You’ve heard it over and over again: “if you want your company’s digital transformation to be successful, then you need to do this! Otherwise, your organization will fail.” What is “this?” Well, it’s anything and everything from Automate. Go Mobile. Migrate to the cloud. Incorporate AR. The list goes on and on.
Companies eager to remain competitive (not wanting to go the way of Blockbuster and Borders), run out and spend most of their budgets hoping for results…
Except nothing happens. And when executives ask why, they tend to get sheepish answers that call for more technology. Or a different piece of tech. Or stating that the data’s wrong. Or that the organization just needs to wait and the results will come.
Except they don’t.
Executives then pour more money into these digital initiatives and hope for the best. Until it reaches critical mass, and soon everyone realizes that those efforts only led to failure. That’s why the track record for companies going digitizing is not impressive, with some believing it’s more hype than anything else.
What Is the Failure Rate for Digitization?
Most efforts to digitize fail. And when we say most efforts, we mean most efforts. You may have already heard that a shocking 84 percent of efforts to digitize fail. But, that’s not all. Here are a few more bleak stats about digitization according to a Snap Logic research report:
- 40% of enterprises are behind schedule with digitization efforts
- 69% need to reevaluate their strategies to digitize
- 59% wish they could have done it differently
Compare that to…
- Only 13% of ITDMs are confident that they’ll reach their digital goals
Failure isn’t pretty, either. When GM tried to implement too many initiatives too fast with GE Digital, they ended up losing a lot of profits, limiting any future digital endeavors. BBC wasted nearly £100m trying to create its Digital Media Initiative (DMI). And Co-operative Bank’s attempt to replace their legacy system led to a £1.5 billion loss.
These businesses wasted a lot of money and failed. Yet, despite signs that say otherwise, Market predictions put companies’ digital transformation spend at $5.9 trillion from 2018 – 2021. So, why are so many businesses willing to take the risk and go digital? The answer to that rests in the benefits of its potential success.
Digital Transformation Success Stories
It’s not all doom and gloom. Several companies have seen the benefits of pursuing digital initiatives, despite the risk. That’s because when done properly, the payout is well worth it.
- Nissan’s move to a “digital workplace” promotes mobility for its employees while breaking down siloes. Employees can work from wherever, accessing the application stacks at Nissan while keeping their systems secure. The CEO went further, opening up digital hubs in India that help the company source IT talent that creates software specifically for Nissan.
- StubHub developed a hybrid cloud system that allows it to process its numerous clients that have 1000s of ticket requests each day. Their cloud infrastructure makes scaling easy. More so, they’ve added features like reselling tickets online using images taken with a cellphone. And with 3D viewing capabilities at venues, customers can now check out a seat’s potential view.
- Weight Watchers developed an application that allows users to get even more results from their program. By using voice commands with Google Assistant and Amazon Alexa, customers can find out calorie information on foods. And soon, they’ll be able to listen to recipes through the app while cooking at home. Effortless interaction with their platform.
In fact, while these are only three examples, they serve a point of contrast compared to the failures. When done right, digital transformation gives companies the edge. Yes, technology helped make it happen, but it wasn’t the main focus. To paint a better picture of why they succeeded, we need to look at what a Digital Transformation really is.
The Real Definition of Digital Transformation
People often gravitate towards products as a solution, rather than a tool. However, transforming your business digitally goes beyond implementing technology and strategies. It’s about rethinking how your organization does business. If your efforts to digitize your organization leaves your company functioning the way it was before, then you’ve failed.
Rather, transformation means rebuilding your company as something both different and better than it was before. Tools like integrations, APIs, automation, and the cloud are just that. They’re tools. And even though they’re great assets, if you fail to take into account that the way people do business is changing, then you’ll fail to find any benefits in a digital transformation.
Digitizations Major Obstacle: A Lack of Agility
You can’t understate the role of leadership in successful efforts to digitize your organization. It needs to be as much of a top-down effort as a holistic approach. Many people who lead organizations got there because of a set methodology. And that mentality will need to change moving forward.
Companies need to be agile. Don’t mistakenly believe that this ends with technology. Instead, you need a growth mindset, one open to rapid change. That’s the world we live in. There’s no major disruptor on the horizon. There are disruptors everywhere. Sorting through what’s available to you and how it can help you reach your customers in a meaningful way is crucial.
Digitization MUST Be Customer Focused
Customer expectations drive digital transformation efforts. More and more, it’s about meeting your customers where they are. Let’s face it. Customers’ expectations are high. People want things to be instantaneous and effortless. And if you can’t provide that, they’ll find it elsewhere, and fast.
You need to be visible, helpful, and available, but NEVER in the way. The moment you become an obstacle, you become a problem. And once that happens, your customers will start looking towards your competition.
What Does This Mean for Your Organization?
If you want to see an ROI for your digitization efforts, then you need equal parts strategy, mindset, and technology working together to enhance your customers’ experiences. Find the root cause of your customers’ pain. Then look at how they’re attempting to solve that pain and how effective their efforts are. Only once you understand that process should you look to how you can better incorporate technology to deliver on those expectations.
While it may seem commonsensical, so many organizations do it the other way. They want AI, Blockchain, and other innovations because they believe having it will lead to success. As if investing in any of these somehow makes it easier to tick the box next to “Complete Digitial Transformation.” So they invest in tech without any clear idea of how that will help deliver on the expectations of their customers. And with no clear strategy in mind…
This only leads to waste.
Creating a Strategy for a Successful Digital Transformation
The first step, and often most difficult, is figuring out how to set up a digital transformation for your business. With so many paths to take and so many signals to read, it’s hard to figure out where to start and where the process will end. Yet, despite the pressure t0 remain competitive, many organizations fall into a kind of analysis paralysis, failing to implement even the most basic changes that will give them the edge.
How do you avoid paralysis, or worse, investing in the wrong strategy that only complicates matters while driving up costs? You need a trusted consultant with industry-wide experience. One that knows how to work with any business to plan out successful digital initiatives.
Quandary Consulting Group has a proven track record for helping businesses design customer-centric digital strategies. We work with your company to figure out how technology will best serve your customers. Once we have a clear plan of action in place, we create the workflows needed to streamline your business and keep it competitive.
For more information on how to design a winning digital strategy, contact Quandary Consulting Group.