by Thor Olavsrud

How to succeed at digital transformation

Oct 28, 2015
CIOCMOIT Leadership

Most companies are struggling to make digital a competitive advantage. According to a new report by Accenture Interactive and Forrester Consulting, digital transformation requires leadership that can align departmental stakeholders behind a clear vision.

digital transformation competitive
Credit: Thinkstock

Businesses are almost universally undergoing digital transformation today, but only five percent of organizations say they have mastered digital to a point of differentiation from their competitors, according to a new report.

On behalf of Accenture Interactive, in May  Forrester Consulting conducted an online survey of 396 organizations across the U.S., Canada, the U.K., Germany, France, China, India, Japan, Brazil and Mexico to evaluate their digital and customer experience strategies. In the report, Digital Transformation in the Age of the Customer, Forrester found that “improving the customer experience” (21 percent) edged out “growing revenues” (17 percent) as the top business priority for the next 12 months.

[Related: How ‘Digital Masters’ drive transformation from the top down ]

Additionally, companies pursuing digital transformation are primarily driven by increasing margins (58 percent), speed-to-market (51 percent) and customer satisfaction (48 percent), according to the report.

New rules of engagement

“Digital transformation at its core is a way to focus the organization and leverage a lot of the newer ways they can engage with their customers, employees and suppliers,” says Jay Dettling, managing director, Accenture Interactive, and North America digital commerce lead.

“Look at how fast consumer behavior is changing and how great customer experiences are jumping industry boundaries,” he adds. “Companies need to ask themselves how long customers will accept experiences that are just ‘good enough’.”

Companies are focusing their digital channel efforts on making customer interactions more engaging. The report found 63 percent are planning to enhance their online experience and 46 percent are looking to add or improve their mobile offerings. But only 39 percent are focused on improving their in-store experience.

[ Related: How digital transformation is disrupting IT outsourcing ]

“Customer experience is now clearly at the heart of digital transformation, and digital is at the center of that customer experience,” Anatoly Roytman, managing director, Accenture Interactive, and global digital commerce lead, said in a statement Tuesday. “But many companies have considerable ground to cover on their path to becoming digital enterprises. They’re challenged with setting a digital vision and strategy, getting the right people in place and measuring digital success.”

Who’s running the digital show?

The report found enormous differences in opinion as to who should be setting the digital vision and strategy. According to respondents, ownership is currently divided between the CEO (38 percent), CIO (33 percent), chief digital officer (10 percent) and CMO (8 percent). But when asked who should own the organization’s digital vision and strategy, it was the CIO who came out on top (30 percent), followed by the CEO (27 percent), the CDO (17 percent) and the CMO (8 percent).

[ Related: Why enterprise digital transformation efforts stall ]

“I think it’s so hard because of the scope of the organizations which it impacts,” Dettling says. “You have to connect different departments internally and align them to a set of goals.”

To be sure, he says, technology is integral to digital transformation, but business strategy, operational processes and metrics all need to line up as well to make that transformation successful. The leader who sets the vision and strategy needs to have a strong handle on the technology and a clear understanding of the other elements as well.

“You’re going to be making a significant investment in technology,” Dettling says. “But if you’re a business leader and you think that’s the main point of emphasis, you’re going to be missing the other legs of the stool. The best way to support business alignment is to make sure the digital strategy tactics support the business strategy.”

Forrester Consulting and Accenture Interactive have four recommendations for leaders who are driving digital transformation:

  • Advocate digital transformation and the customer experience at an executive level. Digital transformation needs to be a company-wide initiative, which requires strong collaboration and evangelism from company leaders. The study found company culture and organization lag behind process and technology when it comes to digital readiness. For digital transformation to succeed, you need to make cultural change and educational aspects of transformation a highlight of your plan.
  • Execute change within the context of an end vision. You need a clear vision for the end-state to get everyone moving in the same direction and you need to communicate any changes to that vision during the process. Standardizing on a core set of technologies that the business can build around is a great way to accelerate change and keep the organization connected.
  • Be willing to take risks and learn from mistakes. You will need to take risks and develop agile processes in order to keep up. Digitally mature companies don’t require traditional approvals and a detailed business case for every change. If new functionality is in the spirit of digital transformation and the customer experience, give it a try, solicit feedback, and then iterate on it.
  • Find partners whose capabilities complement your own. Enlist third-party solution providers to help you navigate change and implement new strategies. It is often cheaper and faster than building those capabilities internally. Find partners that understand your broader strategies and have specific strengths in the functions and areas that your company lacks.

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