Digital Transformation Artificial Intelligence Technology

Failure to launch: 3 reasons why digital transformations didn’t work in 2017

By Eugene Yap, Director

March 2, 2018 | 5 min read

For many industries, the clamour for digital transformation has never been louder than it has been in 2017.


According to IDC, global spending on digital transformation (DX) was expected to be more than $1.2 trillion in 2017, an increase of 17.8% over 2016. What is more astounding is that this pace of growth will be sustained for the coming years, reaching $2.0 trillion in 2020. To put this number in perspective, global ad-spend is only $534 billion in 2017, with annual growth falling from 4.8% to 3.8%, according to figures from Statista.

You do not have to look too far to find the reasons behind this surge of interest in digital transformation. Whether it is AI and machine learning going mainstream, the exodus of consumers from retail stores to online ones, the whole-hearted embrace of the sharing economy by Millennials, or the unstoppable rise (and fall) of cryptocurrencies – marketers are staring at disruption everywhere they look.

Yet, many marketers are still unequipped to ride this tidal wave of change. While Martech continues to be a significant proportion of a CMO’s budget, it has fallen from 27% in 2016 to 22% in 2017, according to Gartner. This is likely driven by the inability of CMO’s to manage that budget effectively and prove the ROI on technology investments. On the positive side, some CMO’s have managed to secure separate budgets for marketing innovation. However, even that will increasingly come under pressure as market conditions tighten.

At Iris Concise, we work with some of the largest global brands on their integrated marketing problems, cutting across data, technology and strategy. In many cases, we have first-hand insight into the challenges our client partners face in driving digital transformation. While some brands see disruption as an opportunity to reinvent themselves and leap forward into the digital age, others have struggled along with half-hearted attempts at change. Here are three reasons in my view of why many brands failed to make the leap in 2017.

Lack of a long-term strategic view to technology and innovation investments

The bustling pace of change in marketing is creating a FOMO mindset among senior marketers. Not a week goes by without news about a shiny new technology that could revolutionize marketing. This pressure to constantly keep up with the Joneses has led some marketers to make hasty technology investments in the guise of driving innovation. While experimentation is an essential part of navigating disruptions, marketers must ensure that these experiments are well-planned, controlled and achieve clear learning objectives. Unfortunately, many of these 'experiments' are neither controlled tests nor well-thought out long-term investments. They sit firmly in the middle category of ‘spray and pray’ – throwing money at a poorly defined problem and hoping that something works.

Lots of data and insight that do not drive decision-making and action

In our digital first world, data and marketing have become inextricably linked. Marketers are hungry for data, lots of data. In fact, according to Gartner, marketing analytics will get the greatest share of the marketing budget in 2018 – 9.2% to be exact, more than web (8.8%) and digital ads (8.6%). It says volumes about how far data-driven marketing has come since the days of monitoring clickstreams. However, despite the increased focus on data and insight, that has not necessarily translated to decision-making and action. In other words, the marketing function has fallen into the business planning rut – lots of reporting, with very little result. At Iris Concise, we help clients to optimize three primary data cycles – the data collection cycle, the data-to-insight cycle and most importantly, the insight-to-action cycle. Good data-driven marketing organizations do the first two well, but the ability to translate insight into action, and hence profit, still eludes many marketers.

Focusing on easy, incremental value from digital rather than embracing digital as a transforming force for the business

Finally, the greatest barrier to thriving in times of disruption, is aiming to only survive the disruption. Many organizations are dipping their toes into digital, or investing in the hardware, without developing the right software to make the transformation work. These organizations are prodded to move forward by fear, not courage. They are driving using the rear-view mirror, attempting to emulate what others are doing, instead of looking deeply into transforming business models, processes, job scopes and talent strategy. Unfortunately, this will simply not work. We are in the 3rd wave of digital transformation – the first driven by the advent of the World Wide Web, the 2nd accelerated by smart mobile devices, and this new frontier driven by AI, the internet-of-things, mixed reality and blockchain. The convergence of these technologies will drive disruption on a scale that dwarf the others before it. The world is speeding up, and the slow and steady will most likely not reach the finish line this time.

In short, I believe 2018 will be a more volatile time for marketers than the year before. The call for change is never louder. The need to think about technology and innovation from a long-term, strategic perspective, has never been more compelling. 2018 will differentiate the boys from the men – those who dip, and those who make the leap. Which one will you be?

Eugene Yap is managing director of Iris Concise Singapore.

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