Digital transformation projects must be based on a clear vision that is propagated by the CEO to be successful, our research finds.
In a review of articles and studies on the keys to digital transformation success, there’s near uniformity around the idea that the C-suite in general, and the CEO in particular, must lead the vision.
Tom Puthiyamadam of PwC said recently the CEO is increasingly at the forefront of digital transformation. “I think the concept of the Chief Digital Officer at some point needs to fade because I don’t think a CEO can at any point outsource the most critical movement in their company,” he said. “Leveraging AI, automation, all this new technology innovation—I don’t know how you outsource that to somebody else.”
A MIT Sloan review survey of more than 4,300 managers, executives, and analysts worldwide found that more digitally mature organizations are likely to have the CEO, rather than the CIO, lead digital transformation efforts. This may be because digital transformation is as much a cultural and operational change as it is a technological one.
As this ZDNet article points out, CEOs have the institutional gravitas to push the entire organization in the direction digital transformation requires.
A Digital Transformation Plan Is Key to Success
A plan for transformation, clearly articulated is vital to success. A McKinsey report found that companies where the management team put in place a change narrative for the digital transformation were more than three times more likely to succeed than those that did not.
Additionally, companies were twice as likely to have positive results if senior managers “fostered a sense of urgency” to make the transformation occur.
Finally, companies with clear metrics to assess implementation of the vision had twice the success rate of companies that lacked these measurements.
A comprehensive Harvard Business Review article on digital transformation asserts that strategy must come before anything else, saying, “Figure out your business strategy before you invest in anything.”
While this might seem obvious, many companies skip right to purchasing technology without first understanding what they will use it for.
CIO.com agrees, saying that establishing a “Business Why” for the digital transformation is key to long-term success.
This ‘why’ is aligned to business objectives such as making the organization more agile or adaptable, keeping up with competitors, and attaining greater profits.
Once the vision is in place, the CEO and the rest of the company’s leadership must show clear support for its implementation. As Justin Grossman, CEO of meltmedia writes in this Forbes.com piece, thoughtful planning is the basis of long-term success. He explains, “Savvy teams assess organizational goals, analyze integration needs and evaluate impact before designing (or changing) their digital roadmaps.”
Digital Transformation Is a Long-Term Process
Many technology experts point out the need to view digital transformation as a process or a journey that will change the business permanently, rather than an instantaneous change.
Deloitte’s “Strategy, Not Technology, Drives Digital Transformation” sums up this idea nicely. The report’s authors found that 80 percent of digitally mature organizations had a clear strategy compared to 15 percent of companies that were still in the nascent stages of digital maturation. “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.”
Thus, before being wowed by vendor stories of the capabilities of the newest technologies, companies must turn inward and establish a clear understanding of why they want to digitally transform in the first place. Without such a vision, companies will be relying more on hope and luck to drive change rather than asserting control over the process.
Dan Woods is a Technology Analyst, Writer, IT Consultant, and Content Marketer based in NYC.