Digital transformation is no longer an optional source of competitive advantage. Rather, it’s an essential fact of daily life that, seemingly, the majority of organisations still struggle with.
Worldwide spending on digital transformation projects is predicted to hit $3.4 trillion by 2026. Nearly three quarters (74%) of organisations consider digital transformation to be a top priority. However, despite widespread engagement and massive capital investment, only one-in-three digital transformation efforts are successful.
Why do digital transformations fail?
According to research by Veeam, IT professionals identify a “lack of IT skills or transformation expertise” as the biggest hurdle in the way of digital transformation success.
Another report suggests that one of the three main reasons digital transformations fail is assuming that digital transformation is an IT task.
“Digital transformation is not just a task for IT. Yet, this mindset is one of the biggest reasons why projects fail,” the report notes. “This inevitably leads to quick, costly investments in disparate technologies that end up making the digital transformation process more difficult (and expensive) to execute.”
IT functions still have a sizable role to play in executing digital transformations. However, dumping the leadership elements of a digital transformation project at IT’s door is a sure way to create pain points down the road. A holistic approach that takes people, portfolio, process, and platform into account is much more likely to succeed. However, responsibility for driving holistic digital transformation cannot fall solely to IT.
The need for IT and leadership
“Digital doesn’t sit still, so neither can your business. To thrive in today’s ever-changing digital world, digital transformation is imperative. But there are many ways to do it. The one constant is your role, as CEO, and the need for your direct involvement,” write the authors of a new report by Deloitte.
CEOs cannot afford to simply maintain the status quo. The report adds that business leaders must be prepared to drive change throughout their organisation in order for digital transformation to be successful.
“You need to be ready to take risks; be constantly on the lookout for disruptive patterns; and be willing to set a transformative, digital vision that enables you to capitalise on opportunities, counter any threat and maximise value,” notes Deloitte.
No matter the scale of digital transformation, from simple data and process changes to fully embracing new business models, there are several practical “truths” that ring true.
First, leadership plays a pivotal role in any digital endeavour. Regardless of its scope, CEOs taking a hand in overcoming obstacles, fostering a holistic perspective, and delegating responsibility while maintaining oversight is paramount.
Secondly, leaders need to increase their involvement as their organisation’s digital aspirations expand. This is especially true in organisations where the culture may be resistant to change.
Lastly, even in firms with high levels of digital savviness, leadership is still vital for steering strategy, fostering innovation, and driving growth. CEOs need to constantly cultivate innovation even in digitally native companies, continuously scouting for future opportunities.
- Digital Strategy
