Digital Transformation in 2020 and Beyond

There’s no doubt that digital transformation has been high on the business and IT agenda for a good few years now. I wanted to be precise in that opening sentence, but I think it’d be too difficult to pin down when the digital-transformation trend first appeared. For example, Wikipedia states that:

“In November 2011, a three-year study conducted by the MIT Center for Digital Business and Capgemini Consulting concluded that only one-third of companies globally have an effective digital transformation program in place.”

Making digital transformation something that has been around for much longer than we think.

But this is looking back. This blog will look forward – to articulate where digital transformation currently is and where it’s heading as we journey through this new decade. Please read on to find out more including five tips for digital transformation success.

This blog by @Doronywood looks at where digital transformation currently is and where it’s heading as we journey through this new decade #digitaltransformation Share on X

The current state of digital transformation

This blog isn’t going to provide a detailed description of what digital transformation is and why it’s needed in terms of organizations being “better, faster, and cheaper.” If you’d like to read more on what digital transformation is, then Joe the IT Guy has two helpful blogs on the topic:

1. An A – Z of Digital Transformation
2. How ITSM Tools Help with Back-Office Digital Transformation.

Alternatively, here are some interesting – and I think valuable – statistics on the current state of digital transformation. And please bear in mind that any statistics might differ when factors such as company industry, size, and geography are considered.

Let’s start with some market-size-type data. Here, the IDC FutureScape: Worldwide Digital Transformation 2020 Predictions report (October 2019) states that:

“Direct digital transformation (DX) investment is growing at a compound annual growth rate (CAGR) of 17.5% from 2020 to 2023 and is expected to approach $7.1 trillion as companies build on existing strategies and investments, becoming digital-at-scale future enterprises.”

So, we’re talking about some big numbers.

But who’s involved – in terms of companies and its employees? The 2019 MuleSoft Connectivity Benchmark survey and the associated Top 7 Digital Transformation Trends Shaping 2020 report – which states that it employs “data from over 850 global IT leaders, 9,000 consumers, and third-party findings” – found that “97% of IT decision-makers are involved in digital transformation initiatives at their respective organizations.”  So, nigh on all organizations can now be assumed to have some form of digital transformation initiative in play, with senior IT personnel involved.

However, it’s not just the IT decision-makers that need to understand and be involved with the need for digital transformation. In 2019, the MIT Center for Information Systems Research found that “Companies whose boards of directors have digital savvy outperform other companies. To be more specific, we found that it takes three members with digital savvy to have a statistically significant impact.”

So, all is good in the world when it comes to digital transformation?

Not necessarily. The media is still full of reports about the high level of organizations with failing, or failed, digital transformation initiatives. With it easy to find statistics such as 70% of all digital transformation investments fail to deliver (but please be careful to check the age of any such statistics, because there are a lot of older statistics still being used in current digital transformation articles without reference to their date of origin).

However, the good news is that much has been learned about what’s needed for digital transformation success – with this going far beyond the need to effectively manage the implementation of new technologies and processes.

Here @Doronywood looks at five tips that are focused on avoiding the commonly identified digital transformation failure factors. #digitaltransformation Share on X

5 tips for digital transformation success in 2020 and beyond

There are many traditional change management and program management tips that could be included here. But these are five that are focused on avoiding the commonly identified digital transformation failure factors:

1. Understand what digital, and hence digital transformation, means for your organization

McKinsey expresses the issue well through the term “fuzzy definitions” which is where “…very few (leaders) have a broad, holistic view of what digital really means.” And, as a result, “companies struggle to connect digital strategy to their business, leaving them adrift in the fast-churning waters of digital adoption and change.”

2. Have a consistent corporate goal, or set of goals, for digital transformation

As often expressed in articles, digital transformation can mean different things to different people (within the same organization). And without clarity and agreement, on digital transformation, how can success be delivered? In a late 2019 HBR article on why digital transformations fail, Accenture stated that organizations need to “Define and articulate not only the opportunity but also the problem it solves, and how the company will build the organization around the desired solution before investing.”

3. Consistently measure digital transformation progress and success

It’s not rocket science, just good old-fashioned performance management. Hopefully, after bullet #2, your organization knows its goal(s) and now it needs to understand how well – or even if – it’s heading in the right direction. Plus, whether additional resources and course-correction are needed. Without this regular insight into progression and achievements, an organization is likely to succumb to an oft-quoted digital transformation failure driver – the inability to scale from successful pilots to enterprise-level success. Which is likely also negatively impacted when organizations try to change, and do, everything at once.

4. Recognize that digital transformation is a people change initiative

This has been said many, many times over the last few years but it’s still worth repeating. Digital transformation initiatives change the traditional ways of working and hence it requires organizational change management tools and techniques to help ensure success. Joe has again written on the importance of this topic: What’s Organizational Change Management and Why Should ITSM Pros Be Bothered?, An A – Z of Organizational Change Management, and Winning with Organizational Change Management.

5. Appreciate the “duality of digital,” which is again a McKinsey term, and hence how digital transformation fits into company strategy

The key here is to appreciate that there’s no black-and-white crossover between “old products and services” and “new products and services.” Instead, there’s a need to transform the status quo – in terms of “better, faster, cheaper” – while also investing in innovation. So, don’t throw everything out in an attempt to start again.

Digital transformation initiatives change the traditional ways of working so it requires organizational change management tools & techniques to help ensure success – @Doronywood #digitaltransformation Share on X

Here’s hoping that your organization’s continued digital transformation investments deliver real business value in 2020 and beyond. And, if you’d like to learn more about how other organizations have successfully approached digital transformation, please check out some of these additional resources:

• How the Information Services Department Drove Better Patient Care
• The Sky’s the Limit with These Digital Transformation Heroes
• Digitization Comes to the Rescue in the City of Allen, Texas
• Flying High: a leading aircraft leasing company embarks on a digital transformation journey

Of course, if you’ve had specific digital transformation issues, or great successes, I’d love to discuss. Please let me know in the comments, or contact me on Twitter or LinkedIn.”