Digital transformation delusions

LAN646 Digital transformation delusions

There’s a bit of a disconnect in the findings from research into the level of digital transformation among Australian organisations, undertaken by Tech Research Asia for Hitachi Data Systems: Taking Digital Transformation to the Next Level.

 

On the one hand the researchers say: “Digital Transformation has moved beyond the initial hype into a well-understood concept in Australia and New Zealand (ANZ) and is now firmly on the agenda for the majority of large organisations across the region.”

Organisations are therefore urged to take digital transformation to the next level. “You need to take it to the next level to continue to grow and stay ahead of the curve. The focus should be tomorrow’s digital opportunity, not yesterday’s.”

However the researchers also found organisations struggling to identify market leaders in digital transformation, indicating, it said, that: “the term is currently being applied too broadly and is in danger of being over-hyped.”

Forty of respondents indicated that the results from digital projects so far were either mixed, too difficult to measure or delivered no competitive advantage.These hardly seem like solid foundations on which to build the next level of digital transformation.

‘Claytons’ digital transformation?

If you dig a bit deeper into the research findings it seems that what people are citing as digital transformation really isn’t.

The researchers found R&D, or innovation, not to be high priority for most organisations, and said this “supports our belief that current digital efforts are focused on the digitisation of existing processes rather than transformation.”

They concluded: “The reality is that while most organisations say they are transforming and understand ‘digital’, they are clearly still tied up in modernising their tech foundations; often for business-as-usual needs.”

The problem, they suggest, is one of culture. “Truly transformative digital initiatives are harder to map out in advance – the goal is often unknown at the start and needs to evolve with the project in real time. This type of open-ended process is often at odds with existing company culture and creates a challenge for existing companies looking for real transformation.”

This should be no surprise to readers of this blog. Earlier this year we quoted Cap Gemini Consulting saying: “Digital transformation has become the ultimate challenge in change management,” and we pointed out that the number one priority in a list of 10 Principles of Leading Change Management, was culture.

Change the things you can, accept the things you can’t

Tech Research Asia came to pretty much the same conclusion. It said it had identified: “competitive environment, internal culture, regulation and skills” as “the top challenges preventing organisations from achieving their goals. … We believe current industry and market culture is stifling truly transformative digital initiatives.

“The challenge for most mature organisations is they are set up to service an existing business, where changes are typically incremental and projects can be planned out with quantifiable goals and budgets.”

Regulation and the competitive environment are external; they can’t be changed. This leaves skills and culture as the key barriers organisations need to break down if they are to achieve successful digital transformation.

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