The MIT Sloan School of Management, in conjunction with consulting firm Deloitte, has carried out a study of companies undergoing digital transformation. Their findings show that most firms still lack clear strategic direction in this area.
Could it be that simply implementing new technology does not determine the success of a company’s digital transformation? This is what the latest research report from the MIT Sloan Management Review, the business journal of the Massachusetts Institute of Technology – entitled ‘Strategy, not Technology, Drives Digital Transformation’ – is suggesting. With the help of consulting firm Deloitte, over 4,800 managers in 129 countries were surveyed in order to obtain a better understanding of last year’s trends and policies vis-à-vis corporate digital transformation. They then ranked the firms according to their degree of ‘digital maturity’ based on marks given by company employees.
Only 29% of companies were found to have reached the last phase of ‘digital maturity’. The report states that ‟maturing digital businesses are focused on integrating digital technologies, such as social, mobile, analytics and cloud, in the service of transforming how their businesses work.” So why are the remaining 71% of the companies investigated lagging behind?
At the end of the day, the actual technologies appear to play only a minor role in the success of a company’s digital transformation, while strategic direction emerges from the survey as the really important factor. Only 25% of those polled say that a lack of technical skills is slowing down their company’s digital transformation, compared with 43% who cite diverse priorities. In fact 44% of the respondents reckon that their firm lacks knowledge on the true impact of digital on the business. Again, overall vision seems to be more of an issue than actual technology.
Top of the list among the obstacles cited by employees is a lack of strategy. In second place respondents named diverging priorities, such as when there are concerns over security. In fact the problem appears to lie squarely with the lack of a clear policy on digital transformation. Among those firms deemed to be ‘digitally maturing’ companies, 80% of the employees polled say that their organisations have a clear and coherent digital strategy, while only 15% of respondents from companies still at an early stage of digital maturity say the same thing.
This is clearly a key issue as only 43% of the managers surveyed agree with their company’s digital policy. This statistic once again underlines the need for effective communication when trying to make the digital shift; a move which could create as much as €2.5 trillion in added value across European industry as a whole.