The Next Era of Digital Transformation
Organizations continue to struggle to deliver business outcomes from digital transformation programs. According to research firm Gartner, 89% of corporate boards say digital is embedded in all business growth strategies, but only 35% of organizations are on track to achieve digital transformation goals. And while KPMG reports that 72% of CEOs have aggressive digital investment strategies, McKinsey details a harsh reality that 70% of transformations fail. It sounds like the overused cliche defining insanity as doing the same thing repeatedly and expecting different results. So, what does the next era of digital transformation look like? Let’s explore.
Top business needs driving IT spending today
With economic headwinds rising, operational efficiency has become a heightened business imperative, with CIOs looking to streamline and secure operations, transform processes, and grow the top line. After years of prioritizing digital transformation and innovation, many CIOs report that their No. 1 goal is supporting operational efficiency.
The 2023 State of the CIO report from CIO.com showed that more CIOs today see improved operational efficiency as the top imperative. In terms of business initiatives driving their IT spending this year, the top 10 enterprise needs are:
- Increasing operational efficiency: 45%
- Increasing cybersecurity protections: 44%
- Transforming existing business processes: 38%
- Improving the customer experience: 36%
- Improving profitability: 27%
- Increasing employee productivity: 25%
- New product development: 22%
- Increasing topline revenue for the business: 20%
- Developing new digital revenue streams: 19%
- Improving/optimizing the employee experience: 19%
DTaaS (Digital Transformation as a Service) Poised to Drive Enterprise Growth
To help address the challenges of rising costs, multiple stakeholders, and complex integrations, Digital Transformation as a Service (DTaaS) has emerged as a solutions-led approach to help organizations adapt to a fluctuating business environment. It combines multiple technology solutions—from cloud computing to AI—on a single platform for continuous end-to-end transformation.
MIT Technology Review reports one of the top competitive advantages of DTaaS is its ability to grant organizations access to world-class, high-performance resources that might otherwise be out of reach and turbocharge innovation. Best practices are also critical for success. Digital transformation can lead to sweeping changes in everything from technology infrastructure to business workflows. IT and non-IT leaders should therefore join forces and foster cross-functional collaboration.
DTaaS will grow in importance as enterprises grapple with challenges, such as increasing pressure from disruptive startups and competitors to invest in digital technology and a digitally literate and distributed workforce that needs support and access to key systems and infrastructure.
5 Surefire Ways to Derail a Digital Transformation
Leading complex, interrelated digitized initiatives is challenging enough without setting back your strategy by falling prey to these common digital transformation leadership mistakes. CIO.com writes the failures stem from a series of derailments, many of which are inadvertent. Even if digital transformation leaders avoid outright failure, these five common challenges delay initiatives, create avoidable organizational stress, and often yield underwhelming business outcomes.
- Prioritize too many initiatives without a shared vision
- Neglect to set collaboration and communication principles
- Customize solutions to meet everyone’s requirements
- Underinvest in developing digital trailblazers
- Drive KPIs and data-driven decisions without a data strategy
How Midsize Companies Can Drive Digital Transformation
Resources — capital, people, time — are always an issue for the middle market. Resources are typically more constrained in midsize companies than in larger enterprises, where a dedicated department or team often strategically manages digital transformation. On the other end of the spectrum, small businesses aren’t typically in a position to even need such platforms, so the resource challenge is unique to the middle market.
Harvard Business Review notes important considerations to keep in mind to help ensure a better fit and return on investment. The five keys for planning successful change include:
- Risk Management
With the right mindset, strategic approach, and willingness to leverage outside resources as needed, middle-market companies can lean into change with eyes wide open, primed to extract most if, not all, of the benefits of digital transformation to drive greater efficiency, collaboration, and growth in an increasingly competitive world.
Start Now, Think Big, Go Fast
Building a scalable, sustainable digital transformation program requires a complex ecosystem of technologies working in concert. Transformation is not easy, but it’s also not going away.
Organizations keep spending more money on programs that generally return dismal results. But companies that embrace transformation will do business faster, better, and cheaper.
If you want to learn more about how it helps you win in the market and delivers operational excellence to the enterprise, let’s talk.