Performance Selling Blog

Business Transformation, Sales | April 24, 2017

Drivers and Barriers of Digital Transformation

By: Krystal Rose

Customer Experience Consultant, Oracle

The method of Digital Transformation (DX) is not a new business concept. In fact, it is a process that has been essential to the evolution of businesses since the early 1990’s. If you are currently researching DX you may find varying definitions of what Digital Transformation is. In my own investigation comparing various explanations, I have found similar key takeaways. A hybrid description that is a derivative of the key takeaways is as follows:

A strategic journey of planned organizational and operational change that is driven by threats, risk, revenue or competition, empowered by the workforce, and enabled by innovation and technology.

While the framework for successful Digital Transformation will be unique for each business, there are common drivers and barriers to the DX process. It would behoove organizational leaders to explore and prepare for the following listed drivers and barriers (as well as those not listed) as they transform their business.

Drivers of DX:

  • Digital Disruptors (New and Unexpected Entrants to the Market)

The success stories of Uber and Lyft upsetting the transportation industry with their on-demand ride sharing framework are commonly used as an illustration of digital disruption. This is because they are a prime example of how strategy and innovation, enabled by technology, can unexpectedly influence the course of an entire industry. Now more than ever, with the constant and speedy evolution of technologies, business leaders should transform the way they think about competition and disruptors of their industry.

  • Changing Demographics

As the retirement of baby boomers continues to gain momentum businesses will begin to feel the shift from both a customer perspective and a workforce perspective. As baby boomers, or any generation for that matter, transition into new life stages their expectations, interests and needs from brands and employers will evolve. If companies are not agile and understanding of the changing needs of their target audience, they will struggle to attract and retain customers.

  • Customer Expectations

Advanced technology has enabled consumers to share their opinions, experiences and ideas with the masses at the touch of a button. The modern customer values the opinion (user generated content) of strangers over advertisement and has high expectations for overall customer experience. Customers expect fast responses (60 minutes is the average acceptable wait time) from brands, easy access to solutions and tools, self-serve options, customized messaging and they want to always feel valued at each touch point of their journey.

Barriers of DX:

  • Workforce

From entry level positions to the C-Suite, the entire workforce plays a critical role in a company’s Digital Transformation. According to a study conducted by Dell and Hitachi, 56% of executives surveyed believe that the human aspect is the key to a successful transition. That same study highlights that a third of companies state their largest barrier to DX is the human aspect. These findings tell businesses that the workforce is critical to success yet a big challenge to master. There are many elements that role under the human factor such as;

  • Top talent, which drives knowledge sharing, creativity and innovation, and culture, which empowers employees to take efficient and effective action.
  • Working across silos via integrated technology to share and analyze data, reduce gaps in insights and support a company-wide strategy.
  • Ownership of DX. Consensus on who owns Digital Transformation within the organization is difficult to find. There is support for arguments against and for, the CIO, CMO, CXO, CDO, CEO, etc. leading the DX journey. Yet, it is safe to conclude that ownership depends on the structure and culture of an organization, as well as the resources and data available. Whomever has the ability to enable the DX strategy across all areas of the business and throughout the customer experience, holds ownership.
  • Data & Analytics

Challenges that organizations face when it comes to big data is management’s lack of understanding and lack of organizational alignment. According to NewVantage Partners, more than 85% of respondents to a survey reported that their firms have started programs to create data-driven cultures but only 37% report success thus far. This indicates that there is awareness of the importance of harnessing data but only a third of companies are capitalizing on big data.

  • Operational Agility

In today’s business, operational agility is known by many names such as “lean” or “design thinking”. Regardless of what your business calls it, operational agility is key to keeping up in the digital space. Along with having clear vision, strategy and an empowered leadership, an organization needs to be positioned to quickly and efficiently adapt to changes in technology, market trends and customer needs.   

Closing Remarks:

After reading these several drivers and barriers to Digital Transformation, you may recognize that DX is not about technology but rather insight, people and process. Oracle CEO Safra Catz once stated, “the hardest part of digital transformation isn’t technology—it’s managing the business through change…but when organizations embrace digital technology and navigate those changes, they not only meet customers’ needs better and empower employees, but do more while spending less.”

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