Across industries, COVID-19 has accelerated the need to transform companies’ digital capabilities. While executives recognise the importance of digital transformation, not all organisations will be successful in their journey. In fact, according to a new report Flipping the Odds of Digital Transformation Success from Boston Consulting Group (BCG) 70% of digital transformations fail to meet or exceed their target value and result in sustainable change. The new research also suggests that organisations can reverse the odds of success from 30% to 80% if they focus on six principles, including the adoption of a companywide agile mindset.
The research tapped into both internal and external data. Internal data from BCG’s own experience working with companies on their digital transformations and the external data comprises responses offered by 825 senior executives in a detailed survey about their transformation experience. The survey results showed that:
-only 30% of companies met or exceeded goals and sustainable change accomplished.
-44% created some value but missed goals and resulted in only some long-term change.
-26% created value of less than 50% of target and produced no sustainable change.
The results of this research paint a troubling picture, considering the same report also showed that more than 80% of companies plan to accelerate their digital transformations, particularly in light of the pandemic. Digital leaders achieve earnings growth that is 1.8 times higher than digital laggards, and more than double the growth in total enterprise value.
The Six Critical Success Factors for Digital Transformations
The research identifies six steps organisation need to focus on to succeed with digital transformation
1. An Integrated Strategy with Clear Transformation Goals.
2. Leadership Commitment from CEO through Middle Management
3. Deploying High-Caliber Talent.
4. An Agile Governance Mindset That Drives Broader Adoption.
5. Effective Monitoring of Progress Toward Defined Outcomes.
6. Business-Led Modular Technology and Data Platform.
Technology Is Important, but Not the Only Determining Factor in Transformation
The authors of the report found that while technology is important, the people dimension, a company’s organisational structure, operating model, processes, and culture are the determining factor in transformational work.
The report found that organisations tend to underestimate the skills and expertise required to pull off a successful digital transformation. Technology skills are as crucial as broad-based skills, such as persistence, pragmatism, resilience, collaboration, critical thinking, creativity, emotional intelligence, and learning agility.
An Agile Mindset Drives Broad Adoption
The research showed that more than two out of three winning digital transformations had effective agile leadership, while 90% of those in the woe zone lacked this factor.
Business leaders need to adopt agile principles to increase the chances of success for digital transformation projects. Must manage the transformation with an agile mindset, be prepared to steer decisions actively, adapt the governance and adjust changing priorities based on changing context. And at the same time, leaders must drive agile behaviours broadly into the organisation.
Delivering a digital transformation effectively is a highly complex undertaking. Digital transformation is a state of ongoing innovation as new waves of disruptive technologies are released to the market. Companies that are successful in mastering digital technologies, establishing a digital mindset, and implementing digital ways of working can reach a new rhythm of continuous improvement.
A copy of the report can be downloaded here.
At VIP Apps Consulting, our culture, talent and unique methodologies can aid your business in developing the integrated strategy and agile governance needed to maximise success.
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About VIP Apps Consulting
VIP Apps Consulting provide business process management and technology consulting services. We operate in the intersection of technology and business, combining deep business and industry insight with the understanding of how technology and innovation impact the industry and business model. Our unique process-driven approach and AMOBI and DELIVER proprietary methodologies deliver greater value and efficient business outcomes, minimising cost and risk. Our team has extensive experience within the leasing and financial services industry with the knowledge, capabilities and operational expertise, to help organisations assess and implement changes.