Digital Change: Realizing the Potential
More to the Story:
Digital Transformation (DT) is coming of age. Eighty percent of respondents to a recent IFS Digital Change Survey see themselves as “enabled”, “enhanced” or “optimized” to leverage DT. More impressively, 89 percent say they have “advantageous” or “adequate” funding in place for digital projects—a clear acknowledgment that the time of disruptive technologies is here, and that most firms realize that they need to invest.
But why are businesses investing? The survey finds that 27 percent of companies say digital transformation “makes them more competitive,” giving them a vital differentiating edge; 29 percent see the main benefit as “accelerating innovation” and 28 percent “growth opportunities in new markets.”
Companies using digital transformation to ask far-reaching strategic questions–Can I use DT to get a bigger share of market, or increase my product portfolio?—are making the most of the technology’s long-term, strategic opportunities.
But these companies are in the minority. The largest survey group–47 percent–still see DT’s main benefits as “improving internal process efficiencies.” This begs the question: Do companies see the full potential of what disruptive technologies can achieve?
This could mean that companies are investing the majority of funds in making internal processes more effective and thereby failing to enable innovation. Seeing “improved internal efficiency” as the key reason to explore DT is too short sighted. It fails to exploit the strategic benefits and makes it more difficult to win employee understanding and commitment.
Despite plenty of good news, the survey still reveals that 42 percent of the respondents view “aversion to change” as the main barrier to digital transformation. Companies need to think carefully about how they position IoT and other disruptive technologies, how they tell the story of why they are using them, and how they communicate the benefits to their workforce—transforming staff from “data-phobes” to data fans.
Painting the big picture, and positioning digital change as strategic not tactical, as inspiring not invasive, is vital.