Is digital transformation stalling?

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Many businesses struggling with siloes and a lack of momentum.

Enterprises are increasingly looking to digital transformation to optimize operations, drive innovation and deliver new growth. But DX is complex, touches many aspects of the business and needs careful planning. To be successful it demands a complete change in the business mindset.

Enterprises are aware that DX is essential to their long term success, yet many projects are doomed to failure due to lack of strategic direction. IDC predicts that by 2018, 70 percent of siloed DX initiatives will fail due to insufficient collaboration, innovation, integration, sourcing or project management.  

"Desired business outcomes from DX follow innovation projects that integrate new digital technologies into stable business services and incorporate new skills, techniques, and culture into the fabric of the IT and line-of-business organizations. Initiatives that do not infuse innovation into the scale and breadth of the total enterprise have not achieved the prime directive: digital transformation,” explains Bill Keyworth, VP of research for IDC.

McKinsey estimates that of the 70 percent of companies that transforming their organizations right now, the rate of success will only be around 10 percent for those that do not have holistic programs in place. 

Digital success isn’t all centered on IT
MIT Sloan Management Review and Deloitte’s 2015 global study of digital business identified strategy as the key driver in the digital arena, outlining the ability to “digitally reimagine the business” as largely defined by a clear digital strategy supported by leadership that fosters a culture that is able to change and innovate. Two years on this still applies.

Yet many enterprises are still rushing headlong into DX without a formulated strategy. According to Forrester Research only 27 percent of businesses have a coherent digital strategy that sets out how it will create customer value turning into digital business.

In a recent study 451 Research found the figure somewhat higher. It maintains around 50 percent of enterprises now have a formal DX strategy, but that 21 percent are working in siloed projects without any overarching strategy.

Despite this, C-suite executives at organizations globally commonly identify with four key pillars of competitive differentiation to focus on in internal digital transformation programs, according to 451 Research. These include improving business agility, better managing business risk, bettering operational efficiency and enhancing internal/external customer experience. Digital is now at the epicenter of business and needs to be at the core change initiatives.

Here are 5 tips for a successful digital transformation strategy:

1.     Underscore your key business priorities and evaluate how digital technology can support them.

2.     Look at your current IT infrastructure and evaluate what is required in the future in terms of IT, staff and streamlined business processes to reach your DX goals.

3.     Take time to create a structured roadmap to execute your digital needs.

4.     Include a detailed digital technology action plan on what IT needs to be replaced, restructured and deployed.

5.     Finally it is critical that you choose the right partner to make sure your DX strategy is a success. In 451 Research’s study 92 percent of companies said they were willing to use a third-party transformation partner.

Find out more about how DX can help you support your organization’s future goals and get the agility you need to put new business models in place here