We live in a world full of technology. That’s why companies plan to transform digitally. However, this technological change is not yet entirely possible.
According to an Altimeter report, digital transformation is a change that progresses without a universal vision or map to guide companies to a desired state.
Companies typically seek to change a well-known and confident approach that correlates with “normal” practices. Operating within the boundaries of traditional paradigms without purpose or forward-thinking ultimately challenges the direction, ability, and agility to thrive in the digital economy.
Companies are stagnant
While many organizations today have implemented initiatives aimed at digital transformation, IDC estimates that 59% of the world’s organizations have been trapped in stages 2 and 3, without further progress. That is, although they are running digital projects and making progress, they are not transforming the entire organization.
“When organizations look at their individual digital programs, they can feel like they’re making progress. But they need to take a step back to see if the company at large is digitally transforming. If the answer is ‘no’, they need to address the challenges that impede their progress,” said Meredith Whalen, senior vice president of IT Executive Programs, Software, Services & Industry Research.
In fact, according to IDC, it will not be until 2027 that 75% of the organizations have been digitally transformed.
“Over the next three years, we expect organizations to focus internally on the necessary systems, processes and cultural changes. Meanwhile, by 2022, we predict that 80% revenue growth will depend on digital offerings and operations,” Whalen added.
More and more executives are paying attention to digital transformation
Digital transformation should be the top priority for every business, and although it is one of the most talked about within companies, according to an Altimeter study, many still do not finish investing in new technologies, models and equipment.
Despite all this, more and more companies are digitally transforming, according to data from Altimeter, this year there are more executives who are paying attention to digital transformation, as 57.8% of the executives surveyed are overseeing digital transformation initiatives.
In addition, according to the study, unlike other years, in which CMOs (Chief Marketing Officers) have been the leaders of digital transformation initiatives in companies, this year 28.2% of the respondents indicated that the CIO/CTO is responsible for the compared to 22.9% that indicated that the CMO was. Just behind are the CEOs, who move from second place in 2016 to third this year with a 20.1%.
According to Altimeter’s study, the department responsible for digital transformation is IT (33.7% ) which was located ahead of the Marketing and/or digital department (30.1%). What was observed is the rise of the innovation%department (13.6%), as companies are beginning to realize that corporate innovation is vital to discovering new means and opportunities to compete better.
Key drivers of digital transformation
There are many current trends in business and technology landscapes that point to the shift in digital transformation of marketing and towards IT organization. As digital transformation matures into a business, the investment, implementation, and management of new technologies is targeted at CIOs and IT.
At the same time, companies are facing a wave of disruptive technologies aimed at implementing every part of a company’s technology ecosystem. These disruptive technologies (RA, RA, AI, machine learning, big data, blockchain and IoT) require technical ownership and skills to design and implement new solutions.
In addition, everyone must focus and focus their efforts on the next generation of customers, digital employees, and relevant technologies and processes, as well as possess the business vision to drive business growth.
According to data from Altimeter’s study, this year, 64.6% of the companies interviewed are prioritizing “evolving customer behaviors and preferences” as a key driver for digital transformation. This is an increase compared to 55% in 2016.
Competitive pressures and new markets rank second and third in digital transformation. These rankings reveal the urgency within companies to optimize operations and innovate. Companies surveyed in 2017 are simultaneously experiencing increased competitive pressure (54.2%) and growth opportunities in new markets (46%).
Key challenges for digital transformation
With each new opportunity for companies to evolve, there are significant challenges. How companies target them will determine their growth and progress. According to Altimeter’s study, respondents identified a number of challenges they currently face in their efforts for digital transformation.
The lack of digital literacy is the first challenge for respondents with a 31.4% , and not everyone understands digital, and many companies are not equipped to adapt quickly to disruption. Limiting literacy and digital experience will greatly restrict transformation.
It is followed by respondents seeing digital transformation as expensive (30.9% ). At 30.5,% on the one hand, the business cultures that remain a major obstacle to change are placed, and, on the other hand, the lack of budget.
Digital transformation initiatives
During the early years of digital transformation, technology-focused initiatives were at the heart of all efforts. Since then, the customer experience has dominated as the main focus. Advanced companies prioritize customer experiences to stimulate digital transformation.
The last three years of Altimeter’s research reinforce a customer-centric approach, although there is still a long way to go, as, according to this study, only 34.8% of the companies surveyed said they had followed and plotted completely the customer’s itinerary in the last year, a big drop compared to 54% in 2016.
When, when the survey respondents were asked to describe the different types of digital transformation initiatives, integration between different digital channels was a priority (46.6%), “Integration of all social, mobile, web, trade, service efforts and investments to deliver an integrated, frictionless, omnidirectional customer experience.” Digital customers are increasingly demanding intuitive and seamless travel, although there is also a need to improve in this regard as less than half (48.5%) of the companies surveyed actively study the customer journey of mobile devices.
Any technology, and specifically mobile technologies require a dedicated and different approach to modern commerce than e-commerce. Mobile users are increasingly impatient and demanding regarding the speed, content and design of the website. Businesses that don’t offer the desired mobile experiences miss conversion opportunities.
The experiences of digital customers and specifically mobile customers are more important. This is a promising sign. To support it, a modernized IT infrastructure is needed, which ranks among the top three initiatives.
True omnidirectional experiences succeed in customer-centric only when companies understand how customers prefer to interact with them through their journeys. In 2017, companies emphasize the need to deepen customers’ touchpoints and digital travel (42%).
