6 tips for reinvigorating your digital transformation

Summary

About 90% of organizations have already embarked on a digital transformation (DT) project. But nearly 90% of those organizations are unable to sustain the success that they’ve achieved with their DT efforts long-term. And DT projects are taking twice as long, costing twice as much as organizations had originally anticipated.

If your organization is starting to suffer digital transformation fatigue, you might be tempted to give up on your efforts. But that would mean forgoing the significant financial benefits that organizations who stay the course achieve.

A better option is to reinvigorate your digital transformation initiative. These six tips can help.

Are you tired of digital transformation?

For more than a decade, pundits, researchers, analysts, vendors, speakers, and experts of all kinds have been extolling the virtues of digital transformation (which is sometimes abbreviated as DT or DX). And business leaders, understanding the opportunities and the potential risks of failing to keep up with the competition, have eagerly embarked on DT initiatives. In fact, the researchers at McKinsey found, “Nine in ten C-level and senior leaders say their organizations have pursued at least one large-scale digital transformation in the past two years.” And if you search for “digital transformation” on Google, you’ll get back more than 616 billion results.

That’s billion. With a b.

For the operational leaders on the front lines of transformation efforts, it can be a bit much. Some people feel digital transformation fatigue. They don’t believe they can handle more change. After the pandemic, wars, political and social unrest, and so much rapid technological change, people are just worn out. 

Making matters worse, transformation efforts are taking a long time. According to some, the journey is taking large companies twice as long and costing twice as much as anticipated.

For many people, the prospect of transformation just doesn’t seem as exciting anymore. The analysts at McKinsey concur, writing, “Many organizations embark on large-scale transformations, only to end with frustrated leaders and worse-than-expected long-term results. These efforts typically start with high aspirations and significant energy, then lose an average of 42 percent of their expected value in the later phases of the transformation program, where the focus shifts to executing and sustaining change.” So how did we get here?

A brief history of digital transformation

From a certain point of view, digital transformation began at the dawn of the computing era. As far back as the 1950s, computer scientists were hypothesizing about how digital technology might transform daily life.

But the phrase “digital transformation,” didn’t really come into popular use until 2011. That year, Capgemini and The MIT Center for Digital Business published a study titled Digital Transformation: A Roadmap for Billion-Dollar Organizations. Its findings set off a surge in interest.

At that time, the study authors found that large enterprises were just beginning their transformation journeys, often spurred on by disgruntled employees who wanted to be able to use the same technology they were using at home. For example, one participant told researchers, “Come on. I know the company’s more than 100 years old, but our IT capabilities don’t have to match the age of the company.” And another respondent said, “Officially iPads are prohibited by our policies. Yet 50% of our employees are using them at work.”

Executives got the message. Over the next nine years, they embarked on digital transformation initiatives at a measured, sustainable pace.

But that all changed when COVID-19 struck.

The pandemic spurred companies to dramatically increase their speed of transformation. Researchers from Baker McKenzie found, “In 2020, 58% of digital leaders said that COVID-19 had accelerated their plans for DT and cloud.”

Those efforts have reshaped organizations. And now, eager to sustain the results that they have seen, organizations are embracing new aspects of technology, such as artificial intelligence and machine learning. The same Baker McKenzie report notes, “The latest data shows DT has evolved from an urgent effort to a permanent part of the enterprise—with organizations launching and scaling DT activities and tackling cybersecurity as a priority. Cybersecurity (46%), cloud computing (44%) and AI (artificial intelligence) (40%) are the top three strategically important technologies to organizations’ DT strategies.”

Unfortunately, sustaining those efforts has proven incredibly difficult. According to McKinsey, “While 56 percent of respondents say their organizations have achieved most or all of their transformation goals, only 12 percent report that they have sustained these goals for more than three years.”

The majority who haven’t been able to sustain their digital transformation efforts are missing out on substantial financial rewards. McKinsey also finds, “Respondents who say their companies have achieved their implementation performance goals and also sustained the transformation gains for more than three years report twice the rate of financial growth as their peers.”

Digital transformation

As you continue on your digital transformation journey, it’s a good idea to pause and make sure everyone in your organization defines digital transformation in the same way. As your team discusses what digital transformation means for your company, you might want to consider incorporating elements from other popular definitions: