Digital Transformation: Most Organizations Don’t Understand What Digitalization Really Means
New research from Sitel Group® suggests that in their haste to undergo a digital transformation without first understanding the full extent of such an undertaking, most organizations could be setting themselves up for failure.
It’s official. Digital transformation has moved to the top of the C-suite agenda across both the U.S. and U.K. However, a large proportion of organizations are still confused as to what becoming a digital-first business means or the steps needed to complete a transformational journey.
The latest Sitel Group whitepaper, Customer Experience & Digital Transformation: Insights from the Boardroom, reveals that while digital transformation has been singled out as a 2022 strategic priority by 64% of organizations across the U.S. and U.K., a concerning 70% of executives are potentially focused solely on the technological aspects of digitalization.
Definitions of Digitalization Differ
Compiled from interviews with 403 C-suite executives, the whitepaper highlightsthat organizations are clear in understanding the importance of digital transformation for preparing for the future. Yet, in their haste to make progress, they might be underestimating the scope of such an endeavor.
One-in-five business leaders surveyed described their organization as being digital-first and a further 56% said that their transformation journey is either underway or is about to progress beyond the roadmap stage.
Nevertheless, when asked to provide a definition of what digital transformation entails, just 22% of U.S. organizations (compared with 43% of U.K. respondents) described it as an enterprise-wide undertaking that touches every aspect of business. Unfortunately, the most popular answer provided by U.S. respondents — given by 36% of executives polled — is that transformation is an IT project.
A Digital Transformation Is Not an IT Project
IT does play a crucial role in digitalization, particularly in relation to identifying and integrating the right digital tools, technologies and processes. But IT is only a single element of a multidiscipline approach that covers everything from change management to retraining and reskilling employees.
Since the term was officially coined in 2011, much has been written about digital transformation in general and on failed projects in particular. The oft-cited statistic that 70% of transformations fail is simply anecdotal and has never been supported by any evidence or research. However, recent data shows that as many as one-in-four projects fail to meet any of their objectives and that 10% of all money organizations invest in these types of large-scale projects is wasted every year due to poor project management and unclear objectives.
Organizations Face a Very Real Risk of Failure
Now, add to this the fact that only 30% of business leaders interviewed demonstrated a full understanding of the depth and breadth of a transformation and there is a clear concern that many of the digitalization projects currently in motion run a genuine risk of failing to deliver. Indeed, it’s telling that 7% of executives cited the fact they have already experienced a failed transformation as their biggest barrier to undertaking another.
The Advantages of a Digital Transformation Are Clear
Conversely, there is no confusion about the potential business benefits of a successful transformation. When asked, C-suite leaders overwhelmingly identified greater competitiveness, resiliency and customer experience delivery as the greatest perceived benefits of a digital transformation.
In particular, executives ranked the three greatest advantages of becoming digital-first as exceeding the customer experience offered by their competitors, automating internal processes, and achieving or maintaining parity with the competition.
However, achieving these competitive advantages starts with a clear definition of what a digital transformation is and an equally unambiguous roadmap for delivering on business objectives. To read more insights captured from the research, download the whitepaper “Digital Transformation & Customer Experience: Insights from the Boardroom from Sitel Group®.”