What you should know about Digital Transformation

It is impossible for any organization in this day and age to avoid the pressure from all sides to pursue digital innovation in order to stay relevant, but digital transformation failure rates have become a major problem.

Often, when the decision is made to embark on a journey of digital transformation, it is full of misperceptions and high expectations of outcomes; these are symptoms of not knowing exactly what digital transformation could or should do for the business.

Stats from 2016 reflect that more than 80% of companies fail to achieve digital transformation. We can easily attribute this exceedingly great digital transformation failure rate to everything from system complexity and poor integration to a poor organizational structure, but there is another explanation; “unrealistic expectations”, which is one of the main reasons for digital transformation failure.

Organizations are under tremendous pressure to position themselves as thought leaders to stay relevant, but at the same time, there is no unanimously agreed roadmap to digital implementation. Before defining a digital roadmap for your organization, it will be helpful to answer the below questions and see how that align with organizational goals:

1)  What is digital transformation?

2)  Why does it matter for your organization? 

3)  How will it impact your customers and employees? 

4)  How best to lead digital transformation?

The Scope of Digital Transformation:

Digital transformation is not fundamentally just about technology. It serves people, and by people, I mean customers and employees. It is an investment in the future, in being ready for that next big disruption or to lead that disruption. At the same time, not every process needs to digitally transform at once. Waiting for too long to replace existing inefficient processes can cost businesses dearly, but it doesn’t mean it is a case of an all-or-nothing transformation right now. Exploration of greatest opportunities to enhance experiences with digital technologies should, however, be at the top of the business priority list. 

Digital Transformation and Technology Connection:

In the last few years, digital transformation has become synonymous with adopting and implementing new technologies. While considering new technologies, a discussion about specific technologies come up time and time again such as Cloud Services, Artificial Intelligence (AI), Big Data, the Internet of Things (IoT), Robotics Process Automation (RPA), and Block Chain.

While all of these technologies are valuable and has their use, they aren’t relevant to all organizations in the same capacity. Every organization has its unique operating procedures, and there is no single technology solution that will comply with every business process. 

In recent years, the technologies mentioned above received a lot of positive press. Because organizations want to position themselves as being forward thinking; many have been driven to adopt these technologies purely due to the hype without evaluating their needs. Those organizations that want to modernize and incorporate AI, big data, IoT, RPA or cloud services regardless of their suitability are not making sound decisions.

Making Digital Transformation a Success:

Clint Boulton (Senior Writer, CIO) in “12 reasons why digital transformations fail” cited Wipro digital study which states that 35% of executives have identified a lack of clear transformation strategy as one of the biggest roadblocks in their journey towards digital transformation. This brings attention to a problem with planning and execution for digital transformation. The only way to combat this is to analyze the applicability of technology on a true case-by-case basis.

Digital transformation has the potential to be, well, transformative; when done right, a digital transformation can enable your business to reap significant benefits. However, as with many technology choices, there comes a tendency to get wrapped up in the hype and not think through the hard truths of execution until the promise doesn’t live up to the expectation. Digital transformations are not something to be taken lightly and can be very costly if they don’t deliver a substantial return on investment. Organizations shouldn’t be looking to dabble in emerging technologies just because it is the hip thing to do. The wider conversation in this area would be much more productive. While there may be many companies that benefit from technologies like AI and big data there are just as many that don’t. Setting targeted goals for your organization’s future will give you the best chance of successful Digital Innovation deployment.