BrazilLeaders in digital transformation take an integral approach
While many businesses are racing to implement their digital transformation, few have grasped the key principles behind investing in technology, according to an in-depth study from consulting firm Trianz.
Trianz analysed more than 9,000 responses from leaders worldwide, spanning 18 sectors including manufacturing, banking, construction, consumer products, energy, healthcare and several others. The goal was to gauge the state of digital transformation worldwide.
Having analysed best practices in the field, the consulting firm classified a handful of 400+ companies as ‘digital champions,’ defined as “aggressive innovators achieving strong results.” Understanding the priorities of these businesses could set a benchmark for digital aspirants at various stages of their transformation journey.
Trianz found key differences in priorities between the best and the rest. More than half of all companies continue to believe that digital transformation is about developing websites and integrated portals, which restricts the scope of policies in these organisations. In fact, the researchers found that as many as 90% of digital transformation initiatives in these businesses fall short of the desired returns on investment.
Among digital champions, more than 71% believe that digital transformation is about reinventing a business altogether, which makes their initiatives much broader in reach and scope.
At these organisations, digitalisation is used to improve nearly every aspect of the business, right from the product design phase, all the way through production, supply chain management and marketing. The financial and legal side of the operation can also be optimised significantly using digital tools.
The use of digital to transform this entire suite of operations is just the first step, according to Trianz. Digital needs to become a part of an organisation’s DNA, which entails a digital presence in leadership and decision-making, value transformation and talent & cultural transformation. Only once all these functions are digitally integrated can a business ramp up to the mature phases of digital transformation.
According to Trianz, with the pace of change accelerating, businesses will going forward be increasingly engaged in multiple transformation cycles at the same time, constantly reinventing their offerings and developing new value chains.
Five drivers of digital transformation
Digital champions are further along this path to the future than others. The report stipulates five factors that determine the speed and level of transformation in a business, which also separate the champions from the rest of the pile.
First is the digital IQ of the leadership at an organisation. The more awareness there is in the senior ranks, the more focused and effective digital transformation initiatives are likely to be. Second is the value proposition of the product in question. As pointed out, most businesses allow market opportunities to drive their digital transformation, while digital champions place their focus entirely on the customer.
The needs and expectations of customers are more dynamic than ever in the contemporary market, and businesses that adapt constantly gain a competitive edge. Digital tools can play a big part in this process.
The third factor is the digital talent on offer within an organisation. “People power digital transformations,” according to Trianz, and the speed with which an organisation trains or recruits digital talent can have a significant impact on the speed and effectiveness of its transformation.
Fourth is the use of technology across the value chain. The more aspects of an organisation that are enhanced with digital means, the easier the overall transformation. Lastly, as an organisation gets increasingly digitalised, the quality of cyber security will play a major role in safeguarding its operations, and ensuring that the transformation brings more value than harm.
Read more on the report: How digital transformation leaders are standing out.
