The Latest Stats on Digital Transformation Efforts: The Good, The Bad, The Ugly (but Getting Prettier)

I recently read a blog by Brian Solis of Altimeter, an independent research company that focuses on disruptive technology trends and found some encouraging, yet still alarming news on what their research is indicating as we wrap up the first quarter of 2019.

Here are the five key takeaways I got from Brian’s blog, as well as my personal thoughts on each of them:

Takeaway #1

A successful digital transformation is an enterprise-wide effort that is best served by a leader with broad organizational purview. For the second year in a row, CIOs are reported as most often owning or sponsoring digital transformation initiatives (28%), with CEOs increasingly playing a leadership role (23%).

I personally like and dislike the tenor of this takeaway. Though I am a proponent of completely engaged CIO’s for Digital Transformation Initiatives, the fact that over a quarter of them are the sponsors of these programs is a little concerning. Depending on an organization’s culture, the CIO role may be treated as a business-driven role or a technology-driven role. If it is the latter, then the sponsorship of these initiatives should be other CXOs because Digital transformations should be initiatives that disrupt how business is done and technology is the conduit for that disruption, not the other way around.

I am happy to see the increasing leadership role the CEO is playing in these initiatives. The more engagement and leadership from the top, the better the organizational transformation usually goes.

Takeaway #2

Market pressures are the leading drivers of digital transformation as most efforts are spurred by growth opportunities (51%) and increased competitive pressure (41%). With high-profile data breach scandals making daily headlines, new regulatory standards like GDPR are also providing an impetus for organizations to transform (38%).

These trends and statistics are in line with my informal assessments with my clients. There was a great line I recently heard from an executive recently, “When will our competition digitally transform and disrupt our business?”. Nobody wants to be the next Block Buster Video. Identifying the “New- New Thing” is vital to your organization’s continued success.

I like seeing how that little thing called “Data” is moving up the ranks of disruption. Data is the lifeblood of organizations and protecting that data and governing that data to maximize its value to your organization should be top of mind as you are building your digital transformation strategies. Organizations that operate in the United States should start preparing now for a USA version of GDPR.

Takeaway #3

While there is a growing acknowledgment of the importance of human factors in digital transformation – like employee experience and organizational culture – most transformation efforts continue to focus on modernizing customer touch-points (54%) and enabling infrastructure (45%). But many organizations are not doing their due diligence when it comes to understanding their customers, with 41% of companies making investments in digital transformation without the guidance of thorough customer research.

This one was most concerning to me as I read it. This is a good reason why you hear or see statistics that organizations are not seeing the value generated from their digital transformation efforts.

There is a possible causality here with Take-Away #1. Is the reason why the human factor is not being taken into consideration due to where the sponsorship is coming from (no disrespect to my CIO friends out there)? Are we focusing too much on the technology and too little on the people side of the transformation?

Where is the Value Management/ Benefits Realization proposition in this? Are we defining the benefits and getting our CXO’s and other Executive leaders to sign up for and be held accountable for delivering the benefits of these initiatives? If so, then those leader’s usually have more skin in the game and the people transformation is traditionally taken more seriously. This usually results in realizing the benefits from an overall value of your digital transformation initiatives.

Takeaway #4

Organizational buy-in remains a top challenge for those leading digital transformation. The companies we studied report digital transformation is still often perceived as a cost center (28%), and data to prove ROI is hard to come by (29%). Cultural issues also pose notable difficulty, with entrenched viewpoints, resistance to change (26%), and legal and compliance concerns (26%) stymieing progress.

Very consistent with my points in Take-Away 3.

These organizations need professionals who understand how to build benefit realization strategies and tying those strategies to the initiatives within your overall Digital Transformation Strategy. By tying the benefits to the potential programs within your Digital Transformation Portfolio and building robust business cases for each of these programs, your executive leadership is better prepared to make consumption choices for those initiatives that best align to the overall business strategy and provided the best value to the organization. At the same time, you have now put your foot in the door to start the “leadership commitment” exercise to get these leaders, and their subordinates to sign up and commit to delivering these benefits.

Once the commitment is made, it is a matter of building out your detailed benefits realization plans and organizational transformation plans to equip your leadership team with the tools to help them lead their organization through these transformations which will inevitably break down the entrenched viewpoints and resistance to change from the people side of the equation, while providing the statistical measurements to your organization’s return for their investment.

Takeaway # 5

Innovation is staking its claim within the organization. Nearly half of respondents report that they are building a culture of innovation, with in-house innovation teams becoming the norm.

This is great news to hear. The more organizations do this, the greater the envisioning of digital transformation initiatives for their overall digital transformation strategy and the better the adoption rates will be on the people side of the equation.

As companies are building out these in-house innovation teams, there should be a balance of agile knowledge workers and technologists. These knowledge workers need to come from the business and are usually your best performers, which means there will be a deficit to your current day-to-day operations. Organization’s need to think of this as a strategic investment to their future—driving proactive digital disruption to their marketplace and taking advantage of the fruits of their vision.

As always, I welcome your thoughts and feedback. If any of you out there are struggling with building your digital transformation strategy or benefit cases, Platinum PMO would be happy to be of help!