Digital transformation challenges
BCG’s Bruce Henderson Institute has found that up to 75% of transformations fail to meet their goals. Some of that may be due to misguided efforts, but Ellmer and others point out that organizations must contend with many challenges as they seek to transform.
“The Path to Digital Transformation: Where IT Leaders Stand,” a 2024 report from Insight and CIO.com parent company Foundry, listed gaps in technology skills and knowledge, budget constraints, and infrastructure not optimized to support new technologies such as gen AI as the top three challenges to DX today.
Experts say cultural resistance to change, change fatigue, siloed activities, and organizational complexity also can tank transformation efforts. So can focusing on technology adoption without clear business reasons for doing so.
“The success of digital transformation for any organization is not how well you know the technology or how many experts you have who understand the technology; it’s really about how you integrate technology into your organization, into your ecosystem, in order to extend your existing value proposition as well as create new value propositions,” Kapoor says.
Digital transformation examples
Examples of successful transformation abound; here are three of note:
Sysco, a multinational food distribution company, morphed its pandemic-era pivot, which included helping its customers make their businesses more digital, into a post-pandemic hypergrowth strategy by leveraging analytics, AI, and other digital technologies. Its “Recipe for Growth” blueprint, announced in May 2021, calls for the company to grow 1.5 times the size of the entire industry — an ambitious plan that earned Sysco a 2023 CIO 100 Award for innovation and IT leadership. “The Recipe for Growth has everything to do with how we run the business — the cloud and the underlying technology, how we deliver software and all the fundamental foundational capabilities that underpinned our strategy,” says Tom Peck, executive vice president and chief information and digital officer at Sysco.
Over the past decade Domino’s Pizza, one of the world’s largest food delivery companies, transitioned away from legacy processes and technologies to reinvent how it engages and serves customers. This shift allowed it to successfully compete with digital-native food delivery platforms, streamline operations, and foster innovation. Key features of its ongoing digital transformation efforts include delivery tracking and personalized marketing campaigns, successes enabled by its modernized tech stack, analytics, and AI.
Deere & Co., better known as John Deere, has delivered its recognizable green tractors as well as other construction, farming, and landscaping equipment for nearly 200 years. But it has also been widely recognized for its use of data, analytics, and other digital technologies to deliver new products and services. For example, the company embeds AI into its farming equipment, enabling it to tell the difference between weeds and crops. It includes automation and intelligence into its machines, allowing them to operate without drivers. And it delivers data-driven insights to its customers in the fields, helping landowners and operators more effectively and efficiently manage their fields and forests. Of its commitment to digital innovation, chairman and CEO John May says: “We don’t create tech for tech’s sake. There’s purpose behind everything we do, so that our customers have the tools they need to tackle some of the world’s greatest challenges.”
Stages of successful digital transformation
Although every organization follows its own digital transformation journey, experts say there are five common steps that most organizations follow as they advance the technical initiatives that support their transformations:
1. They align objectives with business goals. Successful organizations start with the questions: What business outcomes do I want to achieve for customers, and what problem is the business trying to solve? They then align their goals with the outcome the business is striving to achieve.
2. IT and business come together to co-create. Alignment and collaboration across functional areas of the company are essential to digital success. Many organizations create cross-functional teams to help drive digital transformations.
3. Companies pick the right strategic partners. Whether it’s a global consultancy, system integrator, or boutique design shop, IT leaders need help fulfilling digital imperatives to reduce time to business value.
4. They redesign business and products around customer outcomes. Customer experience is a key motivator for digital transformation, and most digital initiatives are tailored to improve customer interactions and open new avenues for business.
5. They retrain employees around digital. Upskilling on the latest technologies has become a business imperative for competing in the digital era.
Digital transformation roles and skills
While emerging tech and revamped processes are crucial, having the right skills on staff is essential to any digital transformation.
Software engineers, cloud computing specialists, and digital product managers remain key roles for companies seeking to roll out new products and services. DevOps leaders galvanize software development by merging development with operations, enabling companies to continuously iterate software to speed delivery.
[Related: 13 essential skills for accelerating digital transformation ]
Data scientists and data architects are also in high demand, as companies seek to glean insights from vast troves of data, and transformations lean increasingly on machine learning and artificial intelligence.
UX designers, digital trainers, writers, conversational brand strategists, forensic analysts, ethics compliance managers, and workplace technology managers round out the talent priorities.
Of course, leadership matters. Many CIOs have appended the chief digital officer (CDO) title to describe their remit, while some are simply rebranded as a CDO. Sometimes the roles CIO and CDO roles are distinctly bifurcated. Typically, these calls are up to the CEO.
But it doesn’t matter who owns the digital imperative, as long as someone is competent using technology to drive revenue growth — and is capable of bringing together all the elements.
“They’re orchestrators,” says Nitish, Mittal, a partner leading the technology practice at research firm Everest Group, adding that they understand that technology is not the main goal but rather a means to an end — whether the end is driving more productivity or creating more customer engagement.
More on digital transformation:
