Modern organisations know that digital transformation is essential to stay competitive, no matter what industry they’re in.
But what they might not want to hear is that statistically, digital transformations are even less likely to succeed than other types of organisational transformations.
The balance between risk and reward is even greater than normal.
This creates a unique challenge. Digital transformation is a must but the real need for embarking on a digital transformation journey needs to be well understood before companies launch into the unknown.
Why is digital transformation so important?
Digital transformation is necessary because rapid technological change is displacing traditional business models, processes, and ways of working. By harnessing new technologies such as Big Data, mobile internet technologies, IoT, and AI powered systems, companies can fundamentally transform their operations and boost their productivity.
This can lead to faster, integrated processes across entire ecosystems that lead to enhanced performance and competitiveness.
It can also act as a catalyst to bring in new talent that has the skills to improve the capabilities of the entire workforce and unlock hidden value.
Digital transformations bring widespread changes to both individual roles and the culture of modern workforces. This means that companies not only need to transform to be able to boost productivity and retain market share but also need to transform the types of working environments they create so that they can hold onto their talent.
Essential but challenging
The trouble is, digital transformations are hard.
A recent McKinsey study indicates that only around 30 percent of organisational transformations succeed and that success rate halves for digital transformations. The study found that the most important factors that influenced the final success or failure of digital transformations included having the right leadership in place. In some cases this can necessitate adding new digital leaders at the outset of the planning process to ensure the digital transformation process and path is fully grasped.
Companies should also recognise that the digital transformation processes ultimately must result in leveraging new technologies to build the capabilities of their workforce for the future. New technologies are not effective without also leading to the uptake and empowerment of employees to utilise the technology in their daily role and enabling them to work in new ways.
The way forward
Ultimately, it is paramount that company leaders understand not only that they do need to implement digital transformations but also need to be aware of the factors that lead to its success.
Before embarking on the digital transformation journey, leaders must truly reimagine their workplace.
This means being bold in the implementation of their transformation strategy or risk the transformation resulting in a return to the status quo.
Companies should look to make sure that improving digital agility applies to all aspects of the working environment so day to day tools are also given a digital upgrade at the same time as other new technology systems are introduced. Read on here for Part Two of Finite’s Digital Transformation blog series The 5 Keys to Unlocking Digital Transformation in Your Company.