The 2014 State of Digital Transformation [Infographic]

Digital Transformation is the next big thing. And, the next big thing is big. Whatever role you’re in today, whether it’s the C-suite, marketing, sales, customer service, HR, PR, finance, legal, product, design, et al., you are shaping or affected by digital and the need to invest in digital transformation.

The state of digital transformation is complex but it is something we are all learning to understand, embrace and lead. Our latest research on the subject is now available as a wonderful infographic that is easy to digest and was also designed to be dissected for reuse in presentations, online discussions and good ol' fashioned prints. You can download “The 2014 State of Digital Transformation” infographic here.

What is Digital Transformation?

Digital transformation is a formal investment in new technology, business models, and supporting systems and processes to change the way companies sell, market, operate and scale in an increasingly digital economy.

Digital transformation is part technology but also, in large part, human. Technology is affecting how we connect, collaborate, and share. Technology is also affecting how we, as people, work, learn and buy. Indeed, companies are changing because of technology. They’re also changing by investing in technology. I’ve learned that those companies that are excelling at parts of digital transformation are also looking at the human side of change, inside and outside the organization. As such, digital transformation is indeed enterprise wide. At the same time, it is an effort that can also be localized to expedite experimentation and a rapid test-and-learn method to acceleration.

Between 2013 and 2014, I led two dedicated research initiatives at Altimeter Group to study how the best companies were pursuing digital transformation and also how the industry fared in comparison. Since digital transformation is all encompassing, we focused our work on how companies were changing to compete for traditional and digital customers.

The hypothesis was that decision-making, touch points, influences, et al., were notably different than that of traditional customers. As such, this evolving behavior would force a shift of marketing, sales, product and technology investments and resources to compete in new ways and places. As a result, our work looked specifically at digital transformation through a customer-centric lens. We defined our focus for both research efforts this way…

The realignment of, or new investment in, technology and business models to more effectively engage digital customers at every touchpoint in the customer experience lifecycle.

The first report, “Digital Transformation: Why and how companies are investing in new business models to lead digital customer experiences,” featured companies that are well-documented to be ahead of the pack in terms of innovation and market leadership. My colleague Jaimy Szymanski and I personally interviewed over 20 companies including Starbucks, Intuit, Ford, GM, Discover, Nestlé, Sephora, Hard Rock, Harvard, among others.

Our second report, “The 2014 State of Digital Transformation: How companies are investing in the digital customer experience,” was based on a survey of executives and digital strategists around the globe to better understand how they were or were not pursuing digital transformation.

In each case, the results were profound. The comparisons between the two were eye opening. More so, the insights shared in both are both inspiring and prescriptive.

2014 State of Digital Transformation Infographic Highlights

Altimeter’s research uncovered that investing in new digital technologies, such as social, mobile, big data, cloud, etc., doesn’t equate to uniting those efforts around a common vision supported by an updated, integrated infrastructure to effectively compete as a unified business in connected markets.

Digital transformation is nascent and largely misunderstood—it means different things to different people.

88% of executives and digital strategists stated that their company is undergoing a formal digital transformation effort in 2014. Yet, only 25% had mapped out the digital customer journey. Note: Participants were given Altimeter’s definition of digital transformation at the beginning of the survey. Additionally, I guess is that a notable number within that 25% were estimating and had not proactively studied the differences and opportunities around defining the digital customer experience.

Digital transformation doesn’t just mean increasing digital investments. It means thinking and acting “digital first.”

17% of digital leaders are now in the process of studying the digital customer journey.

42% of strategists report that while they have not yet researched the customer journey, they are investing in new digital channels.

The mandate to lead digital transformation is often driven by the CMO, CEO, and CIO (54%, 42%, and 29% respectively.)

The most important digital transformation initiatives ranked:

• Improving processes that expedite changes to digital properties, ie. website updates new mobile or social platforms, etc. (80%)
• Updating website and ecommerce programs for a mobile world (71%)
• Integrating social, mobile, web, ecommerce, service efforts and investments to deliver an integrated and frictionless customer experience (70%)
• Updating customer-facing technology systems (66%)
• Further research into customer digital touch points (63%)
• Overhaul customer service to meet the expectations of digital customers. (46%)

The top challenges facing digital transformation:

• Company culture (63%)
• Thinking beyond a campaign mentality (59%)
• Cross-functional collaboration (56%)
• Resources (56%)
• Understanding digital customer behavior (53%)
• Securing executive support (42%)

Benefits of digital transformation:

• Lift in customer engagement (75%)
• Improved customer satisfaction (63%)
• Higher digital traffic (53%)
• Increased lead gen/sales (49%)

Digital transformation represents the next stage of business development. It will improve how companies work—inside and out. But, without knowing how the customers or employees are evolving, digital transformation is just new technology operating under the guise of change.

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