Digital Enterprise Journal recently completed a comprehensive study about the key trends around digital transformation. More than 500 organizations worldwide participated in the study and some of the key findings include:
1 – Role of technology in gaining advantage. Sixty-one percent of organizations reported that the importance of technology in gaining competitive advantage has increased over the last 12 months. Organizations are also listing technology becoming the core of business strategies as one of their key goals for digital transformation. This indicates a revolutionary shift in how organizations are thinking about the role of business technologies in their organization and these organizations are moving technology management from being a supporting role to the forefront of their go-to-market strategies.
2 – Visibility into customers’ buying decisions. Forty-six percent of organizations reported that their need for processing and analyzing customer data in real-times has increased over the last 12 months, while 58% reported that they need to have more visibility into the customers’ buying decisions to stay competitive. Organizations are seeing quality, depth and usability of customer data as a major asset and looking to deploy capabilities that would allow them to leverage this data to create new revenue streams, provide more personalized services and improve customer engagement.
3 – Creating new revenue streams is the #1 opportunity. Forty-eight percent of organizations reported that generating a new revenue stream is the top driver for going through digital transformation. These organizations see digital transformation as a major opportunity to redesign their portfolio, find new ways to monetize data and other assets and enter or create new markets.
4 – Need for new skills and job roles. Fifty-two percent of organizations reported that it has become more difficult to find top talent over the last 12 months. Additionally, the top two people-related actions that organizations are taking are: 1) improving technology skills of non-IT employees; 2) introducing new job roles. Organizations are increasingly understanding that even though technology is a very important part of digital transformation, its effectiveness largely depends on how it is being used, skill sets of employees that are leveraging it and organizational alignment with key business processes.
5 – Agility is one of the key goals. Forty-seven percent of organizations are reporting that improving agility is one of their key goals for digital transformation. Organizations are realizing that in order to become a successful digital business, they need to take an agile approach throughout their entire organization – from product and software development to processing and analyzing business critical data.
6 – New approach for technology purchases. Fifty-eight percent of organizations reported that in order to become a digital business their process for evaluating technologies will have to change and become more business centric. Additionally, 39% of organizations are reporting that they are changing their process for budgeting technology purchases, as they are increasingly using the RGT (Run, Grow, Transform) method to allocate their resources to technology deployments. This shows that organizations are increasingly looking at enterprise technologies as a key driver for their growth and competitive differentiation.
7 – Digital transformation is not an easy process (and that’s an understatement). Only 36% of organizations are reporting that they reached at least 30% of their milestones for becoming a digital enterprise. Additionally, the research shows that there is no clear definition of digital transformation, as organizations reported a broad variety of descriptions for this term. However, top performing organizations are showing a higher maturity level when it comes to clearly defining goals, strategies and metrics for digital transformation, which in turn translates into an improved business performance. For example, the research shows that top performers in digital transformation are 3 times more likely to experience growth from new revenue streams as compared to the rest of their peers.
8 – Culture and integration and collaboration are the two slowest areas to transform. Only 13% and 17% of organizations reported that they are achieving their goals for change of culture and integration and collaboration respectively. This shows that successful digital transformation requires a new brand of leadership as well as a fundamental change in how organizations are doing business.
9 – Lack of in-house expertise. Fifty-three percent of organizations reported that lack of in-house expertise is one of the key challenges for digital transformation. Digital transformation is a complex processes that touches every business area and has many moving parts. Therefore, organizations are reaching out for outside expertise, especially in areas of strategy creation, changing organizational culture and selecting the right mix of technology capabilities.
10 – Becoming a digital business pays off. Top performing organizations in digital transformation are reporting significant improvements in some of the key business metrics. The study shows that organizations that are more successful in reaching their digital transformation milestones are much more likely to experience growth through new revenue streams, boost customer satisfaction and engagement and improve operational efficiency.
