Digital transformation budgets, hampered innovation, and incident management challenge the enterprise

4 out of 5 tech pros say impeded innovation impacts customers, and processes and tools are insufficient for uptime, according to a new report from xMatters.



Digital transformation has been on the fast track, as the COVID-19 pandemic drove organizations to quickly send staff to work from home (WFH). IT skills were and are highly sought, and the demand to help the enterprise make a smooth and safe transition rendered IT staff invaluable.

xMatters’ “State of Automation in Incident Management” report found many enterprises deemed the pace of development as unsustainable, especially if it hopes to capture and keep new online customers, as mounting evidence of lower quality were revealed in process, quality, and innovation. 

Budget matters

The xMatters’ report revealed increasing enterprise budgets for digital-transformation initiatives; issues that impact customers, including the organization’s ability to build-out new services and product features, while ensuring a successful delivery of reliable digital services and the growing need for transformation in incident-management (IM) approaches.

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The acceleration of digital transformation, due to the abrupt (and apparently long-lasting) transition to WFH greatly affected budgets for the enterprise. “Enterprise budgets needed to increase to be able to support this new wave,” said Troy McAlpin, CEO of xMatters. “Spending on digital transformation is expected to reach $2.3 trillion in 2023, accounting for the majority of IT spending (53%) for the first time. A company’s digital transformation initiative needs to run smoothly and efficiently.”

McAlpin expressed surprise “to learn that even in the face of the pandemic and economic downturn, there’s continued growth in digital-transformation budgets. However, fast-tracked digital transformation initiatives threaten the customer experience. Report findings showed 20% of companies with 1,001-5,000 employees are budgeting more than $10 million on digital-transformation initiatives, compared with 9.3% in November 2019.”

Customer experiences

xMatters’ research found “technology professionals affected by customer-impacting issues when building out services increased by almost 10% to 84.3%, compared to its November 2019 “Incident Management in the Age of Customer-Centricity” research. Overall, it found, there is a marked need for improvement in customer experiences and an organizational commitment to innovation across industries.

An enterprise goal should define digital-service resilience (the ability to recover quickly, adapt, and learn from missteps, as well as learn to troubleshoot inevitable outages and interruptions). 

The Incident Management Spectrum

Given that IM readiness or preparedness within the enterprise occurs in varying degrees, an organization, the report recommended, must identify its position in the “Incident Management Spectrum”  (IMS). The report’s research discovered that across the IMS, it is only “the most advanced organizations have isolated keys to success across business and incident-management functions.”

The four categories within the IMS include: 

  1. ad hoc, where there is no formal incident management practice
  2. traditional incident management, an approach driven by service desk tickets and mostly manual processes
  3. modern incident management, where individual teams detect and resolve service-based issues and
  4. adaptive incident management, where a scalable and service-centric model harnesses as much automation as possible. 

Resolving issues

The results of the research found that almost all respondents employ either a traditional (40.1%) or modern (58.6%) approach to incident management. 

McAlpin warned: “While accelerated development is required to capture and keep the demand for online digital services and customer experiences, it’s counterproductive. We talked to teams about their practices within IM, and found that 72.3% reported that at least half of their team’s time is spent resolving incidents compared to time spent on innovation.”  Of the 72.3% majority, 27.3% said at least 80% of their IT team’s time is spent resolving incidents.

Customer-impacting issues include “service degradations, outages and application performance problems are common,” McAlpin explained. “Think of incident management as a safety net to keep digital businesses up and running.” Customers, he said, rely on fast tech and apps that are fast, reliable, and safe. Shoppers have little patience for slow websites or apps and 52% of consumers said they’d stop using a slow mobile app or website.

Those who responded to xMatters were surprised to see different organizations’ positions on the IMS, developed to assess the efficacy of IM in the enterprise. Respondents’ answers were “analyzed and scored to determine an organization’s position in the IMS based on approaches to IM,” McAlpin said. “While we were expecting a majority to fall in the ad-hoc category, almost all respondents employed either a traditional (40.1%) or modern (58.6%) approach to their IM practices. It was interesting to see that traditional teams spend a lot of time firefighting versus innovation, while modern teams, who have allocated more budget toward digital transformation, spend the same amount of time resolving incidents and building out features as their traditional counterparts.”

Tech success

The report narrowed keys to successful customer experiences:  Automation, collaboration and constant learning. But there’s room for improvement. Nearly half (43.4%) of tech pro respondents “deploy less sophisticated processes such as email blasts, conference bridges, or manual setup and outreach to engage team members, stakeholders, and customers during an incident.”

The top benefits of using artificial intelligence or machine learning for IM, according to the report, were identified informing post-incident reporting with data from previous, related incidents (36%) and aggregation of data to detect anomalies early (29%).

More than 300 DevOps, SRE, ITOps and business leaders from companies of varying sizes (including those which deliver digital services with more than 5,000 employees) were respondents.

“Today’s world is a technology-focused one, where the speed and quality of the digital customer experience determines business success.” McAlpin said. “Before COVID-19, companies pursued digital transformation at varying velocities according to market demands, resources, and strategy. The transformation of digital services has been accelerated. This required, unsustainable pace of development impacted customers.” 

Instead of dealing with incidents and app performance issues, “tech organizations need to build new services.” A majority interviewed “reported customer-impacting issues affect that ability. To stay relevant, digital service creators need to evolve their current approach to incident management.”

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