STRATEGY, NOT TECHNOLOGY, DRIVES DIGITAL
TRANSFORMATION PART I
Becoming a
Digitally Mature Enterprise
Digital success isn’t all about technology:
The 2015 Digital Business Global Executive Study and Research Project by MIT
Sloan Management Review and Deloitte identifies strategy as the key
driver in the digital arena. Companies that avoid risk-taking are unlikely to
thrive and likely to lose talent, as employees across all age groups want to
work for businesses committed to digital progress.
1 EXECUTIVE
SUMMARY
MIT Sloan Management Review and Deloitte’s 2015 global study of digital
business found that maturing digital businesses are focused on integrating
digital technologies, such as social, mobile, analytics and cloud, in the
service of transforming how their businesses work. Less-mature digital
businesses are focused on solving discrete business problems with individual
digital technologies.
The ability to digitally reimagine the
business is determined in large part by a clear digital strategy supported by
leaders who foster a culture able to change and invent the new. While these
insights are consistent with prior technology evolutions, what is unique to
digital transformation is that risk taking is becoming a cultural norm as more
digitally advanced companies seek new levels of competitive advantage. Equally
important, employees across all age groups want to work for businesses that are
deeply committed to digital progress. Company leaders need to bear this in mind
in order to attract and retain the best talent.
The following are highlights of our findings:
Digital strategy drives digital maturity.
Only 15% of respondents from companies at the early
stages of what we call digital maturity — an organization where digital has
transformed processes, talent engagement and business models — say that their
organizations have a clear and coherent digital strategy. Among the digitally
maturing, more than 80% do.
The power of a digital transformation
strategy lies in its scope and objectives.
Less
digitally mature organizations tend to focus on individual technologies and
have strategies that are decidedly operational in focus. Digital strategies in
the most mature organizations are developed with an eye on transforming the
business.
Maturing digital organizations build skills
to realize the strategy.
Digitally maturing
organizations are four times more likely to provide employees with needed
skills than are organizations at lower ends of the spectrum. Consistent with
our overall findings, the ability to conceptualize how digital technologies can
impact the business is a skill lacking in many companies at the early stages of
digital maturity.
Employees want to work for digital leaders.
Across age groups from 22 to 60, the vast majority
of respondents want to work for digitally enabled organizations. Employees will
be on the lookout for the best digital opportunities, and businesses will have
to continually up their digital game to retain and attract them.
Taking risks becomes a cultural norm.
Digitally maturing organizations are more
comfortable taking risks than their less digitally mature peers. To make their
organizations less risk averse, business leaders have to embrace failure as a
prerequisite for success. They must also address the likelihood that employees
may be just as risk averse as their managers and will need support to become
bolder.
The digital agenda is led from the top.
Maturing organizations are nearly twice as likely
as less digitally mature entities to have a single person or group leading the
effort. In addition, employees in digitally maturing organizations are highly
confident in their leaders’ digital fluency. Digital fluency, however, doesn’t
demand mastery of the technologies. Instead, it requires the ability to
articulate the value of digital technologies to the organization’s future.
2
INTRODUCTION: DIGITAL TRANSFORMATION ISN'T REALLY ABOUT TECHNOLOGY
One wouldn’t expect that changing the size of
tables in an employee cafeteria could be emblematic of the digital
transformation of a business. But consider this example: The tables in question
were in the offices of a large, online travel company working with Humanyze, a
people-analytics company headquartered in Boston that is a spinoff of the MIT
Media Lab. Humanyze integrates wearables, sensors, digital data and analytics
to identify who talks to whom, where they spend time and how they talk to each
other. The analysis identifies patterns of collaboration that correlate with
high employee productivity.
Humanyze analyzed the travel company’s
workforce and discovered that people eating lunch together shared important
insights that made them more productive. In addition, the analysis showed that
productivity went up based on the number of people at the same table. At the
company being analyzed, Humanyze found that employees typically lunched with
either four or 12 people. A quick inspection of the cafeteria solved the puzzle
— all the tables were for either four or 12 people. The integration of digital
technologies pointed the way to increasing table sizes, which had a direct and
measurable impact on employees’ ability to produce.
About the Research
To understand the challenges and
opportunities associated with the use of social and digital business, MIT
Sloan Management Review, in collaboration with Deloitte, conducted its
fourth annual survey of more than 4,800 business executives, managers and
analysts from organizations around the world. The survey, conducted in the fall
of 2014, captured insights from individuals in 129 countries and 27 industries
and involved organizations of various sizes. The sample was drawn from a number
of sources, including MIT alumni, MIT Sloan Management Review subscribers,
Deloitte Dbriefs webcast subscribers and other interested parties. In addition
to our survey results, we interviewed business executives from a number of
industries, as well as technology vendors, to understand the practical issues
facing organizations today. Their insights contributed to a richer
understanding of the data. Surveys in the three previous years were conducted
with a focus on social business. This year’s study has expanded to include
digital business.
The tale of the tables is a powerful example
of a key finding in this year’s MIT Sloan Management Review and
Deloitte digital business study: The strength of digital technologies — social,
mobile, analytics and cloud — doesn’t lie in the technologies individually.
Instead, it stems from how companies integrate them to transform their
businesses and how they work.
Another key finding: What separates digital
leaders from the rest is a clear digital strategy combined with a culture and
leadership poised to drive the transformation. The history of technological advance
in business is littered with examples of companies focusing on technologies
without investing in organizational capabilities that ensure their impact. In
many companies, the failed implementation of enterprise resource planning and
previous generations of knowledge management systems are classic examples of
expectations falling short because organizations didn’t change mindsets and
processes or build cultures that fostered change. Our report last year on
social business found similar shortcomings standing in the way of technology
reaching its potential.
Our findings this year are based on an
assessment of digital business maturity and how maturing organizations differ
from others. To assess maturity, we asked respondents to “imagine an ideal
organization transformed by digital technologies and capabilities that improve
processes, engage talent across the organization and drive new value-generating
business models.” (See “About the Research.”) We then asked them to rate their
company against that ideal on a scale of 1 to 10. Three groups emerged: “early”
(26%), “developing” (45%) and “maturing” (29%).
To assess companies’ digital maturity, we
asked respondents to rate their company against an ideal organization — one
transformed by digital technologies and capabilities — on a scale of 1 to 10.
Three groups emerged: “early” (1–3), “developing” (4–6) and “maturing” (7–10).
Although we found some differences in
technology use between different levels of maturity, we found that as
organizations mature, they develop the four technologies (social, mobile,
analytics and cloud) in near equal measure. The greatest differences between
levels of maturity lie in the business aspects of the organization. Digitally
maturing companies, for example, are more than five times more likely to have a
clear digital strategy than are companies in early stages. Digitally maturing
organizations are also much more likely to have collaborative cultures that
encourage risk taking.
Several obstacles stand in the way of digital
maturity; lack of strategy and competing priorities lead the list of speed
bumps. Lack of a digital strategy is the biggest barrier to digital maturity
for companies in the early stages, according to more than 50% of respondents
from early-stage organizations. As companies move up the maturity curve,
competing priorities and concerns over digital security become the primary
obstacles.
While a lack of strategy hinders early and
developing companies, security issues become a greater concern for maturing
digital companies.
Across the board, respondents agree that the
digital age is upon us: Fully 76% of respondents say that digital technologies
are important to their organizations today, and 92% say they will be important
three years from now. In this year’s report, which is based on a survey of more
than 4,800 executives and managers as well as interviews with business and
thought leaders, we look specifically at the emerging contours of digital
business and how companies are moving forward with their digital transformations.
CONTINUES
IN PART II
No comments:
Post a Comment