“Many firms today have realized that digital transformation is essential to their success [yet] most digital transformations fail,” wrote tech expert Barry Libert and Megan Beck, chief insights officer at OpenMatters, at Forbes.
According to Libert and Beck, the one big reason that digital transformation fails is because the CEO is not fully onboard with the change.
They cited a recent survey that asked the question, “Which executive is leading the digital transformation initiative?”, and found that a majority of employees believe it is the chief marketing officer, and not the CEO, that’s leading the way.
“Unfortunately, lower-level digital transformations, without top leadership, are unlikely to have real impact on their companies,” said the authors.
“Our work supporting organisations going through these pivotal shifts has made it clear that digital transformation will only be successful when led by the CEO and board.”
Many firms would introduce pockets of digital transformation through specialized projects for various departments like HR, marketing, or IT but don’t consider the overall effect these projects would have on the company, thus, most of them fail.
They advise firms to look at it as a ‘digital business model’ and to be prepared for some significant capital reallocation, “not just within business and functional units, but across them”.
In order for CEOs and the board to buy-in, they recommended using a five-step process that they have dubbed, PIVOT:
Begin by asking yourself what your beliefs about value and technology are, what are the benefits and disadvantages that you see, they said.
Then, do an inventory of all your assets, tangible and intangible, and envision the kind of digital transformation business model you’d like to implement.
Follow this up by operating your current business model “while you nurture and grow your new platform and network business,” they said.
Finally, they suggested implementing new metrics for the digital age in order for you to track your progress and performance.
“To be successful, digital platforms need to be unified across the organization, spanning every division, product, service and supplier. Doing this takes real leadership and board support,” they concluded.
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Many firms are embracing the digital transformation but just as many fail at it.