Inertia and complacency towards new technology is simply not an option for any organisation, according to Capgemini Consulting which (in partnership with MIT Sloan Management Review) conducted a global survey into Digital Transformation.
The study explored the opportunity for radical business change offered by the convergence of new digital technologies such as social media, mobile, analytics and embedded devices. And revealed some opportunities for channels to get closer to customers and help their issues.
The study - involving over 1,500 executives in 106 countries - shows that the opportunity offered by new digital technologies is clear. 78% of respondents feel that Digital Transformation will be critical to their organisation within the next two years. Where Digital Transformation is a permanent fixture on the executive agenda, 81% of people believe it will give their company a competitive advantage.
However, business leaders are struggling to translate this opportunity into a vision for change or a roadmap for execution. 63% of people said the pace of technology change in their organizations is too slow.
• Engaging the organisation. Competing priorities and lack of digital skills were the top two challenges in execution.
•Getting leadership aligned and committed to Digital Transformation. Lack of urgency or no 'burning platform' was the number one most cited organizational barrier. In addition, only 36% of leaders have shared a vision for Digital Transformation with their employees (but within the third that have shared a vision, 93% of employees are behind it).
• Making the case for Digital Transformation. Only about half of organisations create business cases for digital investments.
• Putting the right governance structures in place. 40% said they had no formal governance practices around Digital Transformation and only 26% are using KPIs to track progress.
Among the obvious obstacles to digital transformation is lack of clarity about the pay-off. Companies want to know that they are getting something beneficial from investment in new technologies. Corporate leaders need to leverage metrics to help make digital transformation happen.
Only half of the companies surveyed said they create business cases for their digital initiatives. It can be hard to gauge a return on investment for emerging technologies. "It is still difficult to compute ROI on many social media activities (at least to the satisfaction of the executive board)" said one survey respondent.
Many organisations struggle to compute RoI. Merely one-fourth report having established key performance indicators to help them measure the impact of their digital transformation.
The authors of the report suggest that the pace of change may be a problem for particularly the older managers. For people of any age, there is also the possibility of technology fatigue.
"I get the impression sometimes that a lot of the management teams at companies say, 'would you please stop the technology innovation? We can take a break from this and just digest what we've been doing for the past few years'," said Andrew McAfee of the MIT Centrr for Digital Business.
"Unfortunately, that's not going to happen, so a critical skill at the top of a company is to have someone who can keep scanning the technology landscape and explaining it to the rest of the management team to say, gang, this is the cloud - it's actually a big deal. Inertia and complacency are deadly in the world that we live in today."