Digital transformation(DX) is on every company’s mind today. Many companies start out on this journey with stars in their eyes - but how many of them complete the journey achieving what they set out to?
IDC expects spending on Digital Transformation (DX) to total upto US$ 7.4 trillion between 2019-2023. The cause for concern?
“A staggering 70% of digital transformations fail - large-scale change programs don’t reach their stated goals “- McKinsey
Let’s explore why it's easy to start DX yet so difficult to complete it:
Why is it easy to start DX?
DX is easy to adopt due to the quick management buy-in that an organization can get.
Some factors why the buy-in happens are:
1. Strategic investment:
“The last ten years of IT have been about changing the way people work. The next ten years of IT will be about transforming your business.”
— Aaron Levie, BOX
Digital change is all pervading in the new normal and no organisation can escape it. It is a strategic investment towards business growth.
2. Increased Customer experience(CX):
You need to be where your customers are - hang out where they hang out. Today, it's mostly digital & social media. Leaders want to enhance CX.
3. Cost reduction:
Going digital optimizes business processes and automates repeated & recurring tasks, thereby saving costs.
4. Need to reinvent:
“There is no alternative to digital transformation. Visionary companies will carve out new strategic options for themselves — those that don’t adapt, will fail.”
— Jeff Bezos, Amazon
You can expect Jeff Bezos to get it right! It’s pure survival in the volatile world that we live in - do or die. Reinventing your business in line with what technology offers & what society wants is needed for survival. The best time was yesterday. The next best time, today!
Why do companies mess up their Digital Transformation?
DX is not a sprint - it's a marathon! So while companies start well, they struggle to complete the DX which they embarked on.
Here are some reasons why they don’t go the full nine yards:
1. Lack of Clarity (& disagreement amongst leaders):
What is DX itself is hazy for most leaders - some think it's an extension of the IT arm, some associate it with digital marketing. Due to this, sometimes, the leadership team is not on the same page and differ in the goals/outcomes to be achieved. So what is DX?
“Digital transformation marks a radical rethinking of how an organization uses technology, people and processes to fundamentally change business performance” - George Westerman, MIT principal research scientist and author