We announced new research from Capgemini Consulting with MIT Sloan Management Review partnership on 8 October – here is the press release. Based on survey responses from 1,500 executives in 106 countries, in a cross sample of business sectors, the report examined what their views are on digital transformation, and the subsequent challenges that are being faced by their organisations. You can download the full report here.
Key Report Findings:
- 78% of respondents stated that achieving digital transformation will become critical to their organisations within the next two years.
- 63% said the pace of technology change in their organisation is too slow.
- The most frequently cited obstacle to digital transformation was “lack of urgency”
- Only 38% of respondents said that digital transformation was a permanent fixture on their CEO’s agenda.
- Where CEOs have shared their vision for digital transformation, 93% of employees feel that it is the right thing for the organisation. But, a mere 36% of CEOs have shared such a vision.
In this video, Didier Bonnet, Global Practice Leader, Capgemini Consulting, outlines the outcomes of the report, and points to what it means for organisations in their transformation journeys. He comments on the four main barriers that face those attempting to digitally transform: Leadership engagement, business case creation, formal governance structures and resistance to change.
In the UK, Rick Freeman, Senior Vice-President at Capgemini Consulting, believes there are three specific factors that will make delivering digital transformation a challenge for UK businesses:
- Lack of digital skills available in the UK required to create a capable digital workforce
- Lack of urgency or responsiveness as to the pace required to deliver digital transformation in the board room
- Businesses are stuck in traditional ways of thinking about governing, managing and implementing IT change
One of the main themes that emerged from this research was the difference in perspective between C-level and managers towards the pace of change. As CIO.com reports, some CEOs think that transformation is happening very quickly, but managers do not. Digital transformation is seen as an IT-centric issue rather than an enterprise-wide strategic driver. Ben Gilchriest, Digital Transformation Lead at Capgemini Consulting (Australia) who is interviewed in the article, says: “There’s a big gap between how quickly CEOs think digital transformation going inside their business and how quickly employees think it’s going… And I’m not just talking about social media and mobile apps, but also data analytics and enterprise social networks. CEOs believe it’s going extremely quickly, whereas managers and staff have more of a sense that it’s going too slow. That’s a challenge in how connected CEOs are to digital.”
In terms of applied case studies, the report points to the decision of Starbucks to introduce free Wi-Fi to their stores. Starbucks’ approach to digital was picked up by several commentators, including Consultant-News.com who remarked upon how cutting 10 seconds from every card or mobile transaction reduced customers’ time-in-line by 900,000 hours. This is juxtaposed against the steep rise of their stock price (approx $8 in 2009 to $73 in July 2013) in the time since bringing in a Vice President of Digital Ventures in 2009 (Adam Brotman), who is now Chief Digital Officer.
Struggle to Capitalise
When speaking about businesses ‘struggle to capitalise on technology trends’, Datamation.com summarised the report in six words: “The trouble starts at the top”. They point to the difference in age of executives aged 55 and above as a reason for the difficulty to ‘grasp technology’s benefits’. However, this is contrasted with ‘the possibility that younger people haven’t seen the pile of bones built up from myriad obsolete technologies.’ The piece concludes that a failure to digitally transform results in lost opportunities for enhanced customer experience, and also for improving operations as a whole.
CFOWorld.com also covered the study, looking specifically at leadership engagement. They stated that :“a majority of CEOs are failing to steer their companies toward effective use of new computer technologies, which precludes their organizations from making major business improvements.” Moreover they emphasise the importance of strategy in adoption of digital technologies, and avoiding “the seductive power of shiny digital services, pursuing technology for its own sake.”
The joint MIT and Capgemini report highlights the current state of thinking around digital transformation. What is clear is that of the leaders polled, the majority see digital transformation as a key issue in the next two years, mitigated by aspects of resistance to change, C-level engagement and external competition. However, for organisations that can overcome these barriers, significant and positive business outcomes lie in wait.