Digital Transformation Is People and Culture

According to a new study from Forbes, Digital Transformation (DX) is as much about the transformation of how individuals work, and the cultures of organizations, as it is about technology. Simeon Preston, chief operations officer of AIA Digital, says transformation uses technology as a means, not an end. “… we don’t think of it as just a digital transformation… we’re driving an end-to-end business transformation…”

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And Peter Russo, vice president of product marketing at SAP, speaking about large, long-time industry leaders needing to be innovative as well, says “… they have no choice… move forward full throttle with digital transformation, or… risk that the next hot startup would displace them, no matter… (the) industry they are in.”

One-on-one conversations with top executives reveal that a transition toward digital maturity involves five major steps, says the Forbes report, some of which will be easier to take than others.

1. Make transformation a top strategic priority. Digital transformation is the top strategic priority for 50% of the respondents, confirms the Forbes Insights and Hitachi survey. Investing in new technologies to enable digitization is the top investment priority over the next two years (51%), along with increasing data and analytics capabilities (51%).

2. Business outcomes need to drive digital transformation. New business models are the top driver of DX , says 41% of the respondents, followed by new technologies (40%). The ability to innovate is the top measure by which the success of DX is measured, say 46% of the respondents, along with revenue growth (46%), followed by cost reduction (43%), says the report.

3. The potential of data and analytics is not fully utilized yet. 44% of companies see themselves as advanced or leaders in data and analytics, and 91% have already seen revenue increases due to the use of data and analytics. Yet, only a third of companies consider themselves leaders in customer experience based on their digital transformation.

4. An enterprise-wide approach to DX needs to be adopted, says the report. Currently, cross-functional teams are not involved enough in developing or implementing strategy, with the bulk of this work done by IT (50% and 54% respectively). IT is the function considered the most prepared for digital transformation, while other functions lag, with just over a third of survey respondents deeming them ready.

5. Companies need to learn how best to marry technology with human resources. Technology is seen as the biggest challenge (29%) and the top contributor to a successful digital transformation (56%). People (talent and capabilities) are not seen as equally significant contributors to the success of DX.

45% of companies believe they have moved beyond the intermediate level in terms of their digital transformation and consider themselves either advanced or leaders, says the report. The 55% that remain are either just beginning their digital transformations or have some technologies in place, but not on an enterprise-wide level.

  • 10% Ad hoc: Inadequate technologies and limited use of digital
  • 14% Beginning: Started to implement technologies (for example, cloud and mobile) and strategize about the role of digital transformation for our business
  • 31% Intermediate: Created an adequate technology infrastructure and basic strategy for digital transformation and some digital solutions
  • 32% Advanced: Created technology infrastructure and enterprise-wide strategy for digital transformation and digital technologies
  • 13% Leaders: Enterprise-wide integration of digital technologies and digital technologies that lead to substantial improvements

To read more of the Forbes report, please visit here.

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