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June 23, 2022

Digital transformation faces supply chain challenges

The ongoing digital transformation of business has been the subject of many discussions and countless articles and opinions. But the commonality is technology as the basis for digital transformation. If the ultimate goal of digital transformation is to give customers easier contact, better service, and more information, employees and business processes need changes and upgrades as well. IT needs to change too, to provide the technology that enables digital transformation.

But in 2022, companies are hitting a fairly big snag in their IT upgrade plans and ultimately their digital transformation plans. It’s not discussions on work from home, or the ongoing fight to find and keep quality employees, it’s the lack of availability of the hardware underlying all of it. Supply chain issues are creating havoc in carefully laid out IT upgrade and replacement plans.

The big press in supply chain issues is usually around the large, recognizable components like switching chips, or Wi-Fi controllers for APs, x86 or ARM processors, RAM and things like that, mostly centered around the manufacturing capacity of the biggest silicon foundries. However, for every big component, there are hundreds of small components, and sub-assemblies like power supplies. These other components have become supply constrained as well, leaving vendors to scramble.

Lockdowns in China have contributed to the component backlog, as well as the current war in Ukraine, which has affected not only raw materials, but also certain shipping and air routes. Right now, despite reassurances by vendors, ongoing delivery delays are going to be the order of the day for likely the 18 months. The availability of finished IT hardware will be choppy, with some products becoming available then just as quickly moving back to delayed. The backlog is considerable and there is no good way to predict which IT hardware will be available on a general basis.  So, what are companies who are eager to move forward on their digital transformation plans to do?

Strategies for digital transformation

There are a number of strategies available that can help companies cope with the disruption to their plans. A combination of practical changes and psychological adaptions are key to still attaining digital transformation goals even if on a longer than desired timeline.

  • Worry about what you can control. The supply chain isn’t one of those things – relax
  • Use the extra time to do more detailed planning
  • Manage up – keep upper management appraised of the supply chain situation and aware that additional pressure on IT or the vendor will not be effective
  • Consider your secondary vendors – this is exactly why you have secondary vendors, consult them on availability of their products
  • Consider temporary work-arounds until the supply chain issue eases

The Covid-19 pandemic, extreme weather, and geopolitical instability have all proven that just-in-time manufacturing is brittle when it comes to disruption anywhere in the process. Planning for IT and the business should reflect that there is no “going back” to the way things were from a supply chain perspective. Built in contingencies and the expectation that there will be some kind of disruption should be the norm. Keep in touch with your suppliers and work on what you can control.