Three deadly misconceptions about digital transformation
Everyone is talking about digital transformation; but how many people truly know its true meaning? It seems very few!
During conversations with organisations operating a wide array of industries, we have observed three commonly held misconceptions about digital transformation. These misconceptions are significant and should concern these respective company stakeholders because they are largely held by highly experienced professionals in executive and middle management roles.
These misconceptions are centred around the belief that:
“Digital transformation is nothing new; we’ve been doing this for ages. Digital transformation is just a fancy new term”.
Given the excitement and occasional hype surrounding the future of digital business, peoples’ skepticism about digital transformation is understandable. Although skepticism is healthy, the nature of digital transformations is a significantly different undertaking than regular IT or digital projects.
We are concerned about a lingering attitude of nonchalance held by ‘seasoned professionals’ toward their company’s digital future. This attitude of overconfidence presents a significant risk in itself as 84 percent of digital transformations continue to fail. Leaders’ laissez-faire attitudes toward appropriately supporting, structuring and de-risking digital transformations is the prime suspect. Lingering misconceptions about the magnitude of digital transformation plus inadequate action to de-risk digital transformations often equals disaster for companies operating in a disrupted market.
In this Human Sparks Insight, we would like to provide three reasons why digital transformation is different from regular digital/IT projects:
- Digital transformation is about business model change not just incremental capability uplifts to a part of the business (such as software implementation project). Digital transformation is characterised by the future-state business model being enabled by ‘digital technologies’. For this reason, digital transformations are sometimes called ‘digital business transformation’.
- Digital transformations are done faster than most digital projects. Speed is especially important because industries and customer expectations are changing faster than ever. Digital transformations that happen too slowly can miss their ‘window of relevance’. In many cases today, we observe large enterprise Clients setting expectations to achieve in 3-5 months what would, only a decade ago, be scoped as a multi-year initiative.
- Digital transformation is more consequential – failure to ‘get-it-right’ can be the end for companies. Remember, digital transformation is about business model change, speed to market and fostering value. The ongoing need to stay relevant is key to business survival. Digital transformation is the number one strategic lever for competing in business today!
There has never been more evidence around that digital transformation is real (not just hype) – yet we still hear so-called season professionals brush-off the term with casual disregard.
In many cases, it seems that too much experience can result in people holding onto dated ideas that can hinder one’s ability to embrace important changes.
Digital transformation is a significant departure from what most executives have experienced in their careers. It takes humility to recognise and accept that the key differences presented above require new ways of thinking and more importantly ways of working. We encourage you and your organisation to not write-off the term digital transformation as a meaningless fad but rather to understand its implications for your industry and organisation.