How can marketers overcome barriers to digital transformation in 2023?

The demand for more personalized relationships, experiences and products can impact multiple parts of a business, including manufacturing, servicing, sales and marketing. The need to meet these demands is a key driver for many of the digital transformation projects we’ve seen and heard about in the past few years.

And yet, although most businesses recognize the importance of delivering a strong CX and personalization of products or services, many are facing barriers to achieving their ambitions.

Research conducted by iCrossing in Q3 of 2022 explored the attitudes and intentions of more than 1,000 marketing decision-makers toward digital transformation projects in 2023. It found that a large proportion considers improving and investing in CX and personalization as their main priority for the coming year; and that they recognize the importance of investing in digital transformation as a key driver to achieving this business success.

Personalization

Respondents recognized the importance of access to customer data in delivering personalization, with 40% looking to unlock the power of data as a priority next year. Perhaps unsurprisingly, many respondents also stated that a customer data platform (CDP) will be an important technology investment for 2023.

But while marketing decision-makers clearly recognize the importance of building and retaining strong customer relationships (all the more important as we head into a challenging financial period for consumers), they highlighted a number of challenges in gaining support internally to do this.

The human component

When it comes to achieving success with digital transformation (DT) projects, marketing decision-makers face barriers within their organizations. Challenges include internal silos, cultural resistance and company politics.

Securing digital talent remains a significant threat. Almost a third (31%) of respondents stated that they have a knowledge gap in their CX, and while hiring the right people is essential to achieving success, nearly half named recruitment and retention of digital talent as a threat to their digital capability.

Perhaps the most worrying statistic is that almost a quarter (24%) of those surveyed stated that while their CEOs buy into DT, they don't necessarily understand the benefits and are unwilling to assign dedicated budgets to it.

Among consultancies, there is an understanding that between 70-80% of DT projects fail, and that this has nothing to do with technology, but rather results from human failings. Organizations often struggle to bring the whole company along with them and they encounter a natural resistance to change from their workforce.

Some also make the mistake of putting IT people in charge of the project, who often speak a technical language that few understand. DT projects require outstanding leadership and people who can explain and demonstrate the benefits to the organization in holistic terms for successful delivery.

Measures of success

Marketing decision-makers also seem clear on the key drivers for investing in digital transformation projects and expect high returns from any investment. More than half (57%) of respondents from large companies cited increased revenue, and 50% quoted a profit uplift of 15% or more, as successful outcomes. Nearly half (45%) also cited reducing operating costs as an additional driver.

However, almost a fifth felt they were unable to measure the effectiveness of their digital transformation. That will severely hamper progress. It’s never been more crucial to be able to measure the success of any investments in order to have any hope of success. Key to this is understanding data effectively; knowing what to measure and where; and using appropriate CDP technology.

With such a high percentage of businesses seeing DT and CX as a priority, the fact that many CEOs don't understand the benefit or have the willingness to invest is shocking, and reduces the chances of success even further. When set against a backdrop of skills gaps, lack of investment, and very high (even unrealistic) expectations, it’s a lot to ask.

Outstanding leadership — people who can demonstrate and speak about the benefits to the business and make a compelling case for sustained investment — will be essential for marketers to deliver successful digital transformation in 2023.