Technology is truly transformative, and in the last few years, we’ve seen the digital pace of change increase significantly. Digital is now a fundamental part of our lives, both as consumers and on the whole as workers.
We’re beginning to realise the potential of technologies like artificial intelligence and the Internet of Things, to change industries and even society as a whole. And critically, businesses around the world are taking note.
Adopting and adapting to technology is no longer a nice to have; in the era of digital disruption, it’s a necessity. But for today’s organisations successful digital transformation is about much more than technology alone. To realise their digital vision, it’s crucial that businesses also have the right skills, processes and partnerships in place. With that in mind, we set out to explore how well businesses really are approaching digital transformation – and any pitfalls they are facing.
We approached over 1,600 business leaders worldwide to assess their performance against the four strategic elements required for successful digital transformation: People, Actions, Collaboration and Technology – PACT.
And what we found is that although globally businesses recognise the importance of digital transformation, organisations are struggling to balance the elements needed to deliver on digital.
The majority of businesses have already undertaken digital transformation projects, which are either in progress (29%) or have already delivered outcomes (46%). However, while digital transformation is being undertaken, the path is far from smooth.
One in four business leaders (28%) has experienced a failed project in the last two years, costing €555,000 on average. Crucially, 84 percent of businesses say that their customers expect them to be more digital, and 71 percent believe that they are behind their competitors.
These difficulties reflect businesses’ challenges with the four strategic pillars relating to digital transformation. For example, technology will be limited in its impact without the skills and expertise to make it work.
But when considering their approach to people, 70 percent of global leaders admit there is a clear lack of digital skills within their organization, while 80 percent say that a lack of skills is the biggest hindrance to addressing cyber security.
Looking at actions, meaning the processes and behaviours needed to make digital transformation work, also throws up concerns.
Although nine in ten business leaders (90%) say their organisation has a clearly defined digital strategy, three quarters (74%) say that projects are often undertaken that aren’t linked to the overarching business strategy.
Collaboration, and specifically co-creation, are also vital to thriving in our digitally disrupted world. But while most businesses (63%) are undertaking or planning to undertake co-creation projects, 73 percent say that a lack of success within a quick timeframe would quickly put an end to their strategic partnerships.
When it comes to technology itself, it’s positive to see that businesses are aware of the disruptive impact of change, with 86 percent of leaders agreeing that the ability to change will be vital to their survival in the next five years.
As a result, many businesses are planning to introduce cyber security solutions (52%), the Internet of Things (51%) and artificial intelligence (46%). However, 71 per cent remain concerned about their organisation’s ability to adapt to digital technologies like AI.
Digital disruption is a powerful force – and business leaders are adapting, introducing new technologies and evolving their organisations. But while the introduction of new technology has always called for a sense of balance, right now that balance has never been more important. It’s only by bringing equilibrium to the four vital elements of the digital pact – People, Actions, Collaboration and Technology – that businesses can truly transform and thrive in the digital age.
The full research report can be found here: The digital transformation PACT.