Digital transformation is no longer the goal; prioritize readiness
For decades, digital transformation has been used to describe the way businesses approach the future. But is the term outdated, now that digital is the norm? Sheetal Patel of Paragon DCX explores.
Is the term ‘digital transformation’ obsolete? / Pankaj Patel
Don’t think in terms of digital transformation; instead, think about building readiness for a constantly evolving business world.
That’s the key takeaway from a new report from London Research in partnership with full-service digital transformation and marketing agency Paragon DCX. The report, ‘Digital transformation is dead [...] Why organizations need to embrace constant change to avoid failure’, argues that digital transformation as a term has become unhelpful at best, and meaningless at worst.
As one of the report’s contributors, brand strategist and lecturer in digital marketing Lazar Dzamic puts it: “Business transformation is going to be hugely digital. It’s going to be almost exclusively driven by the big technological trends, which means digital; by what is happening with major consumer trends, which are powered by digital technology; and by what we need to do within the company itself, which is going to involve a huge amount of digital technologies applied in different ways.” In other words, digital is no longer a distinct element of business; it is business.
So: the aim of business transformation now must be to create an ecosystem of corporate culture, structure and technology that allows the organization to respond quickly and simply to the changing needs of its customers.
Bi-modal change is now the norm
The report identifies another critical change that’s happening. Digitization of processes and the development of a digital strategy used to be seen as separate things, and usually happened consecutively. They’re now increasingly taking place at the same time.
This trend emerged in the comparison of how mature respondents said their business was in certain areas, and the priority it gives those areas. The biggest gaps between the two are in digitizing processes to increase efficiency (15 percentage points) and updating technology infrastructure to improve operations (10 percentage points). Meanwhile, companies are much closer to establishing their desired capabilities in respect of culture, data use and customer-centricity.
Another contributor, global transformation leader and Transmute founder Tiffany St James, sums this up: “Businesses no longer have the luxury of digitizing and then approaching transformation. Bi-modal change is the norm where business as usual is running alongside digital change programs that also have to evolve as they are being implemented”.
Support from top management is critical
The research also showed that there is no overriding issue that hinders companies’ moving to a state of business readiness, but there is a silver bullet. Sponsorship from the chief executive officer and company leadership team is critical for ongoing investment in digital initiatives.
Lack of support hinders investment in technology and skills, diminishes the organization’s appetite for risk, and compromises its willingness to drive the cultural change required to support constant digital evolution.
Two out of five respondents said lack of buy-in or investment from top management is a significant challenge. Two more major challenges – lack of skills and knowledge (46%), and legacy technology (43%) – are clearly the result of insufficient investment. And an investment is a board decision.
“These are interesting findings, most notably the lack of internal buy-in,” says Gordon Glenister, membership and influencer marketing expert, author, podcaster, keynote speaker and Evening Standard columnist, interviewed for the report. “Those companies that resist change to transform to a digital culture will simply be overtaken by their rivals and certainly by a younger audience who are digital natives. Digital change doesn’t happen overnight but it’s so important that this is led from the top, with strong leadership”.
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Risk remains a significant barrier to digital investment, despite the majority of respondents saying their senior management understands the benefits of digital transformation. Only 3% of respondents said the risk wasn’t a challenge for their business.
Less than half of respondents believe the benefits of digital transformation are ‘very much measurable’. This highlights a potential difference in understanding between senior management, which expects tangible revenue and productivity gains, and teams in the thick of digital transformation who realize the full nature and value of the payoff can be unpredictable.
There is no obvious term emerging to replace ‘digital transformation’, which remains a useful shorthand for many organizations as it captures the ongoing need for digitization and change, whatever a company’s level of digital maturity.
Whatever term is used to describe the process, the adoption of digital technology and the associated development of business thinking should always be seen as a way of achieving this goal.
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