the world. The companies that had a plan had to implement it and those that did not have to do one quickly. On the other hand, a short time ago the companies established new plans for the future to avoid similar situations and, finally, to be able to take advantage of all the advantages of digital transformation ”.

In the same way, the General Director of Cisco Spain, Andreu Vilamitjana believes that the situation of last year has contributed directly to the growth of digital transformation and mentions that “although about 35% already had a strategy in place, 3/4 of companies have advanced the execution of their digital plans. 81% of IT managers say that Covid-19 has created the most technological pressure they have ever experienced. However, 87% see it as an opportunity, creating an urgent need to accelerate digital transformation programs. «

In the same way, public administrations have time in the process of digital transformation, although on a much smaller scale than other organizations, since they generate a quantity of paperwork and procedures that the current structure of the Administration cannot address.

It is important that administrations adapt technologies such as AI, because they can revolutionize the entire sector, where the most complex tasks can be carried out by people and, in the case of less important tasks, they are part of the technological processes.

The transformation of the sector must be global. Furthermore, only 33% of public administrations have implemented some type of IT solution.

José Manuel Barrutiauizás says “it is one of the sectors that has arrived later in the digital transformation but is now moving through it faster. The potential for improving traceability and citizen service are outstanding, and there are numerous ongoing projects related to health, advanced analytics, digital administration and Smart cities ”.

An effective digitization plan brings economic and social changes. Therefore, the Digital Society is one of the European bets for the development and recovery of the European Digital Single Market.

This leads to a simple trade, without limits, with balanced and functional rules, which are capable of expanding the growth of companies and, above all, of SMEs.

In order for this bet to become a reality, it is necessary to increase investment in R + D + i, in education and to generate modernized Public Administrations. There are tools that help advance digitization, which, without them, the process would be very complex.

Some of the main facilitators are: Broadband networks, as the key to the existence of the Digital Society. Cloud Computing, but the public sector has to get involved to strengthen the cloud model.

In the case of the IoT, this represents a new field for business based on digital services related to the products of; Big Data, which dictates a new business model, which application developers are indispensable. There are also robots and drones, which will help automate production lines by reducing costs. AI and cognitive computing, representing advances in fields such as medicine for generating personalized treatments.

So… what makes an effective digitization plan? This question was answered by the spokesperson for Zucchetti Spain “the digitization of the company must come from the General Management, although it must involve all departments. They must exercise proactive and decisive leadership in defining the objectives of the digital transformation.

»It is necessary to manage change, facilitate internal communication with employees, redefine workflows to reduce tasks that can be automated and eliminate duplication in processes. All this must be done before and during the implementation process of the new ERP-CRM software ”.

It should be noted that the digital transformation has to include the general management of any company. One person who is quite critical on the subject is Cristina Ricaurte from SAP, who mentions that the main thing to include would be an objective, having knowledge of what the company is pursuing with the project and how it would improve the business and says:

“Once this objective has been defined, it is important to look for technology partners that can supply the tools. Another aspect that more and more companies are taking into account is specialization. Each industry has specific needs and for this reason, they prefer to work with software and technology that cover their vertical processes and that allow them to implement comprehensive value chains. Everything should be based on the cloud to simplify the technological infrastructure of companies, ensure the possibilities of expansion or reduction of scope and have the latest technology «.

From the process point of view, the digitization plan has to be focused on the critical steps, being mentioned by Óscar Bernacer, “the digitization plan must incorporate an integrated AI plan that can be incorporated into key business processes, in specifically those that are repetitive and that adapt to certain algorithms. The plan must also establish the bases for deciding on the «Buy vs Build» strategy, where it is determined whether standard SW packages with their corresponding parameterizations can be used or the custom construction of solutions using modern development frameworks, including those that they are «Low-Code».

Therefore, already knowing the main facilitators, the digital inhibitors should be analyzed, being all those that hinder the advancement of the digitization process. These are:

Lack of knowledge of current technologies and their capabilities; resistance to change; uncertain costs for such technologies, especially in the Cloud field; errors in digital processes that can affect the entire company; security against all problems; «vendor lock-in» risks due to the implementation of certain technologies and solutions; regulations in regulated sectors that slow down the adoption of technologies.

The main challenge of digitization accelerated by the coronavirus according to the CIOs consulted by Cisco, is security and privacy (73%), after the complexity of IT (67%) and multi-cloud environments (61%).

Andreu Vilamitjana points out that «IT providers must offer new digital platforms that allow organizations to connect, secure and automate their environments at a faster pace than ever, and with less complexity.» Among the companies that already opt for these digital platforms is the company, which invests 6,500 million dollars annually in R&D that is added to the investment of the Country Digital Acceleration program in countries around the world including Spain, where it is called ‘Digitize’. To which its spokesperson adds, «the transition to ‘as a service’ offers is also key to providing organizations with choice and simplicity of adoption.»

However, Julio Saíz de Alhambra says that the main limitation that a company has to overcome is not innovations or platforms, but rather a personal matter “the first barrier is the mental one. Both managers and employees should be aware that when faced with such a modernization, daily tasks can change almost completely. So once they are open to change, the process can begin ”.

Now, Justino Martínez de Zucchetti comments that “many times the main drawback is the false belief that digital transformation consists only of adopting new tools. Resistance to change and the lack of internal leadership can be two aspects that, even adopting new software solutions, can lead the company not to take full advantage of its advantages and achieve the expected results ”.

Many of the organizations do not have the trained team to initiate digital transformation projects. Digital barriers are usually related to the culture of the organization, but José Manuel de Ibermática / Digital says:

“In many cases, we could say that the business is not mentally prepared for it, and by extension, this attitude carries over to the rest of the organization. And in most cases, organizations do not have the appropriate skills and talent to initiate digital transformation projects, which are usually complex as they involve different technologies and practices. That is why it is essential to have value providers who understand the needs of the organization, are flexible and accompany companies in the gradual deployment of digital transformation initiatives ”.

In the field of the CIO and the ICT department, many have thought that the ICT department is responsible for everything related to new technologies and digital processes. It does have to be a leader in the transition, however, it does not imply that the other departments do not collaborate for the process.

The departments that are responsible for the company’s processes must be related to the phases of the process, specifically the Finance and Marketing and Sales departments. In addition, Óscar Bernacer from Oracle adds “it is important to highlight that the digital transformation plan must include: Involving the heads of each department following an“ Agile ”methodology; Significant business monitoring and control KPIs for the different departments; Regular control and review mechanisms periodically from time to time; Agility in process testing in A / B testing mode to rule out or reinforce certain aspects.

«All of the above should make it possible to make visible the evolution and achievements associated with the digital transition, which, together with an adequate level of control, ensure compliance with the strategic objectives.»

Cristina Ricaurte, the Director of Solutions and Innovation, SAP Spain adds, «digital transformation goes beyond the digitization of the business, processes, model … it is the journey we undertake to rethink and reinvent areas, departments, processes, with the aim of be more efficient, more sustainable, but also to respond to customer and employee expectations ”.

He also comments “the true value of a digital transformation is when we see that technology helps us obtain: new sources of income because we are able to monetize innovation, we discover new ways of doing things and that allows us to attract more customers, we clear people from manual jobs to dedicate themselves to more strategic tasks ”.

The CIO is in charge of aligning the advantages offered by the technologies and aligning a plan to modernize models, resources and equipment, adding that it takes advantage of the opportunities that currently exist, becoming a fundamental element for the digitization process.

According to Cristina Ricaurte, Director of Solutions and Innovation, SAP Spain “The CIO guarantees that the transformation is a business and not by silos. He is the one who must direct the process by which the company will achieve the business objective set out with its digital transformation. You will have to “sell” the profits and the return to the business internally; coordinate the departments involved within the organization; and act as a link between suppliers and implementation partners and the company itself ”.

On the other hand, costs are one of the biggest enemies for the advancement of digital transformation, therefore, companies do not feel capable of implementing digitization, either because they do not know the costs or because they lack profitability.

“When using cloud technologies, it is important that the costs of such solutions can be reliably determined and predicted under changing conditions. In this sense, it is necessary to determine clearly and in advance the SLAs agreements in all areas and on a contractual basis. It is useless for a Cloud solution to be economical if the service level is bad or suffers continuous drops, ”said Óscar Bernacer, Director of Cloud Presales, Oracle.

Likewise, José Manuel Barrutia comments “we are used to evaluating the investment returns of IT projects based on a series of parameters and, however, in the case of digital transformation they must incorporate others of greater impact”, to which he adds that «A correct combination of open-mindedness and strategic vision, together with an execution based on Agile, will allow us to advance in the digital transformation in a sustained and efficient way.»

However, Julio Saíz, BDM Infrastructure and Cloud Services of Alhambra IT asks a question for reflection «is a company that is not digital and does not pretend to be profitable ever?» and, «from then on we can talk about costs and investments, but with total security the transformation is profitable in the medium-long term.»

Andreu Vilamitjana, in the same way, comments that costs are not the problem, but cash flow or lack of liquidity «the Business Resistance financing program offered through Cisco Capital and endowed with 2,500 million dollars, allows access to technology deferring 95% of the cost until January 2021. It is available in multiple countries, including Spain. In addition, organizations can also opt for ‘as a service’ offers and managed cloud services so that cost is not a barrier ”.

In Spain a project called «Digital Spain 2025» has been created, which is a set of measures that contribute to digital connectivity for the entire population, which implies the deployment of 5G, reinforcement of cybersecurity, digital skills of Spanish employees and the move to a data economy based on AI.

A public investment of 20,000 million euros has been estimated from 2020 to 2022, being promoted by the community financing instruments of the Next Generation Recovery Plan. With respect to the private sector, this will contribute 50,000 million euros.

It is estimated that Spanish investment in telecommunications and digitization will increase to 4,230 million euros. As Andreu Vilamitjana explains, the union of the public and private sectors is powerful “to scale quickly from that 26th position in digitization, Spain must focus its efforts on four key pillars that we at Cisco have defined in our Digitaliza program: Industry 4.0; Smart Territories; Critical Infrastructures; Training, Digital Jobs and Innovation. The 2025 Plan is a unique opportunity to boost investments in these areas with direct and indirect aid and through public-private collaboration, which is key to obtaining the best results ”.

“Although everyone can be more or less in general agreement, what is really significant for achieving objectives in the coming years will be the way in which all this is translated into effective economic policies and investments that help companies. It will also have an important influence on how the pandemic evolves in 2021 and the degree of progress of the economic recovery, ”explained Justino Martínez.

In the Digital Spain Plan 2025 you can find 10 strategic axes, which are:

Models to promote digital connectivity
Large-scale deployment of 5G for everyone
Promotion of digital projects in agri-food areas, mobility, health, tourism, commerce and energy
Reinforcement in cybersecurity
Strengthening of digital capabilities and empowerment of talent
Potentialization of the digitization of Public Administration
Promotion of the digitization of micro-SMEs and startups
Boost of visual production hubs
Ethical and normative framework of the digital rights of the citizen
Development of the data economy and AI

José Alfonso Gil, country manager Vertiv Spain and Portugal makes a conclusion “the digital transformation strategy must be driven from the top management of the company. And within that top management, the key position in this process is that of the CIO. Therefore, we can affirm that the CIO should be the main internal “sponsor” of the initiative ”.

The astonishment of Julio Saíz from Alhambra IT is immense, due to the good digitization that the companies have carried out, although it is considered slow “many companies have managed to continue with their activity despite the relocation of their employees and this is impossible without having processes digital. For this reason, the support of local, state and international organizations is important, especially in the case of SMEs, the fundamental basis of the economy of Spain ”.