Digital transformation – the use of data, technology, algorithms, machine learning and more to develop new working models and serve stakeholders – can enable companies to achieve growth through previously untapped potential. According to Mordor Intelligence, digital transformation is valued at $263 billion in manufacturing markets alone by 2020. By 2026, it is predicted to reach $767 billion.
Although the rewards seem limitless, organizations remain wary of digital transformation. Most of 3/4 (70%) of digital conversions are in short supply according to Boston Consulting Group, who argues that bringing about fundamental change at scale in large and complex organizations is a major challenge.
Failure in digital transformation can be costly, both figuratively and literally. A failed digital transformation can negatively impact employee engagement, attraction, and retention. It can also carry a significant financial cost as product timelines are changed and delayed, all of which will affect the company’s bottom line, and certainly its stock price. it.
So why do digital transformation efforts in the workplace fail? Harvard Business School professor Tsedal Neeley and PricewaterhouseCoopers workforce strategy partner Julia Lamm identify four key factors.
Workplace culture doesn’t like change
“The vast majority of digital transformations don’t work out for everyone,” Neeley told ZDNet.
The biggest obstacle to digital transformation is company culture. Too often, digital transformation initiatives are launched, only to be ignored and avoided by employees who refuse to change. Effective digital transformation must be aligned with the organization’s vision.
First and foremost, companies must realize that digital transformation is deeper than introducing new skills.
Neeley advocates a complete shift in mindset among employees, achieved by ensuring access to rigorous educational resources. Change in workplace culture can be achieved in three steps: define what your change will be, lead a bold transformation, and establish a set of processes and structures that help people make the change. new.
Essentially, Neely says, “Assume that an entire company must acquire a basic level of technology skills to achieve a company-wide digital mindset and move together effectively in a new direction. ”
Lamm adds: “An effective strategy could be to stop using your old, outdated system – this will force employees to adopt a new digital mindset. Also, tap into the company culture. your company to customize and drive digital transformation – adopting a digital mindset should be shaped as an exciting opportunity.”
Indeed, companies apply the concept of continuous learning to all their employees – Atos and Spotifyfor example – have successfully integrated a large portion of their workforce into digital transformation.
Low level of digital literacy in leadership
A company cannot achieve a digital mindset if its leaders lack one. So the impetus is for company leaders to achieve digital mastery before kicking off transformational processes. Company leaders must first understand that digital transformation is not incremental change – it is radical change that involves an overhaul of existing systems, structures and processes. A process as extensive and comprehensive as digital transformation requires a large investment of leadership.
A deep understanding of industry statistics and data is paramount to this. As a result, Lamm advises corporate executives to take steps to ensure that a data professional – whether that’s a business analyst or a strategic data scientist – is in a leadership position. religion.
This change will address another digital conversion blocker – cognitive gap between executives and employees. Often, lacking the sophistication of a company’s digital tools; employees move from savvy personal devices to complex corporate tools, which significantly affects the employee experience. By educating themselves about the realities of technology in the workplace, leaders will be able to bridge this gap, while also effectively scaling and aligning their company’s resources for a better future. digital hybrid.
Ineffective data analysis
Often, digital transformation failures are attributed to a lack of market research, resulting in an inability to keep up with competitors. However, Neeley points out that most companies don’t lack data. The majority fall prey to an abundance of data that has not been cleaned up or collected in a usable form.
Companies must make informed decisions regarding the collection of data for specific purposes. Neeley advocates a shift in data collection methods, from the indiscriminate collection of data that inevitably overwhelms the analytical effort to the computational ensemble designed to answer a formulated hypothesis. attentive.
Additionally, Lamm emphasizes the importance of using the right data architecture and analytics tools, as well as implementing responsible data usage policies. To establish an effective data analytics model, she advises: “Invest in data governance processes, effective analytics systems, data architecture, and hire people with the right skills.” for efficient use of cleaned data.”
The impact of the right data infrastructure is well recognized among companies undertaking digital transformation efforts. Bredin Research and Pure Storage’s 2022 study Of the 500 IT decision makers involved in digital transformation, 84% are making new investments in IT systems and software.
Lack of customer coherence
Many companies are constantly looking for customer feedback. However, in order to successfully achieve digital transformation, companies need to engage in dual transformation, which Neeley defines as designing new products while simultaneously transforming customers so that they can take on technical achievements. number of employees of the company.
The most effective approach to dual transformation unites customers by allowing them to co-design, co-create and co-produce digital products, converting users with one company. This will also allow companies to know and understand their customers on a deeper level, which is extremely important – after all, a 2021 study by Flexeraa computer software company, found that 37% of companies’ IT initiatives worldwide focus on improving the customer experience.
Lamm adds: “Investing in human-centered design. Constantly giving customers throughout the deliberation and seeking process real-time feedback will ensure that new products, are digital transformation will be embraced by ready, educated consumers.”
