Technical Due Diligence might be the answer
According to Prophet, more than half (54%) of the digital transformation efforts focus on modernizing customer touchpoints, and almost half (45%) drive infrastructure enablement. However, nearly 41% of businesses do not perform proper due diligence to understand their capabilities, market requirements, business processes, competitors, data, technical debts, and investments in the digital transformation strategy.
Reason #1: Lack of comprehensive understanding of the market situation, competitors’ strategies, flaws/limitations of your product/service, and anticipation of unpredicted problems in the future
Effects:
- Risky technical or operational decisions may lead to significant losses in financial deals due to unknown strengths and weaknesses of your business landscape.
- Hindrance in effective planning for organizational transformation is caused by insufficient knowledge of the market, competitors, and product/service shortcomings.
- The digital transformation process might halt if unforeseen problems arise without proper anticipation and preparation.
Prevention: Technical due diligence plays a crucial role in risk reduction and increasing the likelihood of profits and success. It achieves this by offering a comprehensive competitor analysis and in-depth market research within the relevant industry. You gain valuable insights into your business’s strengths and weaknesses, enabling you to make well-informed decisions. This process aids in outlining clear business goals and effectively prioritizing transformation objectives by conducting a detailed review of current challenges and predicting potential issues. Anticipating and addressing these challenges proactively ensures a smoother digital transformation process and mitigates the impact of any unexpected problems that may arise during the execution.
Reason #2: Inadequate business or technical documentation of your products or services
Effects:
- Having inadequate knowledge can be perilous, similar to embarking on transformation goals without understanding your business’s current status and growth trajectory.
- Lack of documentation, technical and business processes can lead to a lack of trust, ownership issues, and conflicts of opinion and vision.
- Moreover, this knowledge gap creates obstacles in transferring knowledge effectively, especially during staff or stakeholder changes, which can further impede the success of the transformation.
Prevention: There should be a comprehensive examination and evaluation of your business and operational model during the technical due diligence process with simultaneous documentation. This crucial step involves assessing your business landscape, financial, revenue model, and application ecosystem. The workshops conducted during the technical due diligence are documented, as it helps to bridge knowledge gaps in the business process, operational needs, or technical shortcomings. This knowledge base acts as a critical component for understanding and addressing challenges or opportunities in digital transformation definition.
Reason #3: Blindly adopting flashy technical trends
Effects:
- Succumbing to the allure of numerous technical trends and a mindset focused on innovation might lead you to impulsively adopt these trends without fully understanding their benefits and drawbacks.
- Neglecting to address existing technical debt and other liabilities can create operational bottlenecks, leaving insufficient time to properly implement digital transformation solutions.
Prevention: With technical due diligence, you get a clear idea of which upcoming technologies that best suit your business needs and are aligned with your long-term business goals. Any due technical liabilities can be recognized and dealt with before transformation to make the process smooth and give you ample time to gradually ride the transformation journey.
Reason #4: Insufficient knowledge of your present architecture and what architecture works for your industry
Effects:
- An unclear understanding of the complexity of your current technical architecture may result in over-budgeting or under-budgeting your transformation roadmap.
- Without this understanding, assessing the specific architectural needs necessary to align with your chosen digital transformation model becomes challenging.
- The lack of insight may lead to suboptimal design decisions and architectural planning.
Prevention: By conducting technical due diligence, you equip yourself with the knowledge to make informed decisions about your product or service’s architecture. Focus on current architectural limitations, risk identification, and efficiency optimization during technical due diligence. We empower you to choose or adapt a technical/solution architecture that best suits your business needs, maximizes efficiency, and supports the growth and success of your product or service in the long run.
Reason #5: Lack of a defined data strategy limits your ability to harness the full potential of its data assets
Effects: Failing to establish an appropriate data strategy can lead to various issues, such as poor data quality, inefficient data management practices, and inaccurate or incomplete data, which can result in missed opportunities for the business.
- If data is not aligned with your overall business goals making critical business decisions becomes difficult
- Data integration from disparate data silos may pose a challenge during the transformation process
Prevention – A comprehensive assessment of various data types is crucial in determining the suitable databases, data integration, and overall data strategy for your business transformation. It allows you to align your processes based on your business goals, integrating data in a planned manner. A well-planned data strategy further helps you optimize costs by determining the lifespan of each data set, ensuring efficient resource allocation. Understanding the different types of data also aids in implementing appropriate security measures and complying with data protection regulations. Ultimately, a well-defined assessment of data types empowers you to make data-driven decisions and effectively design scalable, performant database systems that cater to your business needs.
Conclusion
Digital transformations hold immense potential to revolutionize businesses but are not without their challenges. However, a promising solution can significantly increase the chances of success: Technical Due Diligence. By thoroughly evaluating existing technical architecture, data strategies, and potential challenges, businesses can gain valuable insights that will enable them to make informed decisions and devise effective transformation strategies. Technical Due Diligence provides clarity, uncovers hidden obstacles, and paves the way for a more targeted and successful digital transformation journey.
Now is the time to act and prioritize Technical Due Diligence in your digital transformation initiatives. To learn more about how Cygnet Digital helps customers by performing technical due diligence, enabling them to make informed decisions about their digital transformation goals. Let Technical Due Diligence be the cornerstone of your successful digital transformation journey!
Abhijit Sen
VP & Head of Architecture and Innovation
Abhijit Sen is a business and technology architect with a proven ability to develop and implement Information Technology strategies to drive business operations. 14 years of experience in Fintech across technology and strategic change management with significant analysis, design, and architecture contributions to the delivery of regulatory, control, and large-scale changes.
